[pic] [pic] [pic] Lecturer: Dr Eric Kuan Student Name: Ng Chee Kng Mike Student ID: 06027964 Batch No: BBME1 0639A [pic] Content Page |Page No | |Acknowledgements |4 | | | | |Executive Summary |5 | | | | |Proposal |6 | | | | |Chapter 1: Introduction |10 | |1. 1 Introduction to Company |11 | |1. Task Environment |11 | |1. 3 Rationale of the Project |12 | |1. 4 Scope of the Project |12 | |1. 5 Project Objective |13 | | | | |Chapter 2: Methodology |14 | |2. 1 Approach |15 | |2. Data Sources |15 | | | | |Chapter 3: External Environment Analysis |16 | |3. 1 External Environment |17 | |3. 1. 1 PESTEL Analysis |17 | |3. 1. 2 Competition Within Industry |18 | |3. 1. 3 Industry Life Cycle of Internet |21 | |3. Summary of Key Macro Environment Finding |24 | | | | |Chapter 4: Internal Analysis |25 | |4. 1 Resources and Capability Analysis |26 | |4. 1. 1 Resource Analysis |26 | |4. 1. 2 Brand and Reputation |27 | |4. 1. 3 Human Resources and Culture |29 | |4. Summary of Key Micro Environment Finding |32 | | | | |Chapter 5: Evaluation & Analysis for Strategic Formulation |33 | |5. 1 Strategies Models |34 | |5. 2 Review of Strategic Options On Corporate Strategies |35 | |5. 3 Recommendation of Strategic Options on Business Strategies |37 | |5. Selection of Strategic Options | | | | |Chapter 6 Strategic Implementation |38 | |6. 1 Recommendation for Structure |39 | |6. 2 Benefits to Be Derived From Implementation Strategies |40 | |6. 3 Assessment of Company Performances |40 | |6. Balanced Scorecard |41 | | | | |Chapter 7 Conclusion |42 | | | | |Chapter 8 Usefulness of Strategic Management Models |44 | |8. 1 Porters’ Five Forces |45 | |8. 2 Industry Life Cycle |45 | |8. 3 PESTEL |45 | |8. 4 Resource Base Model |45 | |8. 5 Generic Building Blocks of Competitive Advantage |45 | |8. The Grand Strategy Matrix and Corporate Grand Strategies |46 | |8. 7 Mckinsey 7s Framework |46 | | | | |Appendix |47 | |Bibliography |49 | |References |50 | (Total word count: 3081 Words) Acknowledgements
This project could not have been written without Dr. Eric Kuan who has so patiently guided me throughout the completion of this project. I would like to thank him for his guidance and giving me a lot of useful advices which enhance my project and the learning process. Executive Summary The word “Google” is a very familiar word to everybody. It is the word that everyone will think of when they want to look for an answer, or some information to thing that they don’t know. In reality, Google doesn’t have the answer to everyone question, but rather it has the answer to searching for solution and information. Google currently is having close to 70% of USA search engine market.
And now Google is launching almost programs that anyone can think of, from Google Earth, Google Map, Gmail to the recently launch of HTC dream phone. For sure, Google is standing tall among its competitors which were founded much earlier. This project aims at looking into this giant internet company and analyzes its muscle power and it’s Achilles’ heel. Not only that, it will also analyze its external environment to look out for threats and opportunities. This is done by looking at Google’s market share and brand ranking together with using various strategic models and theories such as PESTEL, Industry Life Cycle and Resources & Capabilities.
