Google Case Study - Research Paper Example

?Google case study Analysis of Google Market and situational analysis One of the greatest and the best USP of the company called as Google is the ability to personalize to the form of business that it is catering to. The types of applications that Google caters to are different among the different segments. However, the rates of the services are greatly varied and user dependent. Certain of the services that Google provides are completely free while the other services are charged accordingly. However, the interesting thing here is that the charge is customized to the scope, size and the capacity of the firm. SWOT Analysis SWOT Analysis is the one of the most effective and widely used tool to conduct situational analysis. SWOT stands for Strength, Weakness, Opportunities and Threats. SWOT analysis takes into account both the internal and external environments of a firm. Internally, the framework analyses the strengths and weaknesses with respect to the various key dimensions such as productivity, human resources, finances, capacity, etc. Externally, the framework analyses the market trends, economic conditions, regulations, technology, etc (Ferrell & Hartline, 2008). Following table helps in understanding the definitions of a SWOT analysis: The SWOT analysis of Google can lead to a very good understanding of the processes that are in place in Google and its positioning in terms of its competitors. Strengths Google has got various strengths in the industry that makes it stand out. The basic strengths that makes Google the market leader has been described here Google is the innovator and the pioneer in the field of search engines thereby giving it a head start over the other competitors The management style is open minded and Laissez Faire at its best. Thereby, the managerial decisions keep getting taken very fast that leads to avoidance of lag time and increased efficiency Large amount of incumbent cash and steady cash flow Although the switch value of the product is not much or almost nil, but the customers have shown immense amount of loyalty to the products of Google and Google as a brand The retention policies and the compensation policies at Google are some of the best in the world. Therefore, the attrition in Google is extremely low as compared to the general industry. This particular factor translates into the tapping of the intellectual capital for them which would allow for the better leverage of market conditions. This particular feature also results in the cost efficiency as a lesser amount of money has to spend in the rehiring process. The other factor that lowers the cost is the absence of training the new hires Most of the data is translated, thereby, it can be used by a large number of the international customers The products are compatible to most of the data platforms and hardware available in the market and therefore provide the competitive edge as there are no switching costs involved in the change from an existing platform being used by the user There is a strong amount of support that the company has been enjoying from the educational community making it the medium of choice as a search engine The products are considered to be extremely chic by the urbane customers that add to its appeal It has got very high profile corporate interactions with the top notch companies like Sun and Apple that make the products extremely innovative and the user finds them easy to use. It also results in great amount of acceptance of the products aiming the corporate lines. As for example, the Sun intersperses the Google features with the Java runtime library(Boone & Kurtz,1995) It has already set up a number of channels in the telephone market that has only added to the market value of the product Google has been providing the service of free Wifi for the entire cities and the public areas which has led to its popularity among the various groups and the common public in general. It has led to very good public relations that have only resulted in the fostering of the growth.(Boon,2003) Google has entered into an exclusive partnership with MySpace which has greatly aggravated its market presence. The addition of free apps in the job search engine of the portal has resulted in increased customer loyalty and traffic. Weakness Google has recently tries to purchase Double Click. However, the history of double click is extremely tainted and has been a major cause of concern. This may cause the occurrence of a public outcry against the search engine majors Google has certain features called as the save key word feature that has been a major area of concern. Another area of concern has been the no opt out feature. Both these are potential trouble areas. A lot of hue and cry has been raised by the groups called as the Junk busters and the Federal Trade Commission that has raised the ante against the major CDT, accompany that is based out of Washington has been recently doing the profiling for the company called as Double click and has raised a lot of storm . this could potentially affect the fortunes of Google also On the other hand, the continuous stream of information that has been demanded by the justice department for the various searches in order to bolster their case against the issue of violence, illegal transactions, terrorism and pornography has resulted in the loss of trust in the customers, who are looking for the other options There have been cases where the Governments have asked for specific information to be deleted. This can be seen in the case of the recent case in China where the government had asked the popular search engine to leave the country Google has always had pride in itself as a company because of the culture that had been inculcated in them. However, the employees who are coming from the other organizations are not so much into the change and fail to understand the culture of Google. This is resulting in the dilution of the work ethics Opportunities There have been a lot of browser options through the services of Firefox and Safari that have resulted in the increase of the online traffic Ratio of the indigenous browsers that could help in reducing the lag time between the search and the realization The upgradation of the current system in order to give real time feedback to the clients for the better usage facilities Redressal of the privacy concern .Google could look forward to the creation of new protocols that could serve as a benchmark for the other companies and serve as an example for the future (Kotler, 2002). The