Googles Background, Major Products, and Services - Case Study Example

Business Strategic Assessment Name Institutional Affiliation Executive Summary This report critically analyzes Google’s background, major products, and services, external and internal environment and summarizes the findings of the research. A brief, relevant introduction that explains the organization’s background is done to understand the roots of the concerned organization. The major products and services that the company offers are outlined for the reader to have a better understanding of the company’s dealings. The external environment analysis is done through the PESTEL model. This model stands for Public, Economic, Social, Technological, Environmental, and Legal analyzes of the organization (Information Resources Management Association 2015). Further, the competitive analysis is done using Porter’s five analysis. This analysis looks into supplier’s negotiation power, the buyer’s negotiation power, the threat of new entrants, rivalry and threat of substitution. The report goes on to study the internal analysis of the organization under SWOT analysis that is; Strengths, Weaknesses, Opportunities and Threats facing the organization (The United States. 2008). Google has managed to be the best in search and makes billions of profits year by year through advertisements. However, withal these successes, there are some flaws that the organization has. For example, the overdependence on advertisements can be remedied by a venture into other opportunities. Also due to mistrust of privacy, the organization needs to invest more in the privacy issue to assure the market that the problems of privacy would be sorted. In conclusion, the company is a big player and dominant in the market. However, to be able to maintain that, the weaknesses have to be eliminated because rival companies offer stiff competition. Introduction The year 1995 saw the birth of a search engine named Google from Larry Page and Sergey Brin (Scott, 2008). Their view was to create a search engine that linked through different websites. The criteria used in that system was by the number of pages and the importance of the information in scope thus the name “PageRank”. The organization was registered on September 15th, 1997 and later made to be a legally recognized company on September 4th, 1998. From a misspelling of the word googol came the name Google. Googol is a large number that is numerically denoted as one and a hundred zeros. In respect to Google, it showed that the company was aimed at handling vast information. The organization is mainly concerned with internet- related products and services. The headquarters of the organization are in Mountain View California. Looking at the size of the organization, following the 2014 data, Google had total assets of US$131.133 billion and total equity of US$104 .5 billion. The organization was made public on August 19th, 2004 with the two founders owning 16% of the shares. Google’s products and services The major products and services by Google include; search engine, advertising, enterprise products, productivity tools among others (Wang, 2013). In being a search engine, Google has managed to attain dominancy in the United States by having a market share of 65.5%. To enhance the search to be more convenient, it has billions of web pages indexed. This makes it easier to search a document as you just need to key in the keywords. In advertising, Google recorded $10.492 billion in the fiscal year 2006 courtesy of advertising revenues. Other revenues for example licensing gained them $112 million only. This significantly shows the strength of the advertising bit in the organization. Different ways in which it does the advertising is through AdWords and AdSense (Bottle Tree Books LLC, 2005). AdWords is where advertisers advertise through the content network. Payment in this is through the number of clicks or views the advertisement gets. AdSense, on the other hand, is whereby advertisers advertise in individual websites. This becomes a source of earnings to website owners through the cost-per-click scheme. In enterprise products, the company launched the Google Search Appliance to assist large organizations in search technology (ADBIS & Kalinichenko, 2003). Also through Google apps the organization has been able to segment some websites in their domain. By acquiring Postini, the organization bettered the security of the apps. Through these apps, the organization gets revenue when downloading and using the service. In the productivity tools, Google has perfected its email product Gmail to be an outstanding email. The email was the first to have a gigabyte and also to keep conversations as internet forum in one thread. It has also used AJAX in the email that makes it active thus one need not to frequently refresh the page for new notifications. Among other productivity tools by Google are Google code, Google Drive and Google for work. Google does not have a specific audience to target as the market. It ranges its products and services to fit anyone at any age from social networking example Gmail to business products example the AdWords and AdSense services. It also caters for scholarly work being a search engine it supports researches and findings. The External Environment Assessment of the external environment factors using PESTEL model. Political factors assess the extent to which the government affects the economical trend of a country. An example