After which, a list of strategic options will suggested and each of the options will go through criteria test to determine the best one to help Google gain further success. Regardless of those who are fascinated of Google’s success or not, the content of this project follows simple process to allow readers to understand little more about strategic management. (Word Count: 235 Words) [pic] Proposal Description of company activities Google, Inc. is an American public corporation which started off as a search engine and earns its revenue from advertising. It then diversifies into e-mail, online mapping, office productivity, social networking, and video sharing services. Google is currently known as the number one internet search engine in the world. Reason for selection
I would like to learn how Google is still consistently achieving growth after such a long period of time. I would also like to investigate the company’s culture and how employees are so loyal to the company. It has been named the top place to work in according to Fortune Magazine 2007 and 2008. [pic] Google Office @ Zurich Source: Extracted from http://www. popgive. com/2008/03/google-office-in-zurich. html Importance of company to National or Regional economy Google has a total of US$ 16. 593 Billion (2007) in revenue and 25. 33% US$ 4. 203 Billion (2007) in Net Income. It has open 68 offices around the world to serve its local community. In May 7, 2007, Google Inc. opened an office in Singapore. [pic] Google Office @ Beijing
Source: Extracted from http://www. technomoz. com/google/google-offices-around-the-world Recent strategic choices company had made 17th January 2006: purchase of a radio advertising company “dMarc”, which provides an automated system that allows advertiser to place their ads on the radio. Google can now combine two niche advertising media—the Internet and radio. 13th November 2006: acquisition of Youtube at US$1. 65 billion. 31st October 2006 – Google announced that it had also acquired JotSpot, a developer of wiki technology. In April 2008, Google announced its purchase of popular social network Facebook in a cash and stock deal valued at $25 billion.
Current or likely strategic issues facing the company Due to the recent financial Global recession, Google has acknowledged in late November that it planned to significantly reduce the number of its contractors and retain all of its full-time employees. Recently, China has warned Google and other popular web portals that they must do more to block pornographic material from reaching Chinese users, the latest in a series of government crackdowns targeting internet content. China authorities will block out Google if fails to implement action. This would lead Google to lose a huge market segment. Word Count: 353 Words [pic] Chapter 1: Introduction
Name of Company: Google 1. 1 Introduction to Company Google was founded by Larry Page and Sergey Brin in January 1996 as a dissertation project while he was in Stanford. Brin and Page then developed the PageRank algorithm which was used to create the Google Search engine. 1. 2 Task Environment The buyers and suppliers of Google are very special in this case. The main customers of Google are Internet users who use its search engine and as well as advertiser who places advertisement using Adsense. The suppliers are also the internet users which the advertisers are targeting. Other suppliers of Google are the contract workers who work for the company.
Competitors of Google in the America region are Yahoo, ASK and MSN which also provide search engine. Main Rivals in the China market are Baidu. com and Sina. com, not to mention Yahoo which has the market in China too. Logos of Google’s rivals are as presented in Figure 1. 1. Figure 1. 1 Rivals’ Logo [pic] Source: Figure created by Mike Ng 1. 3 Rationale of the Project To investigate how Google is still consistently achieving growth after such a long period of time by finding out its competencies. To get some insight of how Google is still able to achieve tremendous growth since it was founded. 1. 4 Scope of the Project Scope of the project is to look into various services that Google is providing for internet users.
In the current competition, search engines company can no longer just provide search engines but also other services such as free web-base email, auction, news and language translation just to name a few. Google’s services and its competitors’ must be made to provide a clear picture. 1. 5 Project Objective The project objective is to sustain the strategic growth of Google in the search engine industry. This can be done by continuing to follow Google’s goals: To Organize the World’s internet information. [pic] Chapter 2: Methodology 2. 1 Approach This involves looking at the micro and macro environment of Google business. Macro environment analysis would look at Google’s supplier, buyers as well as the competition and the external factors such as political, legal and social cultural.
Some models to that would be used in the analysis include: Porter’s 5 forces, PESTEL and Industry Life Cycle. Micro environment analysis will look at the resources, capabilities and core competencies of Google. 2. 2 Data Sources Data that would be use in this strategic analysis would come from various secondary data sources. Financial Data from Annual report of Google as well as its competitors would be used to for comparison. Other external sources of information would mostly come from internet, online journal, newspaper report and magazines. [pic] Chapter 3: External Environment Analysis In 1998, it was formally incorporated as Google . Inc at a friend’s garage.
By 1998, even though Google still consider itself in “Beta” stage, it had about 60 million web pages in its database and its search results were already much better than its competitors such as Excite. com and Hotbot. The Google had attracted a growing number of loyal Internet users, who liked its simple design. In 2000, Google started selling advertisements tag with search keywords. The ads were text-based so to avoid cluttered page design and to maximize loading speed. By 2004, Google has covered over 75% of the US web search market. Even though Google is now the number 1 in the industry, it still has to compete with competitors. Google has to expand or change its business model in order maintain its number 1 position. 3. 1 External Environment 3. 1. 1 PESTEL Analysis PESTEL analysis is carried out on the general environment of Google.
