Google Strategy Analysis Essay

The company’s strategy of Google is “ broad differentiation”, which is differentiating the firm’s product offering from rivals’ with attributes that appeal to abroad spectrum of buyers. Google’s search-based ads were displayed near Google’s search results and generated advertising revenues of nearly 22. 9 billion dollar in 2009. The company also generated revenues of 761,000 dollar in 2009 from licensing fees charged to businesses that wished to install Google’s search appliance on company intranets and from a variety of new ventures.

New ventures were becoming a growing priority with Google management since the company dominated the market for search based ads and sought additional opportunities to sustain its extraordinary growth in revenues, earnings, and net cash provided by operations. Market target Google was the leading Internet search firm in 2010, with 60+ percent market shares in both searches performed on computers and searches performed on mobile devices.

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While Google’s growth initiatives seemed to take the company into new industries and thrust it into competition with companies ranging from At and T to Microsoft to Apple, its CEO, Eric Schmidt, saw the new ventures as natural extensions of the company’s mission to “organize the world’s information and make it universally accessible and useful”. The key elements of the strategy 1. brand Google was the leading Internet search firm in 2010, with 60+percent market shares in both searches performed on computers and searches performed on mobile devices.

And Google was the world’s most-visited Internet site, with nearly 147 million unique Internet users going to Google sites each month to search for information. Many users have loyalty index with the brand, and they will like to use the product or services for Google. 2. ventures Google likes to develop new ventures. New ventures were becoming a growing priority with Google management since the company dominated the market for search based ads and sought additional opportunities to sustain its extraordinary growth in revenues, earnings, and net cash provided by operations. . technology

The development of Google’s search technology began in January 1996 when Stanford University computer science graduate students Larry Page and Sergey Bring collaborated to develop a new search engine. Google has many good workers, and they always update old things and set up new things. 4. management Google had a good and only business model; it had evolved since the company’s inception to include revenue beyond the licensing fees charged to corporations needing search capabilities on company intranets of websites.

They set 10 principles of Google’s corporate philosophy to remind their worker to be efficiency. SWOT analysis Strengths 1. Significant brand image It has established a brand name for itself and is considered to be the number one search engine on the web. It is considered to be among the top 10 brands in the U. S. It gets reputation by its popularity which proceeds by its word of mouth publicity, so it doesn’t need to put much effort in marketing its search engine. 2. strong infrastructure base and technology.

The speed and simplicity of its search engine is quite reliable and user friendly. It offers many products and services i-e; Desktop products, Mobile products, Web products, Hardware products. It has a low operation cost regarding its products and services. It has hired PhDs specially to work for enhancing the search engine algorithms which will render the search faster, relevant and more efficient. It provides its search engine interface to 88 languages which is quite helpful for the locals of the countries.

It uses state-of-the-art technology to catalog the pages to give the most updated outcomes to its users 3. robust financials Google’s business model allowed advertisers to bid on search terms that would describe their product or service on a cost-per-impression (CPI) or cost –per-click (CPC) basis. Google’s search-based ads were displayed near Google’s search results and generated advertising revenues of nearly $22. 9 billion in 2009. The company also generated revenues of $761,000 in 2009 from licensing fees charged to businesses.

And the company’s 2006 acquisition of YouTube allowed it to receive advertising revenues for ads displayed during Internet videos, while its 2008 acquisition of DoubleClick allowed the company to generate advertising revenues through banner ads. Weakness 1. lack of product integration It is dependent mostly on its search based advertising. There is the risk of facing dead ends for the users, who find the citation but not the whole text. It has lack of focus regarding the service of search engine.

Spammers usually take advantage of Google’s ranking technology by creating sites that contain a lot of links by which they end up getting higher ranks. Its localized search also results in errors at times. Its link-based ranking tech. mostly didn’t work on actual traffic analysis. Its cost-per-click advertising charge & ranking policy makes it difficult for the clients to predict the positioning of their ads and their costing as per se. Its contextual advertising is considered less effective regarding sales generation, and the algorithms behind the search are erroneous. Opportunities . new product and services It can become a mass-market portal like Yahoo and MSN and can increase switching cost for its users.

It can increase the internet usage which will render the usage of google. com to be increased as well. It can provide more services to the hand-held devices to capture more market that goes past the conventional internet. It can increase its overall ad spending online. 2. strategic acquisitions Its can enhance by having new acquisitions. 3. growing mobile advertising market It can add localized vendors paid advertisements on the localized search. It can merge with an already existing mass market portal to cover more ground regarding its users. Google can also merge with an established mass-market portal to lock in large number of users and advertisers. 4. positive outlook for Android smart phone Threats 1. intense competition Competition from firms like Yahoo, MSN. Legal trials; Microsoft. Yahoo accounted for about 35 percent for searches performed on mobile phones in 2010.

There is no time constraint regarding the business, competitors can emerge with better interface and new ideas regarding the search mechanism that will make Google lose its market share. . hacking and related security issues It can lose control over the indexing policy. It can get stuck in issues if it decides to acquire information regarding its users’ personal information. Growth Options Evaluation 1. focus on improving search technology Although there are many users to use search engine from Google, and more than 60 percent market shares in both searches performed on computers and searches performed on mobile devices, users can choose other companies’ search engine to instead of Google.

They don’t have strong brand loyalty for Google. So it is a good way for Google to promote to catch the core users’ part of market. Pros: 1. To get more attentions for Google, then increase user’ brand loyalty. 2. To get more profits for users who need more higher and new technology. 3. To increase Google’s basic technology to insure the products that Google will make in the future will be based technology. 4. To own more talent, to develop and improve search technology. Cons: 1.

The cost for improving search technology will be increase. 2. People will change their cognize for Google’s brand image, because more attentions to search engine,. 3. Some advantages for Google will be lost or changed. 2. develop new ventures New ventures were becoming a growing priority with Google management since the company dominated the market for search based ads and sought additional opportunities to sustain its extraordinary growth in revenues, earnings, and net cash provided by operations.

Google had launched its Android operating system for mobile phones, which allowed wireless phone manufacturers such as LG, HTC, and Nokia to produce Internet-enabled phones boasting features similar to those available on Apple’s iphone. Then it had launched Google TV which allow users to search live network and cable programming; streaming video from providers and recorded programs on a DVR. The third launching is cloud computer. Pros: 1. Offer more users’ more services and product to make more profit. 2.

Be suitable for more people to help Google for making a better brand image. 3. Find more way to help Google’s development in the future. 4. Help Google’s products become more flexible, show the customers more options. Cons: 1. The cost for R&D is increase. 2. If their product or services will have some problems and the users can’t accept it , it’s very dangerous. Because it will affect the brand image. 3. Every way to develop has every risk. Recommendation and Implementation According to the information, we think the best way is developing new ventures.

Even though the cost will be increase; it’s cheaper than focus on improving search technology. In the meantime, Google’s strategy is broad differentiation, and it’s so suitable for this growth options. On a long view, it’s the best way for Google firm’s development. On the other hand, focus on improving search technology is a narrow way; it’s not adapted for company’s future. In the world, there are many competitors for search engine and their technology is not bad. If Google chooses to focus on improving search technology, they will lose more money or users in the future.

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