of such factors includes government policies and the political stability of the nation. Since the organization contains so much information, some highly confidential, there is barred access to the servers by any government. The organization’s intention to take the internet to the rural areas through balloons and cell towels known as Project Loom has faced so much opposition. The reason behind that being that other governments see that as an espionage conspiracy by the US thus other nations could not allow (Osman, Anouze & Emrouznejad, 2014). Furthermore, the organization has lost popularity in China because of being suspected to have negative political agendas and encourage a change of culture and values instead of doing business. However, there are some few positives on the political grounds of the organization. There is an increase in sales as the result of increasing political research done. Also, if the government is stable, it supports businesses that in turn seek more advertising benefitting the organization. Globalization is also a boost in the organization as it causes more companies to search for customers around the globe. The threat here may be government-sponsored companies that may restrict the dominance of Google in particular countries; China is an example in that case (Lye, Chen & National University of Singapore 2010). Economic factors include the economic aspects in a country that affect the organization. These aspects include; disposable income of consumers, the economic growth of the organization, interest and exchange rates among others. These can be further divided into macro-economic and micro-economic. Macro-economic mostly focuses on the demand of a particular economy that is; taxation policy, interest rate, and the government expenditure. On the other hand, micro-economic focuses on how individuals spend their income towards the organization. Due to Google’s dominance as the best search engine, the organization has surpassed critical dangers with very minimal damage. For example in the 2008 crisis, Google recorded 3% declination only in the average revenues. This was however not the case with other competitor businesses and different businesses around the world that faced a sharp plunge due to the crisis (Global Economics Crisis Resource Center 2009). The Growth Domestic Product (GDP) of different countries rises year by year. The external and internal investment of Google will always be high as long as the GDP is on the rise. This signifies more indulgence in business by the country’s nationals. Due to this, many people use the search engine to do research about their businesses, adding more revenue to the organization. The interest rate of a country may be positive or negative. When interest rates increase, there is an increase in investment this leads to taking of loans by companies to better the services or invest. In either case, Google benefits because there will be more advertisements done if the companies has money. If the interest rates fall, investment also falls leading to decreased advertisements on Google, therefore, reduced revenue. Just like the interest rate, the inflation rate may rise or fall. However, many countries have recently experienced an increase in inflation. When the inflation rate rises, companies benefit while people suffer. This is because the raw materials will increase making the price of the products also to be increased giving more cash to the companies. Again, more money to the companies would mean more advertisements therefore increasing Google’s revenue. A fall in the rate of inflation and the prices would mean less money to the companies thus less advertisement. Also, economic stability and growth of developing countries offers Google with utmost opportunities to invest in such environments. The social factor is concerned with the beliefs and attitude of the people. This factor involves matters of demography, consciousness population growth and the age distribution of a certain locality. Google is a multinational organization. With Google, different cultures are shared because many people around the world have access to Google. This means that the organization does not have discrimination against a certain demographical group, age or gender as to use any Google product one only needs an internet connection. Therefore, there are no heavy financial barriers or cultural ties that restrict the usage of Google. This factor makes it more marketable as anyone from any place in the world can advertise in Google get a positive response. Through the organization also there has been a change in the old norms of working from the job place. This is because with Google some jobs can be done from anywhere in the world as long as there is connectivity to the internet. Due to this there has also been job sharing through outsourcing. Businesses too have benefitted from the organization as there is instant communication via Gmail. Through Google drive, large documents can be shared. Sharing of cultures and trends is majorly supported by the organization through social sites like Youtube and Google+. More people use the internet as time goes by meaning the demand and market of Google keep on increasing. This is because knowledge and information are vital for human development. All those factors are opportunities to Google. However, there are some threats that the organization faces. Google saves personal data and searches and sells them to some companies for them to know peoples