Googles Learning Curve in China - Case Study Example

Google’s Steep Learning Curve in China Contents Executive summary 3 Introduction 3 Company Profile of Google 4 Describe Google’s global business strategies 5 Challenges that Google Management were facing in China operations 6 Impact for the organization 7 Conclusion 8 References 9 Executive summary In case of operations from a multinational company’s point of view the company always faces problem s in different countries that it operates. The company which grows in the future depends on their ability to learn from the challenges which the company faces in its international operation in different markets. Google had to face good amount of challenges in its Chinese operations. The challenges forced the company to ultimately close its operations in the specialised search engine for the Chinese market. While this has resulted in good deal of financial losses for the company, the incident has resulted in good deal of learning for the company in its bid to learn how to operate in the countries which have totally different and distinct laws. Introduction Google was founded by Larry page and Sergey Brin in a garage after they dropped out of their PhD program at Stanford. Google has gone on to become the largest company in the domain of software companies and is the largest search engine in the world by market share. Amongst all the searches that are currently made about 3/4th of the searches are made on Google. Google has ventured in other segments too and whichever segments it has ventured into it has remained successful. However, being the market leader in search engine does not mean that the company can sit on its laurels and relax. The technology sector is first evolving and the companies are coming up with new and innovative algorithms and technologically improved products (Bloomberg, 2015). This means that Google has to continuously evolve so that it can maintain its leadership position in the search engine and the technology domain in general. Other problems that the company has to face as a multinational are the risks associated with exchange rate fluctuations, compliance with international laws and regulations. Company Profile of Google Google Inc is a global giant in the technology domain. It designs and offers various products and services. The primary focus of the company is the web based search engine that it operates. The other products of the company includes display advertisements and tools which it names as ad sense, operating system for Desktop and mobile, contents for the consumer, video hosting services in the form of You tube, solutions directed towards enterprises, hardware products such as nexus tablets, Google glasses etc., and commerce (Scott, 2008). The company was founded by Larry Page and Sergey Brin. The company’s executive board is led by Larry page as the cofounder and CEO of the company, Eric Schmidt as its Chairman, Patric Pichette as its CFO, Omid Kordestani as the senior vice president or the chief of business operations, David C Drummond as the senior vice president of corporate development, Craig H Barratt as the senior vice president of the Access and energy, Lorraine Twohill as senior vice president of Global marketing, Salar Kamangar as the senior vice president of products section and Julia Duncan functioning in the role of investor relations. Google’s founder Larry page and Sergey Brin hold about 14% of the company’s stock but have 56% of the shareholders voting power through the ownership of super voting stock (Brandt, 2011). Google’s headquarters are located in Mountain View, California in United States of America. Google was incorporated in the year 2002. The main source of company’s revenue is online advertising. The services are offered by the company in more than 100 different languages in more than 50 different countries. Although the company’s initial business was and is the search engine, the company has diversified into other fields in order to fuel its extension. In the year 2013 Google had employee strength of 47,756 employees. The majority of the employees are software engineer comprising a total of 10000 and are based in more than 40 countries (Jeanneney, 2008). Describe Google’s global business strategies The company’s unofficial slogan from its foundation day has been “don’t be evil”. The company’s defining features which has resulted in its success is its simplicity amongst other things. One thing that Google has done over the years is to keep it simple. The home page of the Google contains very few words and contains only 37 words (Hammonds, 2003). The main concern of the company is customers and always likes to keep customers concerns ahead of the company. The company is concerned about the bytes as the customers have to download because all of them have a modem and they have to download the webpage with their modem and they have to pay for the same. Google’s main operation is search engine and the company always wants that the search should through up a result that satisfies the users query (Reuters. 2015). The company’s engineers are constantly working so that the search throws up more relevant results. Another area which the company’s engineers are working on is to reduce the search time. The combined efforts of the engineers are aimed at showing the relevant results to the user’s queries at the least time possible. Another area for which the company has got so much success is due to the reason that the company has constantly focused on innovation. All the company’s engineer’s work in the company with a singular motto, that is to go on innovating. The company motivates the employees to go on innovating and to be not afraid even if the innovations result in failed products. The company has a dedicated team who looks after just on the fact that how to make the search even better. They periodically scan on what the users search and whether the items they query for are found by them in the top results of the search engines (Hamen, 2011). The company tries to achieve and reach a point where the users exactly get what they want and instantaneously. As the company is multinational additionally to refine its search results the company also has to take into account how the people belong in to different countries enter their search terms and search for the information. Challenges