The Strategy Implemented by Google - Research Paper Example

? Google Table of Contents Table of Contents 2 Executive Summary 3 Introduction 4 Company Background 4 Competitive Environment 5 Competitive advantage of Google 6 Porter’s Three Generic strategies 9 The strategy implemented by Google 9 Value Chain Analysis 10 Conclusion 12 Reference List 15 Appendices 17 SWOT Analysis 17 Pestel Analysis 18 Porter’s Five Forces Analysis 18 Executive Summary The study would reflect the past as well as the present situation of Google. It would deal with the background of the company. It would also reflect how the organization has successfully achieved competitive advantage in global perspective. It would be highlighting the strewgic option selected by Google in the Porter’s three generic strategies. It would represent hoe differentiation has helped in the achievement of success and attainment of customer loyalty worldwide. The study would also reflect the value chain analysis of the organization where it would be mentioning the primary activities and the secondary activities performed. The value chain analysis is an important part while planning for the business strategies as it helps in determination of the activities that are taking place in the business operations. Google does not provide only physical products to its customers. Thus the value chain analysis of the corporation is slightly different. The study would be concluding with discussions of the entire study. The SWOT Analysis, PESTEL Analysis and Porter’s five forces analysis would be mentioned in the appendices. Introduction Today, Google is the most renowned web search engine server. It searches higher than 22 billion pages and makes use of a unique algorithm which helps in receiving the targeted result of the searched queries. It offers a large number of useful features, high technology based databases, various shortcuts and other services. Googling is to know the way in which Google thinks and search accordingly. It helps in searching in such manner which would work best for the user’s needs. Thus, it includes recognizing the procedure of exploiting Google’s strengths. It also includes knowing the procedure of accessing or using special databases and other features of Google. It is basically one spider program which helps in finding pages on public web followed by building databases from those web pages. Wordnet describes the spider as the computer program which prowls the internet in search of publicly accessible resources which could be added to the database. The similar search box in the home page of Google helps the users by providing them different ways of searching database by means of terms or symbols that would act as the search limiters. The unique page rank system of Google helps in deciding that how the results would be organized for the purpose of display. Company Background Google Inc., is one of the American multinational corporation which is specialized in internet related products and services. It includes searching, cloud computing, different types of online advertising technologies and other software related programs. The organization derives its maximum profits from the AdWords (Google, 2013a). The company was established in the year 1998. It was followed by an initial public offering on 19th August 2004. The mission statement includes organizing the information all over the world and making it easily accessible and meaningful. The unofficial slogan of the organization is ‘Don’t be evil’ (Google, 2013b). After the establishment, Google has seen a rapid growth in terms of partnership, acquisition and chain of the product offerings. The online productivity software of the organization includes one official suite (Google Drive), email (Gmail) and the social networking website (i.e. Google+). The desktop products include various applications for editing or organizing photos, web browsing and various other features such as instant messaging. The organization leads in the development of the ‘Android Cellular Operating System’ and ‘Chrome OS’ for the net book called Chrome Book. Presently, it has tend towards communication hardware by making partnership with the major electronic manufacturing companies who produce high ended Nexus device and also attained ‘Motorola Mobility’ in the year 2012. The company runs approximately higher than 1 million servers across the world and processes more than 1 billion of search requests. In December 2012, google.com was listed as the maximum visited website by Alexa. Google was started as a research project in January 1996 by two Phd students of Stanford University named Sergey Brin and Larry Page. The search engine was named by them as ‘BackRub’ as the system used to check the back links for understanding the significance of a particular website. Later on the name was changed to Google. The name actually initiated from the misspelling of ‘Googol’. Competitive Environment Google faces tough competition in almost every aspect of the business. It mainly faces competition from The traditional search engines like Microsoft Corporation Bing and Yahoo Bing. Various ‘e-commerce websites’ and Vertical Search Engines like Monster.com (for job related queries), Kayak (for travel related queries), WebMD (for health related queries etc. These players attract the users towards their own websites by providing them with various services or product information and many users search for their information directly in these sites rather than going through Google. The social networking sites like Yelp, Twitter or Facebook. Nowadays