Googles Prospects in Terms of the Criteria: Suitability, Acceptability and Feasibility - Essay Example

? Introduction Google Inc. is known to be the leading search engine technology provider and its founders, Larry Page and Sergey Brin, have taken the company to unimaginable heights. The company’s philosophy: “Don’t be evil” is projected to be the major guiding force for all its decisions but outsiders seem to be in awe and even unclear of what exactly the company is aiming at and stands for, as it seemingly changes its commitment to its vision as in the case of its decision to enter the Chinese market with many restrictions imposed on the delivery of information which itself is against its long standing philosophy of providing uncensored information to its users. Though many companies have reiterated their commitment to place the user as the top priority in their business conduct, Google Inc. is seen to mean it in many ways than obvious (Martin, 2006). Against this backdrop, and the many other products that the company has introduced in the recent past after it went public in 2004, an analysis of the company’s products, services, strategies, patents, stakeholder interests, etc. would be embarked on to understand its strategic position based on the feasibility, acceptability and suitability of its present strategy. Evaluation would be helpful to determine if “Google Inc.: Running Amuck?” as stated by many, is true or to what extent the company is exposing itself to risks by expanding and diversifying? This report attempts to clearly understand Google Inc.’s strategic position with its innovative product and service launches in the recent past. Products and services Google has products and services for both online internet users and the mobile users. The company has products and services based on three types of technologies: web search technology, advertising technology and large-scale systems technology (shown in Appendix A). It has a large portfolio of products and services with a core product: web search, as its major revenue generating service. It has various different classifications of its products based on the kind of service it provides. “Google.com, web and content search, communication and collaboration, downloadable applications, mobile, labs, Google AdWords, Google AdSense and Google Enterprise, all of which are nevertheless marketed as categories of products relevant to: search, explore and innovate, communicate, show and share, go mobile and make your computer work better” (Case study- Google Inc., 2011). The company also is committed to always giving users an experience that they would vouch for, and its motto is the guiding force. The company has a strategy for investment where it invests in three different levels, popularly known as 70-20-10 investment strategy. It invests in three kinds of product markets: core search and advertising products, products related to core products and experimental products (Case study- Google Inc., 2011). It also has a product serving according to the specific region or country laws as witnessed in EU and China where the company has adapted to the legal requirements of serving restricted or customized services through locally located servers delivering filtered web pages (Martin, 2006). A list of patents for Google is shown in Appendix B. Appendix C and Appendix D list the free and for profit products offered by Google. Opportunities Google provides search engine web content services through simple user interfaces and uses low cost web servers. It provides content in about 88 languages and is an established brand which has gained users trust. Leveraging on this end user trust, the company has the potential to build on its sponsored advertisement links by tracking user searches and providing relevant and updated content with user permissions (Google Inc.: SWOT analysis, 2008). As the sponsored links are relegated to a corner of the page at the moment, it can nevertheless be moved to a full-fledged revenue generating service offering like AdSense and AdWords. The company’s product offering, Google Video is another link that provides opportunity to become a revenue generating service. Its tie-ups with the different news and content providers like Public Broadcasting Services (PBS), Fox News Networks (Fox News), the National Basketball Association (NBA), C-SPAN, CBS News and ABC News can be seen as an opportunity to move the Google Video product as a commercially viable products as it is already offering free and profit making content through this service. Its decision to acquire Intellectual Property (IP) rights through Digital Rights Management (DRM) technology is set to ease a lot of obstacles for the company in this direction (Case study- Google Inc., 2011). Further, as the company has a number of patents for a wide range of products, it can utilize this knowledge and service to its advantage in the near immediate future unlike YouTube (Case study- Google Inc., 2011). Its unique strategy of cutting down taxes although it normally operates in high tax regions can be leveraged to generate profits that other competitors may lack. An example is the case of “Double Irish” and Dutch Sandwich” strategies in reducing its overseas tax rate can be adapted to other countries too (Drucker, 2010). Further, Google has the opportunity to grow and sustain its market position in the mobile market by extending mobile content (Google Inc.: SWOT analysis, 2008) and its plans to acquire Motorola Mobility Holdings Inc. can be seen as a best bet to beat competition while it gains a hold in the mobile market (Wingfield, 2011). The company’s Google Wallet along with Google Maps, Google Offers, etc. has been able to garner 25% of the Android mobile market transactions (Smith, 2011). Threats Google’s dependence on AOL and other company’s portals for some of the content and services can be seen as a threat to its revenue as there is a threat of service agreement termination. Further, due to shorter time for the company’s ability to create a barrier for entry, there is always a scope for competitors like YouTube, Microsoft, etc. to capture the market for mobile, video, etc. The company’s cost-per-click ranking service can be confusing to its advertisers and it may stand to lose out to competition should they decide to capture this segment (Google Inc.: SWOT analysis, 2008). The company’s decision to seemingly deviate from its perceived stance in delivering uncensored content in China can be a setback to its revenue as well as confuse its customers in its commitment to put its user’s first leading to a loss of user’s trust. There is a need for the company to create an environment of trust among its large base of users that it is committed to provide services and products based on the ongoing attempts to evolve its business while sticking to the philosophy of providing unlimited content to its users across the world (Martin, 2006). Strategic positioning The company’s net profit