Case Google Inc.doc

8/10/2019 Case Google Inc.doc

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Google Inc.

Case Instructions:

In the real world, all relevant case facts and information will not be handed to you. Analysis of

this case requires the collection of data and information from public sources. In doing research,

you will cultivate your skill in making sense out of a tremendous amount of informationor lack

of itand determining what is relevant data that ought to guide your strategic analysis. Theultimate test of your skill as a strategic analyst is whether you have the tools and judgment to

make sense of the information available and to make strategic decisions in the face of a great

deal of uncertainty.

o, go to www.google.comand browse through to relevant pages. Analy!e "oogle#s current

situationthe state of company today. $hat can you discern about "oogle#s strategy% &earn

internal and e'ternal environments of "oogle, its competitive position, its prospects for the

future, etc.

Tasks:

(. )ind out if "oogle performs a formal strategic management process% If yes, how you thinkit helps*helped "oogle grow and establish its direction%

Strategic Planning Processes - Google

Step1. Evaluation of the organizations current mission and purpose

Mission: Organize the world's information and make it universally accessible and useful.

Purpose: Allow users to be able to find information in many different languages; check stock quotes, maps, and

news headlines; lookup phonebook listings for every city in the United States; search billions of images and

peruse the world's largest archive of Usenet messages. In addition, support thousands of advertisers to use

Googles AdWords program to promote their products and services on the web with targeted advertising.

Vision:

Short-term objectives: are to expand the workforce for anticipated growth, expand further into international

markets, and continue developing new products.

Long-term objective: delivering new advertising technology. Expanding the workforce will help achieve the long-

term goals. Google's organization structure is primarily functional but also includes a few geographical

organizations.

Philosophy:

Google does not document a Vision or Values on the Google website. They do state a philosophy on the Google

website, some are listed below:

Focus on the user and all else will follow

It's best to do one thing really, really well.

Fast is better than slow
http://www.google.com/http://www.google.com/


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You don't need to be at your desk to need an answer.

No pop-ups

Step 2. Assessment of the External Environment

This section identifies the threats and opportunities the company faces.

Threats:

Remote (Remote concerns for Google are new laws and regulations, increasing intellectual property claims, and

access to more information.) (Weak position in China- strict govt regulations and cultural differences)

Industry (Industry concerns for Google are competitive threats from Yahoo and Microsoft and new unknown

competitors that may be international. Agreements with advertisers could potentially become competitive as well,

as a result, reducing operating margin)

Operating (Operating issues are the current ad base, design of the ads, and shrinking advertising budgets of

customers. The quality of service provided by the Google organization and retaining qualified help is also an

operating issue.)

Opportunities:

Unmapped countries expanding services (potential for unknown regions)

New advertisement format and tracking mechanisms (new innovation of technology)

Size of current customer base and market share is small (potential growth and new advertising agreements)

Step 3. Assessment of the Internal Environment.

This section of the strategic environment is a realistic analysis of Google's internal resources.

Strengths:

Search engine differentiation (Googles strategic are innovation and concentric diversification)

Employee focus (Google has a unique culture and policies to promote innovation. The company strives to employ

the most qualified applicants and reward the greatest contributors, in order to promote good performance and

facilitate hiring and retention)

Strong brand name (well-known by all users as the best search engine)

The advertisers' return on investment from advertising campaigns on our web sites outweighs other forms of

advertisements like radio, television or new papers.

Weaknesses:

Strategic controls can be largely affected by environmental factors (negative consequences of a significant power

outage). Google systems are vulnerable to any electrical service disruptions resulting in service being impacted.

New technologies that do not compliment Google's current operating systems

Nearly all revenue is from advertising source


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Finding new key employees and infrastructure could be challenging

Step 4. Re-evaluation of the organizations mission and goals/objectives.

Based on the SWOT analysis of internal and external factors, the next 10 years will define the longevity and

sustainability of Google as a company. Quick and dramatic changes characterize the technological environment.

To keep up with the market Google plans to focus on

Enabling users to search a larger base of information

Developing tracking mechanisms and new advertising technology

Creating patents and intellectual property - will hold the keys to gaining competitive advantages in the market

Retaining and recruiting the best human resources (a critical factor for Google in order to reach the changing

needs of consumers and advertising clients.)

Step 5&6. Formulation, Development and Implementation of strategic plans.