preferences for advertising. The company, however, refused such claims. Also with Street View, Google had created an application with google earth that was able to zoom to street view This received complaints from the public as to some people their privacy was being interfered. Google responded to this by not making further advancement to the camera installation. People showed lack of trust in the organization (López-Tarruella, 2012). Lastly, the sprouting of social media example Facebook is a major threat to Google. This is because these social sites also do advertising that is a major income earner to Google (Pride & Ferrell, 2016). . The technological factor affects the marketing of an organization’s products. Technology impacts the production, distribution and communication to the target markets. Google, by all aspects, is a technological organization. From the operations, all the way to the products or service production the organization is technologically based. The multinational organization has been at the forefront of encouraging innovation in many aspects of life. By the use of efficient and reliable search engine, it acts as a basis for people to keenly and efficiently do research (Information Resources Management Association 2015). With an I.T infrastructure that is guarded and kept secret, Google has been able to make the competition stiffer treating the infrastructure as their competitive advantage (Whittaker, Arbon & Carollo, 2012). The organization has also had many successes from Gmail a mail with ample storage to AdWords and AdSense programs that foster advertisement. It has also catered for easier socialization through social sites like YouTube and Google+ among many successes that the organization has. It has also invested in the developing countries by improving the internet access that serves as an opportunity for them. This is because if they manage to supply the internet then they will earn revenue through contracts and agreements. Because almost everyone in this era owns a phone, the organization has recently concentrated on creating apps through Google Apps that enable the user to operate favorably without searching the internet. The switch to mobile phones will surely increase the revenue of the organization because of easier access to the products. The environmental factor mostly deals with the pollution dangers and ethics. Since Google is not a hard processing plant, it is an environment-friendly organization. Most of the product processing done and service rendering is done using computers. Google also facilitates the spread of good environment practices worldwide through its sites. It also welcomes those with ideas that could have fundamental gain to the wellbeing of the environment and considers their customers responses, both of these issues offer opportunities to the organization. However, there are some ethical issues that are a concern to the organization. Different people have different believes in the world this is what makes us diverse. Some are right to some minority but conventionally wrong example, Islam radicalism, suicide forums Anorexia among others. These websites are found in Google something that most find wrong. The organization also illegally uploads books to be read online for free. This causes an advantage to the organization, but a loss to the author of the book since people will be getting it for free. Also through the search engine and registration of some sites like Gmail, one fills his or her information there something that may be used in spying. This symbolizes that many feel unsafe with the organization’s data handling. The legal factor deals with aspects such as consumer rights, safety, health, product labeling and safety among others. It makes the organization play within the legal limits. In this factor, Google is accused and even taken to court in several accounts for infringement of copyright. The reason behind this is because the organization uploaded millions of books without the authors consent. Google has also been accused of defamation of particular personalities and businesses for instance Bettina Wulff. The organization has been spearheading some propaganda in putting some businesses in bad light to the public. Hence creating doubtable information to the consumers. All is not lost, though, through improving their privacy and assist in innovative techniques to get rid of violation of the intellectual property rights the company can exploit opportunities. Porter’s five analyses Porter’s five analysis with respect to Google. First is low supplier negotiation. This is because of Googles dominance in the market as many of its products, for example, the Android system have been sold to many phone companies (Milette & Stroud, 2012). The system has shown great success in the market and due to this, the phone suppliers have to be friendly to Google. In their advertisement systems both the buyer and the sellers are Google clients, and this has greatly aided in making higher revenues for the company. The second factor is strong buyer negotiation power. The competition is stiff as there is no cost in the entrance and leaving the different organizations. The market can change at any time depending on preferences and tastes. Therefore, Google has to be outstanding in search to prevent Yahoo from gaining. Also, it has to be perfect in the operating system to prevent Apple’s iPhone and Windows from taking over the operating system phone industry that Android is