The opportunities and threats are also identified The result of PESTEL analysis are presented in table 3. 1 Table 3. 1 PESTEL |Political |China has restricted surfing of illegal website that can be found through |Threat | | |Google. China authority has threatened to block Google website if it doesn’t | | | |filter off those illegal website. | | |Economical | Economical Downturn that left many jobless. Many people would be looking for |Threat/ Opportunity | | |job via the internet. Internet would be a source for jobless to kill time. | |Social Cultural |Google tends to not have a ‘face’ for customers |Threat | | |Increasing more people are getting more IT savvy. |Opportunity | | |Booming Gaming Industry. | | |Technological |Technology set trends, internet direct advertising and portable applications | | | |Innovative web applications | | | |New Generation phone requires GPS software like Google Map (E. g.
HTC launched a| | | |Dream Phone with Google) |Opportunity | |Environmental |Certain Environment happening prompts Internet user to search News online. | | | | |Opportunity | |Legal |Click Fraud-Google “Bombing”, a kind of attempt to raise the ranking of a given|Threat | | |page in results from a Google search, often with humorous or political | | | |intentions. | | |Department of Justice requested search histories; Google went to court. | | | |Battle on “Net Neutrality” | | Source: Table Created by Mike Ng 3. 1. 2 Competition Within Industry The analysis of the competition within industry is done by using Porter’ 5 forces The findings from the analysis are presented in Figure 3. 1 Figure 3. 1 Porter’s Five Forces of Google [pic] Source: Info from http://mbtgoogle2. blogspot. com/2008/09/porter-5-forces-for-google. html Figure Created by Mike Ng Google is currently dominating the USA’s market share of the Search engine as presented in Figure 3. 2.
This reflects that Google has attained competitiveness through its cost leadership and differentiation competitive advantages. However Google still lag behind in the Asia Market as presented in Figure 3. 3. Figure 3. 2 Market Share of Google in USA [pic] Source: Data from http://www. hitwise. com/datacenter/main/dashboard-10133. html Pie chart created by Mike Ng Figure 3. 3 Google’s Market Share in Asia [pic] Source: Extract from http://www. thomascrampton. com/media/googles-tiny-market-share-of-search-in-asia Google is lagging in some Asian country because of its lack of exposure and the countries’ language incompatibility. 3. 1. 3 Industry Life Cycle of Internet
The population of the global Internet users can be presented in Table 3. 2 Table 3. 2 World Internet Usage Statistics [pic] Extracted from Internet World Stats, http://www. internetworldstats. com/stats. htm According to the information as presented above, the growth of internet users is 23. 5% as compared from 2008 to the base year 2000. An average of 3% annually. It can be safely conclude that the industry life cycle is still in the growth stage as illustrated in Figure 3. 4. Figure 3. 4 Industry Life Cycle of Internet. [pic] Source: Figure Created by Mike Ng The Opportunities and Threats in External Environment can be found in analysis as presented in Table 3. 3 Table 3. 3 Opportunities and Threats of Google Opportunities |Threats | |Google can increase switching cost by tracking users’ search |Google partially depends upon some portals like AOL. Getting | |histories with their permission and could remind users through |those contracts terminated, Google would lose considerable share | |emails for the relevant search updates as per their personal |of its revenue. | |interest. |There is no long time entry barrier in this business. Many | |Google can become a mass-market portal like Yahoo and MSN and can|competitors can emerge in coming years with same services, better| |increase switching cost for its users. |interface and names and can catch p Google’s market. | |Google can add “sticky” like chat rooms and email systems to |Google can get trapped in issues regarding privacy if it decides | |attract users and survive in tough competition. |to go for highly personalized search for which it has to capture | |Google can enhance personalized and localized searching and can |user’s personal information. | |also add localized paid listings of advertisers. |If Google decides to merge with some already established | |Google can start new services like multimedia, product search, |mass-market portal, it will start loosing its well earned brand | |private database, and print media. |name. |Google can also merge with an established mass-market portal to |Competition and rivalry: | |lock in large number of users and advertisers. |Portals like yahoo provide more free services and solutions with | |Google can start giving full fledged services on hand held mobile|conventional search than Google do. | |devices to capture market beyond conventional internet. | | |Growing numbers of Global Internet users. | | |Many jobless people would be looking for jobs via the internet. | |Able to tap in Asian Markets. | | Info Extract from Hutch’s Diary, 2009, http://harshacharya. blogspot. com/2006/09/google-inc-swot-analysis. html Table Created by Mike Ng 3. 