in FY2010 was $8,505 million , an increase of 30.4% over 2009 and its operating profit stood at $10,381 million in FY2010, with an increase of 24.9% over 2009 while its revenue during FY2010 ending in December 2010 was $29,321 million (Datamonitor, 2011). This reiterates that Google’s strategic moves have yielded profitable results which can be utilized and sustained for future. Appendix E shows an illustration of profit for FY05. Strategy Google has different strategies for the different functionalities of its business: finance, marketing, human resources, branding, etc. As part of its branding strategy, its products and services are released and developed as Beta versions as long as there are changes being incorporated to enhance the service offering (Case study- Google Inc., 2011). This also helps the company gather more information of the users while helping it gain an edge in providing services that target the end user through customized and localized content which its future products intend to introduce (Google Inc.: SWOT analysis, 2008). The company’s 70-20-10 financial strategy ensures that the profitability is not affected adversely, which is in the interests of all its stakeholders (Case study- Google Inc., 2011). Further, its tax cutting strategy is one of its kinds and has set an example for others like Facebook Inc. and Microsoft Corp., to follow (Drucker, 2010). The company has high end technology which enables it to be ahead of competition in the search engine market as its PageRank technology has about 500 million variables and 2 billion terms to solve an equation (Martin, 2006), has user trust as its important assets along with about 650 committed employees working single-mindedly on developing innovative solutions, processing about 150 million searches a day (Hammonds, 2003; Manyika, 2008), making it the largest strategically managed enterprise based on free and profit making product and service provider. Its branding strategy is found to be an ideal mix of under promising and over delivering where customer is delighted and the company attracts customer loyalty and trust that the company further utilizes to expand its services. It also has the policy of sticking to its core values of providing content to the user which led to it entering the China market with restricted and filtered version of its page: www.google.cn and to compensate for the changed philosophy, it has generated and made available another version of the content provided within China through its homepage targeted at the Chinese: www.google.com (Chinese). Risk analysis Although the company has been able to rationalize its market positioning strategies (in China, Ireland, etc.) that are found to be inconsistent to its initial commitment of providing uncensored free content to all its users, its entry into China market with filtered content; and smart tax cutting initiatives in Ireland (Reuters, 2011) can be risks that the company needs to be prepared to address anytime as the intense competition in the market may just take over its trusted users who can be confused due to the wrong signals it has been sending through such conflicting moves to establish its market position. Also, its efforts to bring open standards in the mobile market by its alliance or acquisitions with Motorola Inc., Qualcomm Inc., etc. can remove barriers to entry for other competitors like Microsoft, etc. as consumers set to gain with more choices (Bartash, 2007). Conclusion “Goolge Inc.: Running Amuck” can be understood to be a statement made due to the unavailable information that Google so well guards by seemingly having different strategies for the external and internal market environments. However, a study of the different strategies, products and services, stakeholder interests, profits, etc. indicate that the company has acted in the interests of its stakeholders and the success of its decision making in various aspects of its business is reiterated in its profits witnessed in FY 2010 and the different strategies at the different times can be considered suitable for steering the company to profitability with its various initiatives being well received by its users. However, some concerns still remain in terms of acceptability of its tax cutting and censored content. The company’s analysis in terms of FSA has been successful in understanding its strategic direction. It can be found that the company rates high on suitability to its external and internal environment, with its strategies feasible to produce profitability, but at the same time making its strategies a little unacceptable. Word count: 1838 References Bartash, J. 2007. Google unveils mobile-phone strategy: Search giant has major partners, but devices aren't ready yet. MarketWatch. Available online: http://www.marketwatch.com/story/googles-mobile-phone-strategy-keys-on-open-standards Accessed on: 26th November 2011. Case study- Google Inc. 2011. Planning Intellectual Property for Marketing Strategies in The Digital Content. Available online: http://nccur.lib.nccu.edu.tw/bitstream/140.119/33884/11/61010111.pdf Accessed on: 26th November 2011. Datamonitor. 2011. Google Inc. - Strategy and SWOT Report. Analyst Research Report. Drucker, J. 2010. Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes. Bloomberg. Available online: http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html Accesssed on: 26th November 2011. Google Inc.: SWOT analysis. 2008. Case Study: Google, Inc. Available at: http://www.soopertutorials.com/business/strategic-management/1369-google-swot-analysis.html Accessed on: 26th November 2011. Hammonds, H.K. 2003. How Google Grows...and Grows...and Grows. FastCompany. Available at: Accessed on: http://www.fastcompany.com/magazine/69/google.html 26th November 2011. Martin, E.K. 2006. Google, Inc., in China. Business Roundtable: Institute for Corporate Ethics. BRI-1004. Reuters. 2011. Google Inc. Seeks EU Approval For Motorola Mobility Holdings Inc. Deal-Reuters. Available at: http://www.reuters.com/article/2011/11/28/us-google-motorolamobility-eu-idUSTRE7AR0IW20111128 Accessed on: 26th November 2011. Smith, D. 2011. Google’s Strategy for Mobile and Online Payments Revealed. VentureBeat. Available online: http://technology.inc.com/2011/07/14/googles-strategy-for-mobile-and-online-payments-revealed/ Accessed on: 26th November 2011. Wingfield, N. 2011. Google Deal Complicates Microsoft's Strategy. The Wall Street Journal. Available at: http://online.wsj.com/article/SB10001424053111903480904576510632467131532.html Accessed on: 26th November 2011. Appendices Appendix A: correlation between Google’s technology and products (Case study- Google Inc., 2011) Appendix B: List of patents for Google Inc. (Case study- Google Inc., 2011) Appendix C: Google’s free products and services (Case study- Google Inc., 2011) Appendix D: Google’s profit products and services (Case study- Google Inc., 2011) Appendix E: Google’s profit for FY05 (Case study- Google Inc., 2011) Read More