Strategic Planning

In order to compete with other media titans such as Microsoft and Yahoo!, Google has sought to employ the

power of differentiation to create a competitive advantage. (understands exactly what you mean and gives you

back exactly what you want)

Applying concentric diversification focus on the core product of search services the company has also been able

to benefit from a competitive advantage in "faster response times, greater scalability and lower costs" Hence, not

only does Google have a high advantage in the differentiation arena, but a cost and speed advantage as well.

Google offers generous stock options and provide relaxed working atmosphere to retain the best talent and align

employee interests with shareholder interests. (Google provides free lunches every day for employees and

encourages participation in the weekly roller hockey games. The company regularly sponsors employee outings

such as picnics and skiing trips)

Monitoring strategic projects must involve contingency planning in the event that Google's present product

offerings become obsolete with the invention of new Internet devices and in case of a competitive threat. (This can

be done by continuous monitoring of competition and expanding current product offerings. Gathering of data

detailing consumer needs and search preferences will ensure that Google continues to be an industry leader

among search engines.)

http+**www.(-helpme.com*strategicplanningprocessgoogleview.asp%id/(01212

Company Background

Name Google Inc.
http://www.123helpme.com/strategic-planning-process-google-view.asp?id=167474http://www.123helpme.com/strategic-planning-process-google-view.asp?id=167474


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Logo

Industries served Internet

Geographic areas served Worldwide

Headquarters U.S.

Current CEO Eric Schmidt

Revenue $ 50.17 billion (2012)

Profit $ 10.7 billion (2012)

Employees 53,861 (2012)

Main CompetitorsApple Inc., Facebook Inc., Microsoft Corporation, Samsung Electronics Co.,

Ltd., International Business Machines Corporation and many others.

Google Inc. is a multinational corporation that provides Internet-related products and services, including internet search, cloud computing, software and advertising

technologies. Advertising revenues from Ad Words generate almost all of the company's profits.

You can find more information about the business in itsofficial websiteorWikipedias article.

SWOT

Google SWOT analysis 2013

Strengths Weaknesses

Open source products and services

Quality and customer experience are

the primary objects

Financial situation

Access to the widest group of internet

users worldwide

Strong patents portfolio

Relies on one source of income

Unprofitable products

Patent litigations
http://www.google.com/about/http://www.google.com/about/http://www.google.com/about/http://en.wikipedia.org/wiki/Googlehttp://en.wikipedia.org/wiki/Googlehttp://en.wikipedia.org/wiki/Googlehttp://www.google.com/about/http://en.wikipedia.org/wiki/Google


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Product integration

Culture of innovation

Opportunities Threats

Growing number of mobile internet

users

Obtaining patents through acquisitions

Driverless electronic cars

Growing into electronics industry

Google fiber cables

Growing number of mobile internet users

Unprofitable products

EU antitrust laws

Competition from Microsoft

Strengths. Open source products and services.As the company states: Googles mission is to organize the worlds information and make it universally accessible and

useful. The same is with almost any of Google products. Let it be Google maps, calendars, drive, OS or the advices how to rank better in a search index. Googles products

can also be used with any OS or mobile device without a charge. Google openness is the key why Google is the number one in many products and services.

. Quality and customer experience are the primary objects.Everything that Google offers is of premium quality. The products are aimed at solving customer

needs and problems by providing excellent customer experience.

. Financial situation.Google is one of the most profitable companies in the world with earnings nearly $50 billion and $11 billion profits (22%). The company alsoholds $48 billion in cash and just $7 billion of debt. Few other companies are so strong financially to compete with Google.

. Access to the largest group of internet users worldwide.Google has an access to 79% of the world desktop search market users and 89% of the world mobile

search market users. Combined, these internet users represent an extremely large market that Google can use to promote and sell its products and services.

. Strong patents portfolio.In 2012, Google added 1,151 patents and was the 21st business worldwide in terms of number of patents. Intellectual property is the

key in competing against competitors and Google with Motorolas acquisition gained a strong advantage over its competitors.

. Product integration.Nearly all Google products are integrated with each other forming an ecosystem that enriches customers experience and encourages using

more of companys products and services. Besides, Google products can be used on any OS or any device without a trouble or can be integrated with other companies

applications. No other major tech organization offers the same level of integration.

. Culture of innovation.Many unique products are offered by Google every year, with so many in development stages. According to Boston Consulting Group

(BCG) Google is the 2nd most innovative business in the world. The company was also the second patent creator in the worle in 2012. Google emphasizes its innovative work

culture as one of its main competitive advantages.