2 Summary of Key Macro Environment Finding The key external finding of Google is presented in Table 3. 4. Table 3. 4 Summary of Key Macro Environment Finding of Google |Source |Description | |Figure 3. 4 |Growth stage in the Industry Life Cycle | |Figure 3. |Lag behind in Asian Markets | |Table 3. 1 |Launched of Dream Phone with HTC | |Figure 3. 1 |Booming Gaming Industry | Source: Table Created by Mike Ng [pic] Chapter 4: Internal Analysis 4. 1 Resources and Capability Analysis This analysis aims at investigating Google’s internal resources and it capability that can help to attain the desired growth. Figure 4. 1 Resource Base Analysis [pic] Source: Adapt from Grant 4. 1. 1 Resource Analysis Employee: 20,222
Tangible Resources: US $31. 768 Billion, The Google headquarters, the Googleplex, Market Cap of US $96. 472 Billion. These resources have led to capabilities that can result in superior efficiency, quality and innovation core competencies. Intangible Resources: Google started off with PageRank algorithm that was implemented in its search engine. Over the years, Google have acquired many companies and their technology to derive its own service. The list of companies that Google has acquired in 2007 and 2008 are presented in Table 4. 1. Other companies that were acquired between 2001 and 2006 are presented in Appendix 1. Table 4. 1 Acquired Companies |No. Date |Company |Business |Derived Service | |1 |02007-01-04 January 4, 2007 |XunleiC |File sharing | | |2 |02007-02-16 February 16, 2007 |Adscape |In-game advertising |AdSense | |3 |02007-03-16 March 16, 2007 |Trendalyzer |Statistical software |Google Analytics | |4 |02007-04-17 April 17, 2007 |Tonic Systems |Presentation program |Google Documents | |5 |02007-04-19 April 19, 2007 |Marratech |Videoconferencing |Google Talk | |6 |02007-04-13 April 13, 2007 |DoubleClick |Online advertising |AdSense | |7 |02007-05-11 May 11, 2007 |GreenBorder |Computer security |Google Chrome | |8 |02007-06-01 June 1, 2007 |Panoramio |Photo sharing |Blogger Maps | |9 |02007-06-03 June 3, 2007 |FeedBurner |Web feed |Google Reader | |10 |02007-06-05 June 5, 2007 |PeakStream |Parallel processing |Server (computing) | |11 |02007-06-19 June 19, 2007 |Zenter |Presentation program |Google Documents | |12 |02007-07-02 July 2, 2007 |GrandCentral |Voice over Internet Protocol |Google Mobile | |13 |02007-07-20 July 20, 2007 |Image America |Aerial photography |Google Maps | |14 |02007-07-09 July 9, 2007 |Postini |Communications security |Gmail | |15 |02007-09-27 September 27, 2007|Zingku |Social network service |Google Mobile | |16 |02007-10-09 October 9, 2007 |Jaiku |Micro-blogging |Google Mobile | |17 |02008-07-18 July 18, 2008 |Begun |Online advertising |Google Adwords | |18 |02008-07-30 July 30, 2008 |Omnisio |Online video |YouTube | |19 |02008-09-12 September 12, 2008|TNC |Weblog software |Textcube. com | Source: Table Created by Mike Ng 4. 1. 2 Brand and Reputation Google is now currently placed in the 10th position in the Best Global Brand according to Interbrand. It can be presented in Table 4. 2 Table 4. 2 Global Brand 2008 Rank |2007 Rank |Brand | |2 |3 |[pic] | |3 |2 |[pic] | |4 |4 |[pic] | |5 |5 |[pic] | |6 |6 |[pic] | |7 |7 |[pic] | |8 |8 |[pic] | |9 |9 |[pic] | |10 |20 |[pic] | Source: Extracted from Interbrand, http://www. interbrand. om/best_global_brands. aspx Google jumped from 20th in the previous year, it is now standing at 10th place. At 43% growth, it is the highest among the top 100 global brands. Google’s brand position reflects superior efficiency, quality, customer responsiveness and innovation core competencies. These core competencies would lead to competitive advantages that enhance the competitiveness of Google. 4. 1. 3 Human Resources and Culture: Google always tries to hire the cream of the crop among engineers in the industry. With an average of 200 job applicants are received a day, Google has a pool of people to choose from. Google has now many highly qualified employees.
