Infleunce of Information and Technology on Business Strategy Development: Google Company - Case Study Example

INFLEUNCE OF ICT ON BUSINESS STRATEGY DEVELOPMENT: CASE OF GOOGLE Table of Contents Table of Contents 2 Introduction: 3 Changes in business strategy development with ICT growth: 3 ICT incorporation in business practices: Google: 5 Influence of ICT in business strategy development: Google: 6 Positive and Negatives of ICT incorporation: 8 Recommendations: 9 Conclusion: 10 References: 11 Bibliography: 12 Introduction: In the words of Jullien (2006), growth of Information and Technology (ICT) has been the biggest revolution in the business segment since the Industrial Revolution. Over the last 10 years, business industry has experienced numerous changes in its operating process and most of them being influenced with the growth of technology. Technology has evolved as a dominant factor in the process of business strategy development. According to Bossink (2008), technology is not only a business operations tool but it has transformed into a techniques for gaining competitive advantage. This report is based on the implementation of ICT in the business strategy making process and the selected organization for analysis is Google Plc. Google is the largest market share holder of the search engine and internet browser industry (google.co.uk, 2014). With a diversified and huge product base they are among the industry leaders of the technological segment. The report will try to evaluate the process of ICT implementation by Google for business strategy development. Changes in business strategy development with ICT growth: Before the introduction of ICT in the business world, business processes focused on gaining accuracy in their strategies which slowed the response time of the business towards market changes. However, in the past two decades the increasing use of ICT in the business processes has brought in frequent changes that allowed the business houses to cope up with the changes in the market nature. Bossink (2008) stated that the basic role of ICT was to enhance the communication between a business and its stakeholders. But with continuous growth and modification in the strategy, ICT is now a dominant factor in every functional aspects of business. New technologies such as cloud computing have helped in business expansion across geographical boundaries and reduced the cost of operating overseas. Business houses can now monitor the work, gather, store and share information, synchronies their work process from a singular location in spite of travelling to all the places. Pollock (2010) stated that business operations have become more accelerated and focused with the help of ICT integration in the business. Business firms can now connect with a wider consumer base with the help of ICT technologies such as video conferencing. Furthermore, business monitoring process has also changed with advanced technologies such as cctv monitoring, employee tracking systems, etc (youtube.com, 2009). Zikmund (2008) summarized that the influence of ICT on the business process has been mainly on the communication and monitoring needs. Ander and Kapoor (2010) argued that the concept of managing productivity was not popular in the business sector before computerized systems were introduced in the production sector. In the current situation, communication with internal and external stakeholders has increased as a result of social media networking and remote technological tools such as Smart phones, tabs, etc. Business houses can directly communicate with their consumers for identifying their needs and expectations. Tebo (2011) reflected that although ICT has induced many improvements in the business sector but it has also provided the customers access to market information which has intensified the competition. Growth of technology has created platform for mutual collaboration among the buyers and sellers which has boosted the level of performance for the sellers while the options available to the buyers are more. ICT incorporation in business practices: Google: Google Plc is one of the giants of the technology industry, with their diversified and huge product base; they are undoubtedly a pioneer in the innovation and technological sector (google.co.uk, 2014). The business practices of Google are developed in an unorthodox manner that does not tally with the theoretical knowledge of business management. The basic theme for business growth is based on the concept of innovation. They believe in creating a supportive work culture and environment for their employees that allows the workforce to commit fully towards the organizational goals (google.co.uk, 2014). Numerous products and services developed by Google over the years such as Google search engine, Google Chrome, Google Adwords, Map, Gmail, Android, etc are closely related with ICT implementation and its effectiveness in the business process of Google. The inclusion of ICT is based on the following process: Figure 1: ICT implementation in Google Plc. (Source: google.co.uk, 2014) Google being an employee centric organization focuses on evaluating the importance any ICT technology by incorporating it in the internal environment of the company. The strategic objective of Google is to provide information to their consumers and help them adapt to the technological changes happening around them. The above depicted ICT implementation process reflects the method of implementing ICT in the work process of Google. The ICT implementation process is based on a learning curve that aims to enhance the knowledge base of their employees and convert their potential performance level into actual performance. Google’s monitoring process is based on a single organizational database that also tracks the employee activities and their performance (Pollock, 2010). They also have strict security measures installed in their work places such as CCTV cameras, censors, magnetic identification, bio-matrix