Google Resists Demand to Hand over Search Records - Case Study Example

Google Case Study Institution Student’s Name Abstract This case study on Google revolves around the in-depth analysis of the search engine’s success in the industry in terms of profitability. A detailed analysis will be conducted to determine how the social and technological forces, legal; successors and failures within the industry are affecting its prospective profitability. Additionally a descriptive PORTER’S five forces of analysis on the company will also be addressed. The case study will be focusing its attention on the company’s business strategies, business strategies employed by its major competitors, its production and marketing strategies, its financial position, its information systems strategies and human resources. Introduction Google was first founded in 1998 by Larry Page and Sergey Brin. The search engine has continued to grow as a technology search corporation providing employment opportunities to almost 30,000 people worldwide. The company has expanded extensively with up to 77 offices in 43 different locations globally. As opposed to when it was founded, Google now has various products and services that include diverse advertising platforms, mobile and web applications in dozens and dozens of languages. In 2014, Google was worth $200 billion allowing it to be recognized as one of the most valuable companies globally. Google’s current competitors in the industry include; MSN, Pay pal Comcast, WPP, Viacom, Yahoo and News Corporation. All the major and minor competitors provide alternative internet search options in different sectors of the industry. According to the Google Inc (2008), the company’s main competitors include Yahoo and Microsoft which are working under their respective brands; MSN and Live search. External Contextual Analysis of Google Inc. Currently, around the United States alone, Google Corporation controls 57% of all the internet searches in the industry (Agence, 2008). With such an acquisition of the market share, Google has an added advantage over its competitors. A huge occupation in the industry places the company in a better position in improving the speed of their search options faster than their competitors. Therefore maintaining customer loyalty since there is a constant improvement on the search engine. Yahoo and Microsoft occupy 23% and 11% of the market share respectively (Agence, 2008). Notably there is an increased competition in the industry since company websites that register the largest amount of searches increase their revenue income through advertising. Business enterprises opt to use advertising platforms that are likely to attract more consumers to buying their products or services. Therefore ads will be placed on popular search engines. Strategic environments Legal Factors Google’s has faced concerns from different legal and political institutions that end up affecting its operations. According to Buncombe (2006), Google has been requested on several occasions by the Department of Justice to surrender some search terms in their archives that might paralyze the Departments efforts. On another occasion the Chinese government, demanded that Google has to censor some search results in their engine (Liedtke, 2005). Google has also faced legal issues arising from the company’s copyright issues. The company overview report, point that this is due to its flexible capacity that allows the corporation to keep tabs of third party web pages and images on their servers (Google Inc., 2010). However, the company responded to their critics by allowing customers to access a copyrights information page. This copyright information page educates customers about digital information and also includes a link that informs the U.S Copyright Office and Google of any immediate activities of violation (Google Inc., 2010). Economic Factors Technology companies in this industry are rarely affected by economic forces in a country. This is because search engines and online advertisements have become crucial for many people worldwide. The digital world and economy, has made impossible for people to stay without being informed and connected. Hence ensuring that such online services remain active regardless of the hard economic times or during a period of recession. Schiffman (2008) affirms that Google “looks particularly well positioned to weather the downturn. Google's focus on highly targeted, measurable advertising makes it more recession-proof than many other businesses in tech.” Social Factors The world has grown as a global village as communication has become vibrant through the internet. People from diverse cultural backgrounds and age groups, continue to rely on the internet to gather and collect information. Additionally, with a wide variety of mobile phones that have internet capabilities, Google has benefitted immensely as people tend to use their phones to locate places, for research and to download music and videos. In increasing its market share the company developed Google Mobile Apps, Android Mobile Phone Platform and Operating System thus allowing their customers to enjoy more Google services (Google inc., 2010). In terms of Demographic, Google seems to be secure since it attracts a reasonable amount of young customers. Unlike other companies in the industry that greatly depend on customers in the ages of 50-60 years, Google does not face any threats from Baby Boomers age. Since internet search fails to be a gender related concern, gender based changes does not affect the industry in any way. However, Google is likely to benefit greatly when and if conventional communities frequently make use of the internet (Google Financial tables, 2008). Technological Factors The 21st century has marked a milestone in terms of innovation. Technology has increasing improved in every aspect of the society. Google has ensured that it stays on track by making sure that it uses computer spare parts with duplicates. These spare parts are used in place of screws by incorporating them in the computer which facilitates fast and efficient swapping and upgrading (Google Inc., 2007). The rapid and popular use of the internet in most communities in the world, Google is deprived of being geographic dependence. Google invests heavily on dispatching research, sales and marketing personnel worldwide who ensure that the company responds to technological changes globally (Google Inc., 2010). Porter’s Five Forces of Analysis Threat of Competition With only three major competitors in the industry Google appears to be doing quite well in the domestic market. Google has continued to grow and become very powerful that even with the recent merger between Yahoo and Bing it