Employees are required to spend 20% of their work time pursuing their personal interest.. Free gourmet food is served at the cafeteria in Googleplex. Not to mention gym, massage room, pool tables are some of the facilities that the employees can use inside. Employees are allowed to furnish their workplace whatever they like to make themselves comfortable. That is why Employees of Google are willing to spend the night at their workplace to finish their work. Another interesting culture of Google is that it strongly encourages creativity to create new innovation. Ideas are spread within the organization so that ideas can be build upon by other employees.
Figure 4. 2 Generic Building Blocks of Competitive Advantage [pic] Adapt from Hill et al. (2007) Superior Quality: Google adopt PageRank algorithms that provide search result that is more relevant to the internet user compare to other search engines. This result a trend that Internet users resort to Google to answer their question from the internet. Superior Efficiency: The layout design of Google main page and the result page is very simple. The reason for this is to provide fast search processing and downloads of information to the internet users. In October, Google disclose its data centers had an average Power Usage Effectiveness (PUE) of 1. 1 which was consider a low usage rate. Google is consistently studying how to reduce power usage such as making chillers and air movers were run simultaneously while machine were running and using fans to cool spaces that don’t need to be cooled. This help to reduce in cost. Superior Innovation: Apart from PageRank that is the prized Innovation of Google, Engineers and IT specialist are building on PageRank to improve its search result. Other Innovation such as Google Earth is a free software that is develop by Google allows Internet users to “explore the world”. Superior Customer Responsiveness: The size of Google results the weaknesses of the Customer responsive area.
The main hotline to Customer Service or Tech Support, will direct customer to the Google website where they are prompt to submit and Email. According to the author’s research, many advertisers have complained about the poor customer service of Google. Overall Strength and Weaknesses of Google are presented in Table 4. 3 Table 4. 3 Strengths and Weaknesses Analysis |Strengths |Weaknesses | |Google – Already number one search engine has established a brand|Many spammers manipulate Google’s ranking technology by creating | |name, in which its users trust. It’s dependable, reliable and |dummy sites with thousands of links to pages that they wanted | |fast. Google to rank highly. | |Possess many acquired technology |Google’s contextual advertising was perceived by marketers to be | |Google needs very little end user marketing as the name itself is|less effective in generating sales because visitors to web pages | |getting word by mouth publicity. |showing editorial content were less likely than searchers to be | |Google has a simple interface and it gives comprehensive results |ready to buy. | |without confusing its users. |Contextual search algorithms are not 100% perfect and many a | |Google has ways to keep low operation cost |times make mistakes. |Google has hired PhDs who are continuously working hard in order |Google’s business model is complex, depending upon both | |to enhance search algorithms and make searching faster, efficient|google. com and mass market portals for its revenue. | |and relevant. |Although Google is a dominating player among search engine | |Google offers localized search called “search by location” where |websites, only 50% to 65% of web search queries are answered | |users can get results showing vendors, products and services |accurately by it. | |nearby their areas. |Google doesn’t have “sticky” like Yahoo! And MSN have which can | |Google also has a range of innovative additional services like |attract users. | |Images, Groups, Directory, and News.
