A Competitive Advantage in the Internet Business - Essay Example

? Executive summary The executive brief seeks to critically evaluate the business strategy employed by Google China in order to ascertain the viability of the organisation in its operations in the internet business. A close analysis of the case study shows that the organisation is strategically positioned to enjoy a competitive advantage in terms of the uniqueness of the strategy used. The organisation’s strategic direction is clearly outlined such that it is easier to attain the organisational goals set by the company. The strategy used by Google China is sustainable given that internet business is booming and it has state-of-the art infrastructure which makes it different from the other competitors. However, it has been recommended that the organisation should comply with the rules and regulations imposed by the Chinese government since it is the duty of each country to regulate the operations of organisations within any given country. It has also been recommended that Google should upgrade its infrastructure to counter the negative impacts of cyber attacks on its website. Table of contents 1.0 Introduction----------------------------------------------------------------------3 2.0 Google China’s strategic position--------------------------------------------3 3.0 Analysis of the organisation’s strategic direction--------------------------4 4.0 Evaluation of the organisation’s strategy -----------------------------------6 4.1 Suitability of the strategy---------------------------------------------6 4.2 Acceptability of the strategy-----------------------------------------7 4.3 Feasibility of the strategy---------------------------------------------8 4.4 Sustainability of the strategy-----------------------------------------9 5.0 Recommendations--------------------------------------------------------------9 6.0 Conclusion----------------------------------------------------------------------10 7.0 References----------------------------------------------------------------------11 1.0 Introduction This executive brief seeks to critically evaluate Google.cn’s strategic position in its operations in the internet business in China. The brief also seek to analyse the organisation’s strategic direction, with a clear identification of the methods by which the organisation’s strategies have been pursued in its operations and in this case, a SWOT analysis will be used. A critical evaluation of the organisation’s strategy in terms of its suitability, acceptability, feasibility and sustainability will carried in the brief and a conclusion and recommendations regarding possible new strategic directions will be given at the end of this brief. 2.0 Google China’s strategic position Google is strategically positioned given that its marketing teams are based in three major first tier cities namely: Beijing, Shanghai and Guangzhou. These are the most populated cities with the highest number of users of the internet. The aspect of geographical location is very important with regards to the viability of the organisation and positioning in this case is mainly concerned with the areas where infrastructure to support the operations of the organisation can be developed as well as the place where employees can operate from. The aspect of positioning in this case also entails the way this organisation is perceived by the people in the market. A close analysis of the case study shows that Google China uses a differentiation strategy and this has helped it to strategically position itself in the market. Porter (1985), has argued that a firm needs to have sustainable competitive advantages and there are two sources of competitive advantage; cost advantage and differentiation. In a differentiation strategy used by Google.cn, an organisation seeks to be unique from other competitors in the industry where it offers services that are valued by the customers. Its position is entrenched by its ability to customise the search engine according to Chinese users’ language needs as well as launching a series of services to complement the search function. Through development of a strategic partnership with China Mobile, China’s largest telecom service operator, the organisation’s strategic position is strengthened and this gives the organisation a competitive advantage over other rival competitors. 3.0 Analysis of the organisation’s strategic direction In order to critically analyse the organisation’s strategic direction paying particular attention to identification of the methods by which the organisation’s strategies have been pursued, it is imperative to conduct a SWOT analysis. A SWOT analysis defines the relationship between the internal and external environmental factors in the appraisals in strategic analysis (Robinson 1997). Basically, SWOT stands for strengths, weaknesses which represent the internal environment of the firm while opportunities and threats are external environmental factors. It is primarily concerned with analysing the key factors of the environment and the fundamental internal strengths and weaknesses of the organisation which will help dictate the strategies appropriate to the firm. This must be based on a realistic appraisal of the organisation’s past and present performance especially in the case of Google.cn. The organisation’s strategy must take into account its resources and competitiveness in as far as its strategic direction is concerned. Therefore, the objective of this