creation of the custom made databases and the other products for client usages Localization of the current processes for the better traffic and use by the people for the various activities The Chinese market can be targeted with the recent Mobile Company purchase The record and database access to the other governments. Development of good and congenial relations with the other Governments for the easy marketing of the products Creation of more Artificial Intelligence Products Development of the very good and efficient algorithms for the administration of the server The tie-up with Microsoft can be there so as to optimize the process of search and penetrate newer markets More expansion into the nascent field of three dimensional applications More entry into the third world countries They should look at expanding their current product line in the field of wireless They should also look at the aspect of better development in the fields of Television products The support to the small towns and the expansion through the tie-ups with the local search engines. Threats The size of the company is a cause of major concern because it interferes with the functioning of the company properly. The size of the company also presents a lot of operational issues as the operational efficiency of the company may be hurt.( Laermer &Simmons,2005) Google is heavily dependent on the foreign revenues. Nowadays there is a great fluctuation in the Foreign Exchange rates that could cause for a lot of problems. There are a lot of copy rights and issues over a lot of the products The perception of the people towards the privacy ethics of Google is another issue that needs to be sorted out The possible loss of business if other big players come into the fray. Two of the smaller companies may join forces to elbow out the current market leader ,called Google Legal tangles and copyright issues in many countries. Some of them are in the countries like as China and others that have got a strict control over the data that gets viewed by people. Microsoft has been slowly but surely garnering the forces against Google. This may create a lot of issues. Continuation of the services that are essentially free to the organization and the people is a major cause of concern. The sustainability of such an act is extremely doubtful. Rise of other smaller indigenous competitors in various other areas The public perception about the image of Google as master keeper of the data may eventually cause a lot of harm There has been a great crackdown recently on the online pornography. This may lead to a major upset to the company as the majority of the search is centered towards the pornographic and online adult content. The growing threat of the companies like Facebook that have continued to be resurgent and have shown tremendous growth. Porter’s Five Forces Analysis Porter’s five force analysis is an analytical tool which is very useful in analyzing the competitive environment. It is best when used to analyze the Strategic Business Units of an organization. It is useful to understand the various forces in an industry that will make an impact on the organization. What makes porter’s five forces analysis very useful is the fact that the analysis can be generalized and used to the other organizations in the industry (Henry, 2008). The porters five forces analysis of the Google is give down here. It quantitatively looks to deconstruct the various parameters that have made Google the company that it is. Potential of the Entry of the New Entrants The barriers of the entry of the new entrants in the search engine market are very high. Google has accumulated a lot of data over the years that look at the various behavioral aspects of the users. The search engine has thousands of servers located around the world that has led to the development of this particular model (Armstrong et al., 2003). Now, looking at these particular aspects, it is very difficult for the new users to enter the category and directly start doing something that may harm the company or its future beneficiaries. However, it can be stated that when Google entered the market, Yahoo and a few others were dominating the world market for the search engines. But, since its inception, it has eclipsed al the other service providers. Suppliers Google has developed a sustainable model of revenue for the buyers and the sellers. The company has developed a model where the buyer and the seller, both get an equal share of the advertisement revenue. The cost of the process is around forty percent, which is the same for both Google and its main competitors. So, as long as Google does not keep all the eggs in the same basket and does not rely too heavily on the customer base, everything should be fine. Customers As of the current data that has been found, none of the revenue of Google comes from one particular single source. Although the advertisement revenue of Google stands close to around ninety-nine percent, not more than three percent generally come from one company. The company also ensures that the search criteria re made in such a way so as to ensure that the revenues are larger from the more popular words, whereas the revenues from the obscure words are a bit less. This ensures that it caters to all the necessary public, thereby keeping the overall dependency on the buyers low. Threat from the Substitutes The internet has become the current mode of choice for all the people to search the information. So, looking at that particular aspect, it really does not have many problems in that area. Google has also been coming up with a lot of advertisements that seem to target a much wider audience and tend to please them .therefore, it has also gone into the field of development of a large number of applications that have resulted in its dominance as the number one player. A lot of new products in three dimensional models are being brought out that reassert that particular concept. Competitors Google currently heads the search industry market and it had been doing so over a long time now. The model followed by Google enables it to have a proper look at the various formats that can be studied. Therefore, the dominance of Google in the world market can be seen as a phenomenon that is well accepted and can be understood. Through its custom directed searches, Google may well look into the possibility of it gaining more amount of market share. McKinsey 7S Framework McKinsey 7S framework is a very well known model to understand the degree of internal alignment in an organization. McKinsey 7S framework