machines, etc. These technologies help Google to assess the human resource utilization and assess the probable performance level. Apart from this, the communication system of the company is also developed totally on ICT platforms such as cloud computing, in-house chat systems, intercoms, emergency speakers, projector machines, etc (Pollock, 2010). Influence of ICT in business strategy development: Google: Google focuses on developing their business plans and activities for improving the technological accessibility of their consumers. Their strategy development process is mostly focused on the identification of needs of their consumers and the scope of improvement in the existing services of the firm (Tebo, 2011). The business strategy formulation is done in a participative style, they include their employees in the decision making process to enhance the scope of their organizational objectives. Cazier and Louis (2009) opined that technological growth has taken place not only in the corporate sector but also in the social sphere which has influenced the consumer behavior. In order to deliver the customer expectation or maintain the customer brand perception, a firm needs to incorporate ICT for meeting the technical needs of their consumers (Chao et al. 2014). Google has used ICT for developing a streamlined operational process that connects all the departments with each other. With the help of Cloud technology, Google has developed a common database for storing information of their international activities. The cloud can be accessed by various Google offices across the world which allows the organization to share their information and enhance their communication at the same time (google.co.uk, 2014). Cazier and Louis (2009) observed that the strategy development process of Google considers ICT as a supportive tool. With the help of ICT, Google tries to implement the organizational polices and strategies in their work place. Figure 2: ICT Influence in business strategy formulation in Google. (Source: google.co.uk, 2014) The above given diagram highlights the role of ICT in the strategy development process of Google. The decision making process has been segmented into four categories namely, infrastructure, transactional, informational and strategic (cloud.google.com, 2014). Focusing on the role of ICT on the strategic decision making process it can be seen that ICT is used for bringing in innovation, managing change, communicating with the internal and external stakeholders and gaining a competitive advantage (Cazier and Louis, 2009). However, one gap in the process of ICT inclusion in the managerial decision making process is the absence of connection between the financial segment of the country. Positive and Negatives of ICT incorporation: ICT has become an inspirable part of the decision making process for both buyers and the sellers. One of the basic features of using ICT is that it is fast and cheap. Use of ICT features such as emails, video conferencing, cloud computing have accelerated the business process. Internal communication, information sharing and gathering can now be conducted in a more systematic manner reducing the cost of operations. The storage space is now virtual that has created more space for operational functions. Chesbrough (2009) criticized that although integration of ICT brings in operational stability but it also reduces the security of the organizational database. Although ICT enhances the reach of the business but implementing ICT is a costly affair. The growth of the internet usage has also increased the number of cyber crimes happening all over the world. Haucap and Heimeshoff (2013) added that consumers are not confident about using ICT facilities such as online payments where the consumers need to share confidential data with the business houses. Chao et al. (2014) noted that developing ICT influenced products and services are beneficial only when the customers are accepting them, however, if consumers tend to withdraw from the service the concept will result in business failure. Observing from the perspective of strategic marketing process, use of social media networking, blogging, online promotions are the dominant market technique. All most all the big brands are trying to create a social profile of their brand so that they can connect with their customers on a mutual platform (cloud.google.com, 2014). Marketing functions such as market research, brand positioning, and consumer awareness can now be conducted with the help of ICT tools which allows the company to reduce the promotional cost of the products and services creating a cost competitive advantage. On the other hand, Cazier and Louis (2009) stated that the actual value added by ICT cannot be derived based on their level of usage within the organization and by the customers. Social media and Smart phones have created an open market place for the customers and given access to market information. The customer begriming power has grown as they now have more options in their hands. Online comparison sites, social media, blog spots, etc are influential and consumer attractive ICT technologies. Recommendations: The ICT integration of Google has allowed them to be amongst the top most technological service provider in the world. However, because of the increasing competition, they need to assess the benefits of ICT on a larger scale. Implementing every new ICT system or tool requiems changes in the entire operational system which increases the cost of operation. In order to gain cost competitive advantage, Google must reduce the cost of ICT integration. The strategy applied by Apple Inc. can be suitable for Google, Apple uses vertical integration for reducing the cost of operation. Vertical integration will provide Google in-house infrastructure and production process. Their acquisition of Motorola can be considered as a step towards incorporating vertical integration process. Another change that can be recommended for Google is to reduce