analysis is to use the strategic pointers in order to use the existing business strengths to exploit the opportunities, create new opportunities, to counteract threats and repair the weaknesses (Robinson 1997). The major strength of Google is that it uses a complex set of highly developed processes in terms of innovative offerings and it also has a cutting-edge information technology infrastructure. In as far as strategic direction is concerned, this can go a long way in entrenching the position and strategy of the organisation if properly implemented. This gives it a competitive edge which makes it possible to attain its strategic direction with the aim of positively influencing the behaviour of internet users in China. It can be seen that the organisation is in the right direction if it harnesses its strengths. However, more needs to be done with regards to the weaknesses of the organisation as this has a bearing on its strategic direction. It has been criticised by the Chinese authorities for showing pornographic content on its website. In typical defiance, the organisation does not show any remorse and this can negatively affect its direction. China is a conservative society and there is every need for the organisation to comply with the rules and regulations in order to ensure its survival. As noted from the case study, Google’s actions drove away some of the users, pushing them towards its rival Baidu. There is need for the organisation to minimize these weaknesses so as to be strategically positioned to pursue its aims and objectives. Google.cn has opportunities to establish itself as a force to reckon with in the internet industry which can positively influence its strategic direction. Google has unique features such as Google maps as well as free video facilities and these have been pursued in a positive manner which gives the organisation strength to set a proper direction for its operations. If the organisation harnesses on the opportunities available to it, its direction will be clear and it will be able to achieve its goals of enjoying the popularity as the best search engine globally. In most cases, the organisation’s ability to transform its operations can set the right direction which can be pursued for the betterment of its performance as a whole. There are some challenges that can threaten the pursuit of the organisation’s direction. It has been observed that competition is a major threat to the viability of the organisation and there are rival competitors like Baidu, Yahoo, Sohu and Sina in this field. In order for the organisation to be viable, it must put measures in place so as to counter the threats posed by the competitors otherwise these can negatively impact on the organisation’s strategic direction. The essence of business is to attract as many customers as possible in order for it to remain viable. Another impediment to the organisation’s direction is the self imposed censorship by the Chinese government. This does not allow users to access all the information they want and this can negatively impact on the operations of the organisation. It has also been noted that hacking and phishing scams are the other factors that affect the organisation’s strategic direction. This is a major setback given that users will feel insecure to use the site as their information will not be safe. There is need to put measures in place in order to counter these negative developments which can impact on the strategic direction of the organisation. 4.0 Evaluation of the organisation’s strategy in terms of its suitability, acceptability, feasibility and sustainability 4.1 Suitability of the strategy Google China’s strategy is mainly based on a differentiation approach and this is suitable for a market like China where there are no external internet service providers as a result of the laws promulgated by the Chinese government. This strategy is suitable given that it brings variety to the world of internet search in China. Another area which makes this strategy suitable is that a lot of information about any given subject can be accessed from Google unlike the other search engines that are available in China. Scholarly information can be accessible which makes research easier for the people who will be involved in different studies. During the contemporary period, it can be noted that the internet is slowly replacing hard text books and these can be found on Google so the strategy by this organisation is very suitable for the Chinese people. It actually meets the needs of almost every person who searches for a particular subject on the internet. The other point which makes Google suitable is that the website is user friendly and the cutting edge technology used in development of the infrastructure makes it capable of storing large volumes of information. 