was devised by Robert Waterman and Tom Peters. The essence of the framework is that the organization is not a single individual body but a sum of its numerous parts. That is, the internal dynamics of an organization is what decides the ability of an organization to compete in the industry. It is the structure and the strategy of the organization that decides the overall effectiveness of its management and in turn, the success of the organization (Witcher & Chau, 2010). The above image shows the seven variables that form the McKinsey 7S framework. It is the effectiveness of these seven variables combined that lead to the overall success. Following is the analysis of the internal dynamics of Google (SBU) according to the McKinsey 7S framework: Strategy Strategy is the actions that an organization plans and implements with respect to the changes in the external environment in order to continue its growth. Google initially had adopted the strategy of developing its products in-house. Most of its initial products like Google search, Google news, etc have been developed in house. But the company’s strategy has evolved over time in order to meet the new challenges and beat the competition. Google now not just develops its products in–house but also has adopted an acquisition and merger strategy. Google has acquired many smaller companies which add value to its product line. Some of the important acquisitions that have gone on to become a SBU of Google are YouTube, Android, Picasa, etc. Google has acquired more than 90 companies till date. This has been Google’s main strategy over the years to diversify its business. It acquires small businesses and then integrates it into its business model are develops it into a SBU. This has proved to be very advantageous as the company has moved from being a search engine giant to a truly a global internet company with its products and services being used by millions around the globe. Structure Google has been a pioneer in the way the company operates. It is truly a 21st century company that succeeded by not following the traditional ways of structuring the organization. Even though the company has a standard structure like any other company with Board of Directors supervising the overall functioning while the executive officers take care of the day to day operations, the organizational structure is not completely dominated by hierarchy. Employees are given the freedom to express their views and it is taken seriously by the top management. Google is divided into numerous small teams working on different projects unlike the traditional companies where the size of the teams are big and have traditional model. The small team means very few members in the team and their coordination is very good. The teams work in unison and are also allowed to innovate. Each team has a team lead reporting to respective manager and they in turn to their managers and VP. Following is Google’s top management team: Board of Directors Larry Page, Google Inc. Eric E. Schmidt, Google Inc. Sergey Brin, Google Inc. L. John Doerr, Kleiner Perkins Caufield & Byers John L. Hennessy, Stanford University Ann Mather Paul S. Otellini, Intel Corporation K. Ram Shriram, Sherpalo Ventures Shirley M. Tilghman, Princeton University(Google, 2011) Executive Officers Larry Page, CEO Eric E. Schmidt, Executive Chairman Sergey Brin, Co-Founder Nikesh Arora, Senior Vice President and Chief Business Officer David C. Drummond, Senior Vice President, Corporate Development and Chief Legal Officer Patrick Pichette, Senior Vice President and Chief Financial Off (Google, 2011) Systems Systems are the processes or the procedures through which things are done in the organization. Also it is the organizations information systems and infrastructure (Holbeche, 2005). Google has been highly successful but also highly secretive about the way it functions. Its infrastructure has been its greatest strategic advantage. Google buys all of its hardware rather than leasing it. It builds its own system. Google owns all of the equipments that it works on. Google works rather informally when compared most of its counterparts. Google offers various perks to its employees and the system is such that the employees get everything that they want in the company premises itself. The employees are given the freedom to work in an unconventional way in the company. The procedures and the processes are always innovated and modified. Staff Google has a diverse workforce. It has employees from various demographics. The innovative and the intellectual capacity are extraordinary. Google dedicates a lot of time, money and effort in order to attract and retain the best human resources. It has ensured that it has a diverse workforces ranging from different fields to communities to nationalities. This brings in a different perspectives and leads to creative and innovative solutions to numerous organizational issues. Style Google as mentioned earlier has adopted an unconventional and unorthodox style. It does not function as a traditional way. Employees work in small groups and are given the freedom to innovate and implement new ideas. Employees are also allowed to work on their own projects 2 hours everyday. During these 2 hours employees are not required to work on their assigned projects but are allowed to work on anything of their choice. That is, Google tries to nurture entrepreneurs within the organizations. There is no hierarchal dominance in the company. Skills The company as a whole has been able to carve itself a niche in the market by coming up with innovative and out of the box products and services. Google since the very beginning has concentrated on adding value to its customers by innovating at every step. The products have been simple and easy to use. It has been capable of coming up with new products continuously targeting both corporate and general users. Shared Value Google has established itself a health image. It has shown corporate responsibility and all its policies have been aimed at not misusing its position of the market leader. It has run into controversy with respect to privacy issues but it has tried to do the right thing and has been transparent with such issues. Its unofficial corporate philosophy or motto of Google is “Don’t be evil”. The company has stuck by this principle. This is visible in the recent conflict between Google and the Chinese government. When Google was asked to monitor the search on its search engine, which was against its policies, it did not agree to do it. This resulted in Google moving