that Google Management were facing in China operations The Chinese operation has been a steep learning experience for Google. Google decided to enter into China in the year 2006 with its site that was especially dedicated for the Chinese audience. One reason for it entering into the Chinese market was to access the huge market potential of china and learn for the experience it has from the market. Google had already access to the Chinese market through its Google.Com. However the company wanted to further penetrate into the Chinese market and especially have an access to the 94 million householders in China through the launch of the dedicated site Google.cn. The founders at that time felt that staying out of China meant that the search results obtained by the Chinese people through the search engine were slow and unreliable mainly due to the complex filtering process that the government of china uses to filter contents and results (Page and Brin, 2005). They felt that if they built a real operation in china they would be able to serve the Chinese customers in a much better way and provide them with a good service. The founders admitter that moving in China with a dedicated site may force them to alter the search results but they liked to still pursue the matter as they hoped to provide better service to the Chinese users. However the Chinese government is notorious for their censorship laws and they censor any content that they judge as threatening to security of the state, causing damage to nation’s glory, causing a disturbance to the social order, and infringing on the social rights of others (Oates, 2004). Dr. Kai fu lee was appointed by the company to head the china operations. Soon after the company started its china operation under Dr. Lee the company decided to launch a new version of the search engine keeping in mind the Chinese governments censorship laws (Sherriff, 2005). The company in their new search engine decided to filter out and not display the results about sensitive issues that were censored by the Chinese government. For example the company made a decision to remove results that promoted Falun Gong, promoted freedom of speech or something about the massacre at Tiananmen Square massacre in 1989. Impact for the organization For its China operation the company was forced to censor the search results that the company displayed for the search results of certain searches that were censored by the Chinese government. For example the company did not display or limited the amount of search results for terms like Falun gong a spiritual movement that was banned by the Chinese government, sites that promoted freedom of Speech in China and mention of the Tiananmen Square massacre. However this move of Google was severely mocked by people back in America who pointed out the company’s slogan of “Don’t be evil” and asked the company of what it was doing in China. The stocks of Google witnessed a severe downfall and there were protests everywhere. Google was not the worst offenders amongst all the companies who had run aground in trying to operate in China. However, when it came to Google the people’s expectations were always very high. They thought that at least Google was different and a cut above the rest of the companies. In its first filing with the SEA it was mentioned as a company that was trust worthy and was interested in the public good (Clive, 2006). However the criticizers argue how the company could maintain that stance with respect to the Chinese government and regime which was so oppressive. Willing to the massive pressure of censorship and certain security breaches the company decided to withdraw from the operations in China in the year 2010. The move was cheered by the human rights activists. While it is true that Google will face immense opportunity cost for not being able to enter the Chinese market it has meant a good learning experience for the company. Conclusion After going through the course of discussion in the above pages it can be concluded that the Google’s operation in China has been a steep learning curve for the company. The company has faced huge financial losses after it had to close down its operations in China. However the learning that it has derived through the operations and its eventual failure will go a lot of way in making the company to understand on how to operate in countries that have totally different laws. The main reason that led to the Google’s failure in China was primarily the fact that Google could not accustom or fit into the complex censorship rules by the Chinese government. Therefore Google in its future such endeavours have to be careful about the strategy it takes in such a scenario. References Bloomberg, 2015. Company Profile for Google Inc. (GOOG). [Online] Available at: < http://www.bloomberg.com/quote/GOOG:US/profile > [Accessed 25 February 2015]. Brandt, R.L., 2011. The Google Guys: Inside the Brilliant Minds of Google Founders Larry Page and Sergey Brin. London: Penguin. Clive, T., 2006. Google’s China Problem (and China’s Google Problem). [Online] Available at: < http://www.nytimes.com/2006/04/23/magazine/23google.html. > [Accessed 25 February 2015]. Hamen, S.E., 2011. Google: The Company and Its Founders. Minnesota: ABDO. Hammonds, K.H. 2003. How google grows...and grows...and grows. [Online] Available at: < http://www.fastcompany.com/46495/how-google-growsand-growsand-grows > [Accessed 25 February 2015]. Jeanneney, J.N., 2008. Google and the Myth of Universal Knowledge: A View from Europe. Chicago: University of Chicago Press. Oates, J., 2004. Chinese Government Censors Online Games. [Online] Available at: < http://www.theregister.co.uk/2004/06/01/china_bans_games > [Accessed 25 February 2015]. Page, L. and Brin S., 2005. Founders’ Letter,” Google Investor Relations. [Online] Available at: < http://investor.google.com/corporate/2005/founders-letter.html > [Accessed 25 February 2015]. Reuters, 2015. Google Inc. [Online] Available at: < http://in.reuters.com/finance/stocks/companyProfile?symbol=GOOG.O > [Accessed 25 February 2015]. Scott, V.A., 2008. Google: Corporations that changed the world. Westport: Greenwood Publishing Group. Sherriff, L., 2005. Google Goes to China. [Online] Available at: < http://www.theregister.co.uk/2005/05/11/google_china.> [Accessed 25 February 2015]. Read More