Google: Innovation as Competitive Advantage - Case Study Example

Google: Innovation as Competitive Advantage Introduction: For every organization innovation is the key behind their success. In modern world every organization gives special emphasis on the field of innovation to get a strong market place and also to increase their own customer base across the globe. Be it in the information technology industry, or the mechanical or telecom industry, in the automobile sector as well innovation is the key behind the success. The term innovation has become the rallying cry of every product manager. The words been wrapped around everything from the Apple iPod to a new template in Microsoft Word to Google’s Project Glass in the modern era. This report is focusing on the innovative approach of Google in their corporate strategy to get a strong hold in the market of software development. The main focus is about their latest innovation Project Glass-which is now in the market of few countries as a testing product and soon it will get a bigger presence in the technological market. What Is Innovation? From the technological perspective, "innovation" can be defined as "introducing something new;" there are no specific rule of how ground-breaking or world-shattering the innovations needs to be, the only ground rule related to innovation is it needs to be superior than what was there before or something absolutely new in any field . (Sylver, 2014). For Google, there are number of employees who are associated with the process of innovation. From the very beginning the company is aiming to set a new standard in the software market especially in the world of search engine to make everything available at the fingertips of the users. From the very beginning, the company is looking to set a new benchmark in the field of innovation and the Project Glass is the latest addition in that list. Google: Principle for Innovation: Google as a company is the leading innovator in the software market. There are nine specific principles associated with the innovation process of the company. As a company they are specific work pattern, job principle moreover company principles associated with the innovation process. The principles are as follows: Innovation is not designation/ranking specific: Google as an organization believes that innovation can come from any vertical of the organization. They as a company always encourage all employees to think beyond the line and come up with new ideas. Focus on the User: The key behind success of the Google is that they are always user centric in their innovation. In every stage of the development they try to make it simple for their user by implementing key word finding which helps the user to save time. Aim to be ten times better: In the light of innovation Google always try to innovate their application 10 times better than the previous or existing one. Their fundamentals regarding innovation based on the fact that if every employee believes that they will increase their performance by ten percent then as a whole it will be an incremental change. To make the change radical and ensure revolutionary innovation one must think about 10 time’s development. Give employees 20 percent time: This is the key behind success of the Google as an organization. They always believe in 80:20 work rule for their employees where 80% time is for daily office work and 20% time everyone must devote to innovate something to make the existing process more accurate and better or making some revolutionary one for the future. Apart from the abovementioned innovation Goggle as a company also relies on 5 other innovation principles such as: Bet on technical insights; Ship and iterate; Default to open processes; Fair Well and most importantly ‘have a mission that matter’. (Leong, 2013). Project Glass: An Overview and Google’s other innovative projects: Google first introduced its new innovation in front of the world during the month of April, 2012. Project Glass is not the name of the product, but it is a program devoted to developing a wearable device that bear a resemblance to glasses but can perform all of the utilities of a smart-phone. In principle, the main objective of the project glass is to transform personal telecommunication with the help of a basically different stage to connect with others and the nearby environment. (Imanbayev, 2012). It is significant to be aware of that fact that Project Glass is in very early stage of testing. At present, the designers have not certain about the final design and also not yet finalized whether this is going to be a stand-alone product or if it would be linked to and work off a isolated smart-phone. (Goldman, 2012) With the public exhibition of Project Glass, Google may be at the foremost position of a budding area known as wearable computing. Different other companies are also going through the trial of the same kind of products but being the trend setter in this field Google with their innovative advantage able to make it sure that their competitors are far behind them.(Bilton, 2012). The main advantage for Google in the field of wearable computing is Google X Lab and group of outstanding engineers who lead different path breaking projects. Project Glass is a creation of Google X, a secretive lab where Google tries to tackle projects that not only appear but may literally be out of this world. One such example is to create an elevator into outer space. Apart from these few others projects which they are presently working on are like reforming refrigerators to be linked to the internet to order foodstuffs as soon as they run out; planning a dinner plate that could identify the food and update the same into any social networking site etc. (Miller and Bilton, 2011) SWOT Analysis of Google: Following is the swot analysis of Google keeping in mind their main objective of innovation is the backbone of the overall performance. In this part the main objective is to analyze how the innovation helps the company to get a strong hold in the market and also how it helps to overcome the weakness and possible threats that they have. Strength: Open source products and services: Starting from the very early day’s company always looks for innovation and gives the customer a simple application by which they can get access to every required thing. Be it Google maps, calendars, drive, books everything is very user friendly in nature. From that perspective Project Glass is also a part of that open source product which they developed keeping in mind the requirement of the customer. Quality and customer experience are the primary objects: All the products and services that the company offers are of premium quality. Most of the applications of Google are free for the customers and therefore there are no better alternatives available for the user in terms of covering all requirements related to search engine, mail services and also other additional requirements. Project glass is also an added initiative to the company’s never ending services for the customers but the only difference is it is a paid product. But the utility of this is unquestionable. Financial situation: Financially the company is very strong with a yearly earnings of nearly $50 billion and $11 billion profits, The debt is as low as $7 billion at present.