4.2 Acceptability As long as Google.cn complies with the regulations of the country, its operations will be acceptable as it will offer another alternative in terms of internet search engines. It can be seen that organisations do not operate in a vacuum but in environments that are governed by laws and regulations put by the respective government of that country. For instance, Google’s strategy is acceptable in China if it complies with the rules and regulations of which failure to do this will result in negative perceptions by the customers. In this case, regulation can be defined as “action formed and carried out by government, and it is the normal rule or special action that directly interferes with market allocation mechanism and indirectly change the decision-making of the enterprise and consumer,” (Spulber N.D. as cited in Zhao 2008). It has been noted that as a result of its uniqueness, Google is acceptable in China given that it has valuable information to different users. If an organisation does not violate the norms and values of the people of a specific country, there will be likely chances that people will accept is as a partner in business. From the look of things, it seems that Google.cn has managed to gain considerable ground since it launched its operations in China in 2006. Google launched its operations in China in the belief that a more open internet will benefit the Chinese people in view of the government’s regulation and censorship hence its stance on freedom of expression is acceptable given that its services would provide an alternative voice to the suppressed people. Another factor which makes Google acceptable is that it does not threaten the security concerns of the Chinese government. As noted in this discussion, in as far as an investor in a particular country complies with the rules and regulations of that country, chances of being accepted by the citizens will be high. 4.3 Feasibility The element of feasibility is a bit tricky with regards to the organisation’s strategies. In terms of infrastructure, it is feasible for the organisation to put structures that will make it possible for it to roll out its internet services to the clients. Google has the best engineers and these can put up feasible structures that will make it possible to operate effectively in the internet industry. The strategy of the organisation in this particular case is likely to be feasible given that China has a good telecommunication infrastructure in place. Internet business is supported by the telecommunication structures and in this case, it can be noted that Google has entered into a strategic partnership with China Mobile, China’s largest telecom service operator which entails that the organisation’s strategic position is strengthened and this makes its strategy more feasible in its operations. However, one major challenge to the feasibility of the organisation is the element of cyber attacks and surveillance by the intruders. There are likely to be viability problems if people shun the services provided by the organisation because they will feel that their information will not be secure. It is imperative for the organisation to put infrastructure in place that will block the intrusion of the hackers. Failure to do this may result in more leakages of important information to the third parties which will jeopardize the viability of the organisation since people will be scared of losing important information. These loopholes are a threat to the feasibility of the organisation though they can be minimized if proper measures are put in place. 4.4 Sustainability Internet business booming during the contemporary period and the number of internet users is increasing by each passing day. For instance, it was estimated that internet users in China reached 384 million by the end of 2009, up from 45.8 million in 2002. This is testimony that internet business is booming hence it is sustainable. It can also be noted that online advertising has been growing between 20 and 30 per cent per year- twice the print media’s growth. The bulk of the revenue generated from this kind of business comes from the advertisements placed online which shows that this business is sustainable in the long run as there are positive indicators of growth and development in the industry. 5.0 Recommendations To a certain extent, each country must put in place policies that are suitable especially with regards to protection of the interests of the people as well as the economy as a whole. It is therefore recommended that Google.cn should comply with the rules and regulations imposed by the Chinese government so as to minimise chances of unnecessary clashes with the authorities. It is also recommended that Google should upgrade its infrastructure in order to block intrusion and cyber attacks as this can scare away the users as they will feel uncomfortable to use this service as a result of fear that their personal information and data may not be secured. 6.0 Conclusion Over and above, it can be concluded that Google.cn is strategically positioned to gain a competitive advantage in the internet business given that its strategy is unique compared to the other competitors as discussed above. The internet business is booming and it can be noted that this industry is sustainable if correct measures are put in place to pursue the business goals set. In order for Google.cn to be acceptable, there is need for the organisation to comply with the rules and regulations of the Chinese government so that the users will not doubt the credibility of the organisation. 7.0 References Porter, ME 1985, Competitive Advantage; Creating and Sustaining Superior Performance, The Free Press, New York. McCarthy, JE & Perreault W 1996, Basic Marketing: A Global Managerial Approach, 12th Edition, Irwin McGraw-Hill, NY. Robinson W 1997, Strategic Management and Information Systems, 2nd Edition, Prentice Hall, London. Smith, PR 1999, Great Answers to Tough Marketing Questions, Kogan Page, London. Zhao, Y 2008, The International Comparison on the Regulations of Cross-border Merger and Acquisition, School of Education, Huazhong University of Science &Techology. Read More