their number of services that are not being accepted by the consumers. For instance, Google + was launched as a social media platform however Facebook’s huge brand value and effective consumer retention policies have outshined this service. Recently Google closed down their first social media website Orkut. This will also reduce the cost and help them direct their funds towards improving the services that are being accepted by the customers. Conclusion: The above study focused on the importance of ICT in the process of business decision making of Google Plc. Google Plc is known for their innovative culture and extensive service base across the global internet platform. Google mainly use ICT as a supportive and implementation tool for their achieving organizational objectives. The operational functions are being designed in accordance with the ICT techniques which reduce the cost and accelerate the service delivery process. On the other hand, ICT has also provided the consumers with access to market information and increased their bargaining power. It is essential for Google to reduce their operational costs by optimal utilization of ICT resources so that they can retain their position of industry leader. References: Ander, R. and Kapoor, R. (2010) "Value Creation in Innovation Ecosystems: How the structure of technological interdependence affects firm performance in new technology generation," Strategic management Journal, 31, pp. 306-333. Bossink, B. A. G. (2008) Leadership for sustainable innovation. International Journal of Technology Management & Sustainable Development,6, 135–149. Cazier, J.A. and Louis, R.D. (2009) “E-business differentiation through value-based trust”, Information & Management, 43, pp 718-727 Chao, C., Fan, Z., Lin, J. and Saha, A. (2014) Analysis of Google’s Strategy on Android. Available from: http://web.stanford.edu/~ccchao1/Business%20Strategy/MS&E%20270%20Android.pdf, [Accessed on 29th September 2014]. googl.co.uk (2014) eCompany: Our Culture. Available from: https://www.google.co.uk/about/company/facts/culture, [Accessed on 29th September 2014]. google.co.uk (2014) Company: Mission statement. Available from: https://www.google.co.uk/about/company, [Accessed on 29th September 2014]. google.co.uk (2014) Company: Ten Things That we Know to be True. Available from: https://www.google.co.uk/about/company/philosophy, [Accessed on 29th September 2014]. Haucap, J. and Heimeshoff, U. (2013) Google, Facebook, Amazon, eBay: Is the Internet Driving Competition or Market Monopolization?, Discussion Paper. Düsseldorf Institute for Competition Economics, 1-17. Jullien, B (2006) Two-sided Markets and Electronic Intermediaries. In: Gerhard Illing and Martin Peitz (Eds.), Industrial Organization and the Digital Economy, MIT-Press, Cambridge. Pollock, R. (2010): Is Google the Next Microsoft? Competition, Regulation in Internet Search, Review of Network Economics 9 (4). Tebo, P. V. (2011) Building business value through sustainable growth. Research Technology Management, 48(5), 28–32. youtube.com (2009) Benjamin Kott on Green ICTs at Google. Available from: http://www.youtube.com/watch?v=GUDrwV8S3kg, [Accessed on 29th September 2014]. Zikmund, W, G. (2008). Customer relationship management: integrating marketing strategy and information technology. 6th ed. Oxford: Blackwell Publishing. Bibliography: Argenton, C. and Prüfer, J. (2012): Search Engine Competition with Network Externalities, Journal of Competition Law and Economics 8 (1), 73-105. Becker, M. and Knudsen, T. (2005). The role of routines in reducing pervasive uncertainty‖, Journal of Business Research, 58(6). 746-757. Bitner, M. J., Brown, S. and Meuter, M. L. (2010) “Technology Infusion in Service Encounters,” Journal of the Academy of Marketing Science, 28, (1), pp.138-149 Bork, R. H. and Sidak, G. J. (2012): What Does the Chicago School Teach About Internet Search and the Antitrust Treatment of Google?, Journal of Competition Law and Economics 8, 1-38. Chesbrough, H. W. (2009) Business model innovation: It’s not just about technology anymore. Strategy and Leadership, 35: 12-17. Choo, C. W. (2006). The Knowing Organization: How Organizations Use Information to Construct Meaning, Create Knowledge, and Make Decisions 2/e. New York: Oxford University Press. cloud.google.com (2014) Google’s Approach to IT Security: A Google White Paper. Available from: https://cloud.google.com/files/Google-CommonSecurity-WhitePaper-v1.4.pdf, [Accessed on 29th September 2014]. Dillon, S. M. (2002), Understanding the Decision Problem Structuring of Executives, Thesis, University of Waikato Dixon, H. and Quinn, B. (2010) “Franchising and the Internet: an Exploratory Study of Franchisor Web Sites”, Internet Research, 14(4), pp. 311-322. Laudon, K.C. and Laudon, J.P. (2010). Management Information System, New Jersey: Pearson Education Inc. McKinney Global Institute (2013) Disruptive technologies: Advances that will transform life, business, and the global economy. Research paper, McKinsey & Company. O’Brien, J.A. and Marakas, G.M. (2010). Enterprise Information System, New York: McGraw Hill Parasuraman, A. and Grewal, D. (2008) The impact of technology on the quality–value–loyalty chain: A research agenda. Journal of Academic of Marketing Science, 28, 168–174. Parker, G. W. and van Alstyne, M. (2005): Two-sided Network Effects: A Theory of Information Product Design, Management Science 51, 1494-1504. Sajady H, Dastgir M and Nejad HH (2008). Evaluation of the Effectiveness of Accounting Information Systems. International Journal of Information Science and Technology, 6 (2): 39 – 49. Wagner, W, P. and Zubey, M. (2006) Customer relationship management: A People, Process, and Technology Approach. 7th ed. New York: Kaplan Publishing Yoffie, D. B. (2014) Innovations Changing The World: New Technologies, Harvard, And China. Available from: http://shanghaicenter.harvard.edu/event/Harvard%20and%20China%20Session%206%20v051910.pdf, [Accessed on 29th September 2014]. Read More