(Net market share, 2013) Apart from the above mentioned strengths the company has the privilege of having access to the largest group of internet users worldwide with strong patents portfolio. To go with that, Google also has strong product line integration and culture of innovation in their work ethics which helped them to gain strong position in the market. (Google Investor relation, 2013) Weakness: The major weakness of the company is that, it relies on a single source for major income ason date and that is the advertisement and potential hit to certain search result of other companies by the client. Google as an organization has very little paid service. Recently they started to make steps in the mobile industry but there are also various low price companies who are providing almost same kind of facilities in their mobiles like Google. Likewise their new innovation project glass is yet to set the market into storm. Mainly this new innovation is slowly generating market in the USA and UK but in developing nations like India, China they have to cut down the prices of the product or have to develop variety of the same with lower price to capture the market. Apart from the above mentioned weakness, following 2 are also points of concern for the organization like unprofitable products and patents issues. (McCue, 2012) Opportunities: With the innovation of project glass and continuous development of the existing product as a part of their corporate strategy, Google has following opportunities to get a even stronger hold in the software market. These are: Growing number of mobile internet users to gain more popularity in the market Obtaining different patents through different mergers and acquisitions Launching new varieties of product along with project glass (Eg: driverless electronic car, new models of notebooks, tablets and smartphone). As a company they kept all this in the introductory level. If they come in with full faze then they can easily capture the market. Google as an organization is now looking to focus on launching new fiber cable which can make the use of internet 100 times faster. This can bring new innovation in the internet using making Google the undisputed king in terms of search engine and other path breaking products.(Garside, 2013) Threats: Growing use of mobile internet is decreasing the income opportunity for the organization. Another threats for the company is the number of unprofitable products and very restricted source of income. Presently Google is facing a severe competition from Microsoft in terms of market share. The windows 8 of Microsoft are another competition for Google in terms of mobile OS devices. Likewise Google also faces a tough challenge as they are currently accused by EU for “using its dominating position in internet search engine market to display its own services higher than competitors’ in search result”. (Finley, 2013; Jurevicious, 2013) PEST Analysis of Google: Politically Google is busy facing several challenges from different countries. They used to face pressure regarding the archiving the search result and also about allowing anything and everything to be searched from their search engine. The second case is an issue in China where they faced challenges about the search topic. (Buncombe, 2006). To resolve this they have added the privacy part is their search page from where the user can learn about the policies of Google in terms of searching and other activities. Economically USA is going through recession and stalks are trading 52 weeks low. But as a search engine company Google is not facing the heat as their maximum earning is from the internet advertisement and the rate of usage of search engine is not affected by the world economic slowdown. Moreover, regular development of all applications by Google, making it more competitive to be at the top of the user’s choice list.(Schiffman, 2008) Socially internet and use of search engine are now almost like a daily product for the entire household. Now days, mobile phones are also coming up with internet device by which users can find out almost anything and everything. Google earth, road map, navigation all are such innovation which make Google unique in this parameter of social use of internet. Project glass is an added advantage to that. Technologically Google is miles ahead of their competitors in the market. With the time they are regularly upgrading their search engine, the variety of services making it more users friendly. Moreover, in the world of internet access they are the pioneer in many fields so the first mover advantage is always with them. Google offers personalized search engine in over 115 countries and with the availability of variety of language Google able to get a strong hold on the market. (Morrow, 2008) HR and Information Level strategies: As accompany Google always follows a work culture which support innovation. The corporate strategy of Google is the key behind all this path breaking innovation which they are able to produce. The top management of Google is diversified according to various value chains. With the global presence those positions are again diversified depending upon the requirement of the area. The HR policy of Google is also very employee friendly as Fortune for 2 consecutive years 2007 & 2008 nominated them as best company to work with. In the latest report also Google ranked number 1 in the list. (Mcdill, 2014) Another key behind their innovative success is the 70/20/10 rule adopted by the company. It is more like a developed version of their 80/20 work process. According to the rule employees are encouraged to be busy with core work for 70% total office time, 20% on related projects as the company is working that point of time and remaining 10% of time with unrelated new business. Those last 10% is the key behind the path breaking development of the company. (Battelle, 2005). The 20% time is a good initiative as most of the Google’s entire new product developed from that Free Time activity. Conclusion: From the above analysis it is very clear that by giving freedom to the employees to work according to their wish Google as an organization set itself miles apart from others. In the world of search engine, and other related service there are nobody close to Google. In the world of navigation, road map, online book store, navigation all this are the key delivery of Google and most importantly they never charge from the users which making them unique and most user friendly. Appendix Diagram 1: Stakeholders of Google, Morrow, (2008) Diagram 2: Revenue Growth of Google from 2003-2007, Morrow, 2008 Diagram 3: Search engine Market share, Morrow(2008) References Bilton N. 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J. (2012). Apple #1, Google #2 - 50 Innovative Companies Ranked By 1,500 Execs, retrieved on 28.2.2014 from http://www.forbes.com/sites/tjmccue/2013/01/10/apple-1-google-2/ Mcdill K.; (2014), Fortune Magazines Best Companies to Work For; Millionaire corner, retrieved on 28.2.2014 from http://millionairecorner.com/Content_Free/Fortune-Best-Places-to-Work.aspx Morrow B.; (2008), External Analysis of Google Inc.; retrieved on 28.2.2014 fromhttp://benmorrow.info/blog/external-analysis-of-google-inc Net Market Share (2013). Market Share Trend Highlights. Retrieved on 28.2.2013 from http://www.netmarketshare.com Schiffman B.; (2008); As Downturn Looms, Google Looks Recession-Proof; WIRED; retrieved on 28.2.2014 from http://www.wired.com/techbiz/it/news/2008/01/google_recession Sylver B. (2014), What does "Innovation" really mean?; Core77 Article; Retrieved on 27.2.2014 fromhttp://www.core77.com/reactor/01.06_sylver.asp Diagram Bibliography: Morrow B; (2008), External Analysis of Google Inc.; retrieved on 28.2.2014 from http://benmorrow.info/blog/external-analysis-of-google-inc/ Read More