Weaknesses. Relies on one source of income.More than 90% of Googles revenue comes from online advertising. Online advertising is expected to grow in double digits in

2013 and will grow Googles income in the short term. But in the long run, Google may experience slow income growth or even the decline due to a few reasons. First, the

market for personal computers is growing slowly and the Google experiences the overall decline in its desktop search engine market. If Google wont push the competition

back it will lose not only the market share but the main source of its income as well. Second, Google as many other firms, find it hard to monetize mobile device users, who wil

represent the highest growing group in online advertising. Third, online advertising growth is driven by emerging economies where an average price for an advertisement is

considerably lower than in the developed economies, so the growth of online advertising will only grow the income of companies insignificantly.

. Unprofitable products.Google has many products and services that add little value for the business and make only losses, thus decreasing firms profits.

. Patent litigations.Google is often involved in litigations over the breached patents and other intellectual property. These litigations are costly and time consuming

and distract the company from innovating rather than litigating.

Opportunities. Growing number of mobile internet users.Google has an opportunity to create a platform that could be used to better display ads for mobile device users and

increase firms income.

. Obtaining patents through acquisitions.For Google to grow and to compete successfully, it has to obtain more new patents. One way of doing that is to acquire

companies that have strong patents portfolio. Google has acquired Motorola in 2012, obtaining more than 17,000 patents from the business.

. Driverless electronic cars.Google has introduced and successfully tested driverless cars in Nevada, U.S. The technology of these cars could easily be installed

in any future model and would be a huge technological step. Although, Google has no intentions of manufacturing such cars itself, the company could sell licenses for car

manufactures for using their technology and IP.

. Growing into electronics industry.Google has already launched a few new models of notebooks, tablets and smartphones into the market but these were only

introduction models. Google could strengthen its entry into electronic devices industry by introducing more products for more customer groups and cut out its market share.

This would result in tighter integration of its software products and diversified income.


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. Google fiber cables.Google is currently testing their new fiber cables that can deliver internet content at astonishing 100 times as fast as current providers. It is

wise for Google to invest in such infrastructure that virtually would have no competition and would integrate the company vertically.

Threats. Growing number of mobile internet users.Google finds it hard to monetize mobile internet users as there is less space to place ads on a mobile device and the

ads costs less than usual. The growing number of mobile users means fewer searches made on the personal computers and lower income growth or even decline for Google.

. Unprofitable products.Google has introduced many products and services but few of them earn profits for the business. Most of the services are the burden for

Google and only makes losses. If Google continues to introduce new products that add little value and only make losses, the companys profits will fall.

. EU antitrust laws.Google is currently accused by EU of using its dominating position in internet search engine market to display its own services higher than

competitors in search results. If proved guilty, Google would have to pay fines that would significantly lower firms profits.

. Competition from Microsoft.Microsoft is gaining a market share in internet searches and is playing an important role against Google. The company has also

introduced Windows 8, the OS aimed for mobile devices, to carve out its market share in mobile OS market. In both fronts, internet search and mobile OS, Microsoft is

challenging Google and is taking away the potential revenues.

http+**www.strategicmanagementinsight.com*swotanalyses*googleswotanalysis.html

. $hat are vision, mission, and objectives of "oogle Inc.% Are these e3ective%"oogle#s mission is to organi!e the world#s information and make it universally accessible

and useful.

-. 4o a thorough e'ternal scanning by+a. T556 Analysisb. Issues 6riority 7atri'c. )ive )orces Analysisd. 7apping trategic "roupse. Industry 7atri'f. 8ompetitive Intelligence gatheringg. 4rawing 5'ternal )actors Analysis ummary 95)A:

2. 4o a thorough internal scanning 9organi!ational analysis: by+a. Identifying "oogle#s core and distinctive competenciesb. Identifying its competitive advantage and commenting if it is sustainable%c. &earning business model9s: "oogle follows and its advantage*disadvantages%d. 8ommenting on industry and corporate ;alue 8hain Analysis of "ooglee. tating what organi!ational structure "oogle follows and is it e3ective%f. )inding and commenting on strategic marketing issuesg. )inding and commenting on strategic 4 issuesi. )inding and commenting on strategic operations issues

j. )inding and commenting on strategic ?=7 issuesk. )inding and commenting on strategic information system*technology issuesl. 4rawing Internal )actors Analysis ummary 9I)A:

4o as much as possible for item 2. @nce we


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