still dominates the industry. The industry has made it quite difficult for Google’s main competitors to beat it in acquiring more market shares and dominating the industry. This places the threat of competition on Google to be quite medium. Threats of New Entrants It is quite difficult for startup technology companies to penetrate this industry. This is because to successfully enter the search engine industry a huge amount of capital and resources is required. A company is required to invest heavily in securing and managing the web traffic. Therefore in order to compete favorable on the same levels as Google and Microsoft, one needs to acquire an Operating System, a unique web browser and distinct software and hardware (Siegel, 2005). Apple seems to be the only company showing any possibilities of entering the market in the near future. With its recent success in the computer and mobile industries there are high chances that Apple can easily convince consumers to use any search engines it might come up with. On the other hand Facebook has shown potential signs of making it in the internet search. The social platform provided by Facebook, carries with it promising supporters and advertisers, other than this factor penetrating the search engine industry is still not part of Facebook’s agenda. Thus the threat of new entrants is quite low. Threat of Substitutes According to the Google Corporation, competition for them “is one click away.” Therefore, recognizing that there are other substitutes in the industry which are readily available for customers. However Google has managed to secure its market share in the industry since it provides its users with the ability to access videos, pictures and maps. Other companies with similar capabilities have failed in giving consumers quality services and products thus pushing them to use what they are familiar with, Google (Google Inc., 2010). Power of Suppliers The industry of search engines, lack a specific price setting since advertising costs are calculated using a real-time auction format. This is because service providers lack a distinct way of differentiating between customers as any form of advertising calls for a bidding formula. Competitors such as Yahoo, Bing, and Google, tend to provide users with different types of search options. Therefore one search engine can allow the user to bid for different types of placements while another may work against this placement. Thus the power of the supplier is placed on the user, who has limited power since the population of users worldwide is rather overwhelming (Google, Financial tables, 2008). Power of Buyers Companies and business enterprises have found it quite difficult not to advertise with search engines in the industry. Therefore for these companies to reach their potential customers, it is mandatory for them to advertise with big established search engines such as Google. Advertisers are rendered powerless in this industry since the revenue acquired from advertising is very secure (Rimm-Kaufman, 2007). Key Success Factors for Google Appropriately address the legal and political concerns directed towards Google. Google needs to respond to legal and political allegations facing them concerning the privacy of users and the search results as these concerns will affect their performance in the industry in the near future. Google should localize its search engine. Google has been termed as a “foreign” search engine in some international countries making it not user friendly. For instance other search engines such as Yahoo HK in Hong Kong and Baidu in Mainland China, users can be able to obtain more “local” search results as opposed to Google. Google fails to conform and instead of using pop-ups, it will automatically redirect a user to a new website. Its competitors such as Yahoo, beats Google on this aspects as it is more user friendly and convenient. Change the Nature of PageRank System. The indispensable nature of the PageRank system tends to place some websites in a more advantaged position than others. For instance web pages such as CNN.com are more advantaged since they are privileged with higher voting powers than others. This raises questions among consumers as to whether the “more important websites” and the search results are linked in a particular way to mean that some results are more relevant than others. Secure the PageRank System to avoid violation by some companies in order to make profits. It is noted that a number of companies abuse this system by increasing the ratings on their advertisement pages in order to increase revenue income. Moreover some companies have even come up with cunning tactics in which they use the system to assist other companies to climb in a much higher position in the Google search result. With such companies on Google, there is interference on the Google search engine as results are mixed up with ads and web pages of profit-making companies. These activities continue to violate Google’s motto of “Don’t be Evil” affecting the importance of search results. Driving Forces of Change The data challenge With almost 15 billion connected devices, this means that data creation will continue to grow into bigger and larger dimensions. Google will be required to conform to these demands and increase its diversification other than that of phones and computers. Thus Google will be forced in the near future to come up with applications and data that can be used in vehicles, healthcare facilities, apparels and appliances. On the other hand there is need for the corporation to identify the direction to follow when the need to shift arises (Attributor Corporation, 2008). This challenge might give rise to new entrants in the industry thus posing as threats to Google. On the other hand Google might be forced to reevaluate the strategies used in coming up with products and services for their users in the next 3-5years. Consequently the company may also have to do away with cheap duplicate components as their resources and adapt to using up to date and expensive materials for them to match up to the challenge. Internal Analysis for Google Google’s mission statement is, “Google’s mission is to organize the world’s information and make it universally accessible and useful.” The company’s mission has led it in focusing its efforts towards working hard and establishing a unique and reliable resource that allows anyone doing research work to use the engine. The mission is outlined in an open ended manner without stating a given timeline or the means by which Google will achieve its objectives. The mission has succeeded in only stating the end result. The definite goal as stated by Google gives the company an allowance to develop and come up