dominant (Milette & Stroud, 2012).. Thirdly is the threat of new entrants. In this factor, Google has a moderate threat. Google has several competitive advantages among them being a strong brand name. New competition is also limited by patents by the organization. Another competitive advantage they have been an advanced technological know-how that makes them the cream of others in search and other products. Many users also tend to stay loyal to the already existing brands or take time to switch to new upcoming brands. Those factors make it hard for a new brand to be a threat to Google because event the starting capital would be enormous to compete. The fourth factor is the threat of substitution. This threat is low as there is no switching cost from one provider to the other. Google gets most of their revenue from advertising. If people decide not to, they may make great losses. However, more people are turning to online advertising as time goes. The internet is the provider of the platform for all this, and there is no substitute for the internet. As long as Google continues to innovate and perform efficiently, there is no risk of substitution as each year more users are recorded (Micheal Porter, 2008). Lastly is the rivalry of fellow companies. In the search engine, Google competes with Yahoo MSN and Bing but through product enhancement and differentiation Google has emerged the best option for many. In the other product that is the operating system Android, Google has competitors like iPhone from apples and Windows. Google has dominated the market due to the ease of using the system and the efficiency. Many companies now produce phones with Android thus further saturating the market (Milette & Stroud, 2012). Internal Environment SWOT model in an internal analysis of Google. In the strengths, Google has an advantage over it’s over competitors in that it has Google translate that makes it easy for anyone at any place to use the services and products it offers. It is also reliable, dependable and most importantly fast I searching that makes it efficient in research. Its simple nature makes it easy to navigate through and by any user regardless of the knowledge of the different services or products. It has the AdSense program that aids greatly in earning income to the customers of the organization (The United States. 2008). In assessing the weaknesses that the company faces, it lacks some few information that lead to a dead end, example lack of citations and full-texts of particular documents. Also, the company is dependent on advertisements so much that if anything may obstruct the advertising systems, the company may face great losses. Another weakness of the organization is that sometimes it does not allow compatibility with some devices. The company also has some opportunities, first being the Android operating system that allows Google application in the phones, therefore increasing the market. Another opportunity is about cloud computing. This acts as a backup or extension where the organization can move into the market through cloud computing. Diversification into other ventures other than the advertisement industry as the company is over- depending on advertisement as the main core. The presence of Google map and Google books are the direction towards none- dependence. Threats to the company include competition from mega social sites led by Facebook. This is because as the company is over dependent on advertisement. Recently Facebook has been doing advertisements, and they are increasing because more people are joining the site. To add on that, Facebook knows personal information about each user through likes, and personal details like age and gender, therefore, knows the appropriate products to advertise to each group of people. This is unlike Google, which knows less information (Pride & Ferrell, 2016). In summary, the external environmental issues that affect Google include; government stability, the GDP, interest and inflation rate. Others are; consumer demography meaning anyone can access, culture sharing, value erosion and inflicting ideas, the growth of internet, privacy, mistrust and violation of copyrights. Internal environmental issues include; a strong brand name, simplicity, reliable and fast, overdependence on advertisements, the emergence of gigantic social sites. All in all, Google is an able and well-financed organization and has a competitive advantage on the I.T. These factors make it a very hard for competitors and new entrants to perform better than Google. The dominance in Google is brought by the initial existence of the company having many people who are scared to move or use new platforms having another advantage over rival companies. References Top of Form United States. (2008). SWOT analysis: A tool for making better business decisions. Washington, D.C.: U.S. Dept. of Agriculture, Risk Management Agency. Bottom of Form Top of Form Information Resources Management Association. (2015). Business law and ethics: Concepts, methodologies, tools, and applications. Top of Form Srikantaiah, T., Koenig, M. E. D., & American Society for Information Science and Technology. (2008). Knowledge management in practice: Connections and context. Medford, N.J: Information Today. Top of Form Scott, V. A. (2008). Google. Westport, Conn: Greenwood Press. Top of Form Wang, J. (2013). Implementation and integration of information systems in the service sector. 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