users rely more on the social networking sites for service or product referrals than using the traditional search engines for gaining information. Different forms of advertising. Radio, television, magazines, newspapers etc, also provide with valuable information. This, it can be seen that Google faces tough competition from its competitors. However, it holds its position as the leading search engine in the entire search market. In order to achieve and maintain competitive advantage, the organization developed an infrastructure that would provide an efficient and quick search engine. Competitive advantage of Google Google Inc., is such an internet company which has the record of generating an advertising revenue of $ 22.9 billion in the year 2009. It is one of the undisputable leaders in the field of Internet search (BubbleNews, 2013). As already mentioned above, the mission of the company is organizing the information all over the world in order to make it highly accessible, meaningful and useful. The organization generated an annual profit of $ 10.74 billion in the year 2012. The company was established with the focus on the invention and implementation of one successful search technology. In today’s date, it has expanded its portfolio of products as well as services to a great extent. The organization operates in highly competitive environment. The wide range of product and service offerings helps in the maintenance of differentiation. However, Google faces tough competition from large number of companies originating from various industries. The competitive advantage of the organization is evident in a number of ways, more specifically in the excellent infrastructure. Despite of the secrecy of the organization, Royal Kingdom has reported that it owned almost 36 ‘data centres’ (as reported in 2008) and has a pan of expanding in other geographical areas like Malaysia, Taiwan and various parts of United States. The company serves more than 900000 serves by means of the data centres and the figure is expected to increase to 10 million servers in the future. In its early stage, the search engine of the company was acclaimed of being listed in one among the topmost 100 websites as well as search engines of 1998 by PC Magazine. In between 1998 last and the starting of 1999, the total number of questions that were searched in Google raised from 10000 to 500000 in a regular manner. This resulted in the refinement of the search engine with additional or new features. In the year 2010 there were almost 516 upgrading done to the search engine by means of inclusion of Instant Search and various other features which would help in offering dynamic results. The constant attempt of the organization towards expansion of the portfolio of products or services also represents its competitive advantage in the market. From the time of its establishment, the organization has acquired greater than 100 companies in order to expand the service offerings. This is reflected more specifically by the acquisition of You Tube (the most renowned video sharing website) in the year 2006 followed by the acquisition of ‘Motorola Mobility’ in the year 2011. On the basis of Resource Based Value, a company possesses the ability of achieving competitive advantage only when the resources satisfy the criteria of being rare, valuable, non replaceable and inappropriately imitable. The resource based value of Google is given as: Valuable resource- The organization is very renowned because of the search engine. It is accounted as one of the most valuable resources of the organization stimulating the advertisements and accounting for 96 percent of the 37.9 billion revenue of the organization. Employees are another valuable resource of the organization. The creative and lively organizational culture is also very significant in this highly efficient operation within the business which in turn results in the development of a large number of innovative services or tools. Rare Resources- Google is having a large portfolio of technology where the total number of patents has incremented after the acquirement of Motorola Mobility in the year 2013. It has been reported that the acquisition provided the organization with additional 24000 patents. In-imitable- The infrastructure of the organization cannot be imitated easily. Although the organization does not disclose information about its infrastructure but it can be estimated that it owns large number of ‘data centres’ serving lot of servers all across the world. It is also very tough to copy Google’s success because it was founded during 1990’s when the market was unsaturated and less competitive. Sustainability- With the transparent and advanced user interface, the Google Search provides an unparallel procedure of seeking information easily and which is very difficult to be replaced or substituted. Thus the resource based value analysis of the organization has helped in understanding that Google has achieved its competitive advantage by means of the valuable resources that it possesses. As already mentioned above, these resources are non-substitutable and in-imitable. Porter’s Three Generic strategies It is obvious that Google has its own strategic option which helps it in achieving competitive advantage over the competitors and also decreases the threat from the entry of various new competitors. The strategy implemented by Google These three generic strategies that have been suggested by Michael Porter would help in understanding the strategies that have been chosen and implemented in order to attain