out of the Chinese market. It is these values that the company is known for. The Plausible Alternatives and the Recommendations Development of the Google browsers and the creation of more amount of the data analysis structures Coming up with the local policy for the search engines so that the required amount of the data search can be performed Development of the independent database and the collaboration with the various companies for the development of the databases The creation of the several hardware and software platforms for solving the issues with the data integration and the other allied areas Continuing the Research and the Development activities in the various areas such as gaming, three dimensional technology and the other areas of work. The creation of more number of Artificial Intelligence systems that could lead to the creation of more amount of viable information and the data The creation of products that aim at niche demographic segmentation such as the kids, the senior citizens, the other people such as the visually impaired. Go into the scenario analysis of the future issues with the Governmental interference and prepare the various sets of the responses that could be taken to determine them (Laermer &Simmons,2005) Look at the possibility of being more active on the local and the international front in making the government going towards a more active base Keep on advertising and stating that the privacy issues of the various sections of the people are taken care of. It may be explicitly stated by them that the cookie data is removed by them after a definite periods when the browsing gets over. This would go a long way in allaying the fears of the people in the various areas or countries. Google should seriously look at the idea for the creating of the privacy software and the other areas of concern so as to reduce the fear among the people. It should look at the provision of more amounts of scientific data to the people so that the concerns of the people may be taken care of. The online marketing platform should be made more interactive that provides more amounts of online data to the various users. Improve the database management system and should look at the creation of more amount of heuristic programs that help in the search process. Google should target a large number of the growing economies so that the proper amount of the growth can take place. It would also lead to the creation of a large number of potential and realized customers are computer savvy and ready to buy the newly available products from the company. Continue the development of newer applications for the various types of the users. Promise to the users that the data is safe and shall not be shared with any third party. It should also try to enter more aggressively into the field of social networking to conduct more amount of affiliate marketing and managing the products. Evaluation of the Steps and the Control Mechanism to be Followed The evaluation of the long term cost of the sting up of the browsers has to be checked. The commercial viability of the venture has also to be checked in totality. Google provides a lot of the services for free to many of the organizations depending on their size. Therefore, it is even the more important for them to look at the aspect of the costs involved. Google should continuously look at at the aspect of holding a lot of the student contests and the campus offering (Elgin, 2004). It would basically help Google in setting up the requisite platform for the future so that the necessary growth may take place for the company. The lock in value of the user has to be studies by Google. Currently, the market has been swamped by a large number of new applications that have decreased the attention span of the people (Armstrong et al., 2003). They may no longer feel inclined to be loyal to the same products. Therefore, it becomes all the more necessary to take the necessary steps in this regard Google should take the next step and should go for the development of the visually and speech enabled sites. It should also look at the aspect of integrating all the required technologies so that the particular process can be set up. It should look at the development of a rapport with the older customers It should ultimately look at the newer markets and try to develop more number of applications so that it can grow in the future. Conclusion Google shall continue in its proves and the journey as the worlds leading provider of the services. It has evolved over the years at various platforms and re-modified its search platforms. It came in at a time when the other players were dominating the world market. Since then, it has shown continuous development and kept on increasing in size, it has added a lot of new applications in the form of three dimensional tools, newer applications, looking at the tandem search with various indigenous browsers and many other unique options. Google shall continue to improve on its current base of services and look into the aspect of giving the customers more amount of cover on the aspect of the privacy issues. As long as all these parameters are maintained and adhered to, it can be safely stated that the future is Google. It shall only rise in terms of the Market growth. The only possible hindrance may come internally from its own size and the cultural issues. The Government may start to look at these alternatives so that the proper steps can be taken in the nick of time. Google is optimizing its search processes with a lot of tie-ups. Therefore, if all the conditions are properly maintained and monitored, then Google shall continue to rule the market. References Armstrong, G., Harker, M., Kotler, P. & Brennan, R. (2009). Marketing: An Introduction. New Jersey: Prentice Hall. Boone, L.E. & Kurtz, D.L. (1995). Contemporary Marketing Plus. Florida: The Dryden Press. Elgin, B. (2004). “Google:Beyond the Hype.” BusinessWeek. 3 May 2004: 82-90. Ferrell, O.C. & Hartline, M.D. (2008). Marketing Strategy. OH: Thomson South-Western. Google (2011). Management team. [Online]. Available at: http://www.google.com/intl/en/about/corporate/company/execs.html. Accessed on 15th June, 2011. Henry, A. (2008). Understanding Strategic Management. NY: Oxford University Press. Holbeche, L. (2005). Understanding change: theory, implementation and success. MA: Butterworth-Heinemann. Laermer, R. &Simmons, M. (2005). Punk Marketing, New York: Harper Collins. Witcher, B.J. & Chau, V.S. (2010). Strategic Management: Principles and Practice. Hampshire: Cengage Learning EMEA. Read More