with physical products without restricting it to only online developments. The mission statement clearly defines the company’s vision for the future. Its mission defines a distinctive and original project that is huge and long term. Therefore the mission is rather complete since its objective not only focuses on organizing information but also on making it accessible and relevant to users. Through their mission statement, Google holds a human-centric stand as it is dedicated in providing an exceptional user experience (Guynn, 2008). Analysis of Google’s Culture and Leadership The founder’s of Google, Larry Page and Sergey Brin, have greatly influenced the structural organization of the company. In its leadership Google solely focuses on the academic and business success of an individual. For instance in 2001, the corporation hired Eric Schimidt a renowned academic, with several degrees in engineering, served as a CTO of Sun Microsystems and was previously CEO of Novell (Google Inc., 2007). Page, Brin, and Schimidt control the company as a team. They share most responsibility as they believe that the “Shared judgments and extra energy available from all three of us has significantly benefited Google” (Google Inc., 2007). Top level management team at Google is required to maintain first person communications with investors when necessary. This is because; the corporation’s, annual reports, videos and other SEC filings are normally very sensitive and personal. According to a report 'Meet Google’s Culture Czar' by Mills, (2007), Google has maintained its focus on employing managers in rather distinctive positions that other companies in the industry may have failed to note. For instance, in 2006, Stacy Savides Sullivan was employed by Google as the Chief Culture Officer of the company. Her main role was to ensure that the company’s startup atmosphere is maintained. Google has over the past few years maintained strict functional management systems which are characterized by a number of value chain activities. As an international corporation, the positions held at Google are subdivided into groups that suit the interests a region occupied by Google. Employee Perks The company’s main objective when it comes to its employee, is to provide a conducive working environment for them (Google Inc, 'Historical prices', 2008). The company is known for providing world class comfort for its workers as they perform their duties. In 2007 and 2008 Fortune magazine recognized Google Corporation as one of the best companies one can work for in the world (Fortune, 2008). Eric Schmidt, CEO of Google clearly states that, “The goal is to strip away everything that gets in our employees’ way.” The 70/20/10 Rule This rule applies to all Google employees. The rule is put in place to allow employees spend 70% of their time on work, 20% on work related projects and the other 10% on unrelated new businesses. The rule is very important for the company that there are employees put in place to manage it. The CEO further asserts that “70% is spent on search and advertising, 20% on similar businesses like Google earth and Google news and the 10% on upcoming new projects such as free wireless initiatives” (Google Inc, 2010). The vice President of Search Products & User Experience, Marissa Mayer, the 20% rule has seen the company bring in a huge revenue income since Google’s new products are normally created during this time (Google Inc, 2010). Analysis of Google Current Structure Currently Google dominates the industry with over 57% acquisition of the market shares. The company stands at a comfortable position with its competitors lagging behind with a net worth of $ 200 billion. Globally the company continues to be recognized as one of the most efficient and quick search engines to be used by nearly 85% of the population. Google’s business strategy is built on a strong foundation that allows it to increase brand awareness among customers (Joaquin, 2007). The company has also developed new products such as; docs and spreadsheets productivity suite, Picasa an image editing program which has seen the company grow as a brand in all possible dimensions. The foremost leading competitors of Google are the technology giants, Yahoo and Microsoft which tend to threaten Google’s brands. However these companies are all driven by one strategy which is to ensure that they have garnered as much revenue as possible from their respective internet search engines. These competitors work in engaging their users for as long as they can by categorically offering different services on their websites. Google has worked in foreseeing the success of its mission statement by expanding both nationally and globally. The company has become a thriving success by providing an accessible search service in numerous and international languages in different countries. Google Corporation has equipped its employees with elaborate organizational skills which have ensured that the company runs on the same relevant data programs in its search engine. This is as a result of the use of advertisement mechanisms in making money for the company. Google has failed to confine itself to the search product offered to their users and expanded into distinct applications that allows users to browse for information related to shopping, music and books. The search engine has established its place in the market by continuously being consistent in delivering relevant results at a very high speed. These competitive advantages have set it apart from its competitors. Conclusion Google’s diverse operations and service delivery enables it to maintain a prestige position in the market with its brand image. The company is set to thrive in the market but will have to come up with new and innovative ideas that will support its advertising business. Some of its success is attributed to Google’s strategic management which has supported Google in launching products and services according to the demands of users. Moreover the degree to which the company succeeds is highly dependent on how it adopts to future technologies by using its experiences in the industry as leverage while committing to its mission statement. References Agence, F. (2008). Revamped Ask.com Searching for more Market Share. AFP. [Online]. Available from: http://afp.google.com/article/ALeqM5gtAUzEAjFnHgtcJn_aJKtI3msHbg [Accessed 15th January 2015] Attributor Corporation. (2008). Get your fair share of the ad network pie. [Online]: http://www.attributor.com/blog/get-your-fair-share-of-the- ad-network-pie [Accessed 15th January 2015] Buncombe, A. (2006 15th March). Google Resists Demand to Hand over Search Records. The Independent. 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