competitive advantage in market (Eldring, 2009). The three generic strategies include 1) cost leadership strategy; 2) Differentiation strategy; 3) Focus strategy (Porter, 1980; 1985; 1991; 2008). The business level strategy of ‘Google Search Engine’ Presently, Google implements the differentiation strategy by providing various unique products or services to a large range of customers (FitzGerald and Arnott, 2000; Grant, 2010; Griffin, 2010). One of the most renowned services offered by Google is the web search engine as it provides the users with the best reliable way of searching. The product which supports the differentiation strategy of the organization is the internet-search-driven advertisements provided by Google. Google AdWords is specialized for the advertisers so that they can reach to the qualified audiences in the most efficient manner. The ease of developing ad text and managing the online advertising accounts with reduced upfront payment needed differentiates the product of the organization from all its competitors. The rapid growth in the partners and number of acquisitions performed by the company also differentiates it from the competitors. The advertisers can target various customers originating from different geographic location with the help of Google. One of the biggest advantages in the differentiation strategy of the organization is that it helps in the development as well as the strengthening of the customer loyalty (Needle, 2010). The web search engine presently holds almost 66 percent of the international internet searches. The customers use this search engine because of the simplified technology and the reliable results. In the year 2010, the organization announced the completion of one new network indexing system known as Caffeine. It gives 50 percent more advanced results for the web searches as compared to the previous indexes. This has made the search engine of the company even more competitive in the market. Moreover, Google has also launched the ‘Google Instant’ that reduces the total time required for searching and gives highly dynamic results. The option previously chosen for instant search was ‘Bing’. However, in the present scenario instant search by means of ‘Google Instant’ takes reduced time as compared to Bing. The creation of Google Instant also had an impact on the prices of AdWords and other paid search campaigns that were higher than the price offerings of the competitors previously. The present pricing range of Google Search Engine is said to be moderate as compared to its competitors that provides additional competitive advantage to the competitors. Value Chain Analysis The value chain analysis provide a set of activities that are taking place in the business operation and it finally relates these activities with the competitive strength analysis of the business (Recklies, 2001). It helps in executing out the maximum possible value for the customers. The primary activities of Google differ slightly from the traditional model. In the business model of Google, the raw material is processed into finished products for selling to the customers. This helps the organization in gaining value in every step of the procedure (University of Washington, 2011). As the company does not offer any physical product, the value chain is highly differentiated. The company collects as many web users (i.e. raw materials) it can and then converts them into the stellar search products so that the results can be delivered promptly (ACDI VOCA, 2013). By means of these assorted signs, Google directs the web users in type of traffic to the advertising partners who then transform this traffic into the ‘conversions’ (i.e. the finished products). The company adds value by directing the quantity of the web users to the desired sites (Handfield, 2011; Supply Chain Innovation, 2011). It can also sort out the pre qualified individuals visiting the websites utilizing the keyword association which helps in searching history for recognizing the user’s interests. It is how Google keeps ensuring that those users who are being directed to the websites of the partners are probable to buy products there. The primary activities within the value chain are highly dependent upon the supporting activities of human resources and administration (Sridharan, Caines and Patterson, 2005; Dittmann, 2010). The company always hires highly competent and qualified employees in order to ensure that the organization reaches to excellence in the development or research of technology (Pietrobelli, 2011). The company plans for various aptitude tests and challenges in order to help the recruiters. After the employees, a large portion of the cost structure depends upon the systems and the infrastructure. The internal software and Google’s server help in conducting operations, sales, distribution and various other services. Each and every activity has some contribution to the value chain thereby incrementing the profitability of the organization. Google is located all over the world where it localizes marketing, distribution and various other services in order to ensure profit globally. The profit is maximized by the social competence and the cultural awareness of the organization in order to tailor the products according to the needs of the users. By shifting the activities geographically, the organization would take the advantage of maintaining diversity from the human resource perspective. It would also be able to take the advantage of low salaries in various countries excepting United States. The company outsources its copy writing to different organizations in India. It uses advanced analytics for measuring the efficiency of its supply chain. The data related to the history of Users is very important in order to improve the advertising interface and search algorithm of Google. ‘Word of mouth’ promotion and utilization of latest technologies help the local users in bringing in new customers and thereby increasing the profit margin automatically. Conclusion Google has been one of the most renowned web search engine servers till date. It searches higher than 22 billion pages and makes use of a unique algorithm which helps in receiving the targeted result of the searched queries. It provides the users with large number of high technology and useful feature based databases along with different shortcuts or other services. As already mentioned above, it is one such internet company that has made record of generating the advertising revenue of $ 22.9 billion in 2009. The organization has always remained one of the undisputable leaders in terms of Internet searching. The organization has set its mission to organize information all over the world for making it easily accessible, meaningful or useful. In the year 2012, it has generated annual profit of $ 10.74 billion. While the company was established, higher focus was given on finding and implementing a successful search technology. In 2010, almost 516 upgrading were done to this search engine by including Instant Search or other features that added in offering dynamic results. Google holds the leading position due to the development of ‘Chrome OS’ and ‘Android Cellular Operating System’. Presently, the company is diversifying by tending towards communication hardware. In the recent years, it has made partnership with major electronic manufacturing companies who manufacture high ended Nexus devices. The company also acquired ‘Motorola Mobility’ in 2012 which strengthened its position in the market. In porter’s three generic strategies, Google implements the strategy of differentiation by means of unique services and products to a large number of customers. One of the remarkable services offered by the organization is web search engine because it provides all the users with most reliable ways of searching. The product that actively supports the strategy of differentiation adopted by the organization is ‘internet search driven advertisements; that are provided by Google. Google Adwords is another feature that helps the advertisers in reaching to the audiences in an efficient manner. One of the advantages of the differentiation strategy adopted by the organization is that it helps in the establishment as well as strengthening of the customer loyalty. Google holds almost 66 percent of global internet searches. The primary activities performed by Google have slight difference from the traditional model. In the business model of Google, raw material is processed into finished products for being sold to the customers. In every step, the organization gains high value. As already mentioned above, the company does not provide only physical products. It is due to this reason that its value chain is highly differentiated. Here, the web users are the raw materials which are converted into stellar search products for delivering the results in prompt manner. The primary activities of the organization are highly dependent on the supporting activities of the administration and the human resources. Recruitment of competent and highly qualified employees take place for ensuring the fact that the organization reaches to the excellence in research as well as development of technology. It should keep on conducting research and development programs in order to facilitate the users with the latest technologies and prompt results. It should maintain the differentiation in its products and service products so that it achieves competitive advantage in the market and holds a strong position in it throughout its business operations. Reference List ACDI VOCA, 2013. Value chains and value chain analysis. [online] Available at: [Accessed 13 November 2013]. BubbleNews, 2013. Sustained competitive advantage of google inc. [online] Available at: < http://www.bubblews.com/news/1217684-sustained-competitive-advantage-of-google-inc> [Accessed 13 November 2013]. Dittmann, J. P., 2010. Developing a supply chain strategy. Available at: [Accessed 13 November 2013]. Eldring, J., 2009. Porter ?s (1980) Generic Strategies, Performance and Risk: An Empirical Investigation with German Data. Hamburg: Diplomica Verlag. FitzGerald, M. and Arnott, D., 2000. Marketing communications classics: An international collection of classic and contemporary papers. Stamford, Connecticut: Cengage Learning. Google, 2013a. Google's income statement information. [online] Available at: [Accessed 13 November 2013]. Google, 2013b. Google’s mission is to organize the world’s information and make it universally accessible and useful. [online] Available at: [Accessed 13 November 2013]. Grant, R. M., 2010. Contemporary strategy analysis and cases: Text and cases. Hoboken, New Jersey: John Wiley & Sons. Griffin, R. W., 2010. Management. Stamford, Connecticut: Cengage Learning. Handfield, R., 2011. What is supply chain management? Available at: [Accessed 13 November 2013]. Needle, D., 2010. Business in context: An introduction to business and its environment. Stamford: Cengage Learning EMEA. Pietrobelli, C., 2011. Power relationships along the value chain: multinational firms, global buyers, and local suppliers’ performance. [online] Available at: Read More