Google didn’t complicate its|Google doesn’t have highly personalized search by which it could | |website by making itself a portal; rather it kept tabs for these |charge users with switching cost if they decide to leave Google’s| |services on its homepage so users can easily navigate and that |services. | |also keeps the website as simple as it was earlier. |Poor Customer service. | |Google has also come up with solutions for wireless handheld | | |devices, personalized toolbars, catalogues which are added | | |essence strengths. | | Info Extract from Hutch’s Diary, 2009 http://harshacharya. blogspot. com/2006/09/google-inc-swot-analysis. tml Table Create by Mike Ng 4. 2 Summary of Key Micro Environment Finding The key internal finding of Google is presented in Table 4. 4. Table 4. 4 Summary of Key Micro Environment Finding of Google |Source |Description | |Para 4. 1 |Large pool of expertise such as software programmer and engineers | |Figure 4. 2 |Culture that encourage development Innovation | |Table 4. 3 |Complaints of Poor Customer ervices | |Table 4. 3 |Provide good quality of internet searches. | Source: Table Created by Mike Ng Chapter 5: Evaluation & Analysis for Strategic Formulation Using Summary Tables 3. 4 and 4. 4, a few options of strategy can be determined out after using strategic models such as the Corporate Grand Strategies Matrix and Grand Selection Matrix (Please See Figure 5. 1 and 5. 2) which are used in conjunction. The strategic options are Market Penetration, Product Development, Vertical Integration, Horizontal Integration and Concentric Diversification. 5. 1 Strategies Models Figure 5. The Corporate Grand Strategies Matrix [pic] Adapted from Christensen, C,R, Salter, M. S, Steven son, H. H and Berg, N. A 1984. Google lies in Quadrant I, which indicates it is part of a rapid internet growth industry while maintaining a strong competitive position. Compared to its rivals in the USA, Google has more financial strength giving it an advantage over competitors. Globally, the company can make use of its resources/subsidiaries allowing an increase in customer base. Figure 5. 2 Grand Selection Matrix [pic] As Google has good strength, it can choose between Quadrant III or IV depending if it wants to redirect resources within the firm or to acquired nother company for resource capability as it is financial stable enough. 5. 2 Review of Strategic Options On Corporate Strategies Market Penetration- This involves of entering a market with current products. The best way and fastest way to achieve this is by gaining competitors’ customers (part of their market share). Another way is to attract non-existing users of Google or by attracting current clients to use Google services. As stated in Figure 3. 3, Google lags behind in Asian countries such as Korea, China, Hong Kong and Taiwan. The fast and easy way is to acquire leading search engine in each of these countries to gain exposure quickly. Product Development- Developing new product features.
This is something that Google and its competitors have been doing all along from a simple search engine, to email and news. Just recently, Google have launch Google Chrome: a web browser to its line of products. It will take some Innovation for Google to come out with a new product that will satisfy the present market. One area that the writer suggests is to look into the gaming area. As the economy downturn takes place, more people will go out of jobs and these people will stay more time at home in front of computer to play computer games. In other word, gaming industry is thriving business despite the economy downturn. Google can use it internal resources to tap into this industry. Vertical Integration: Something that Google has already done very successfully.
It has builds its own server computers as well as designing some of their components, writes its own operating systems, builds and operates its own data centers, owns much of the fiber-optic cabling through which its data travels, codes and delivers a suite of applications ranging from search engines to business productivity programs, sells and delivers ads over various media, operates its own checkout and payments service, writes much of its internal operating software, generates some of the electricity for its buildings, and even operates the bus system that brings its employees to and from work. Vertical Integration can be use to overcome its weakness according to the Corporate Grand Strategies Matrix. Google can acquire or probably outsource its customer service hotline to overcome its weakness in customer service. Horizontal Integration: Acquiring similar firms operating at the same stage in the industry. The option for Google in the horizontal Integration is to acquire its competitor such as MSN or Yahoo. MSN would be too much of resources to take over as it belongs to Microsoft. Yahoo would be the next best thing to acquire because its search engine is still being powered by Google.
However the only problem might be the Yahoo’s ego problem that might come in the way of acquisition. The problems with acquisition such as culture differentiation and value destroy might come along. Concentric Diversification: Acquisition of business that are related to Google in terms of technology, market or product. Recently, Google and its strategic Alliance partner HTC has launch it a new phone “Dream” which was pretty successful. Google can consider acquire HTC to have a share of the pie in the mobile industry. Another area of diversification as mentioned in product development is online gaming. One suggested company to look at acquiring is gamespy. com that hosted online gaming servers. 5. Recommendation of Strategic Options on Business Strategies Few recommendations of the options as mentioned above which would be the most feasible would be market penetration together with the combination of Cost leadership and Differentiation Strategy. The next option would be Concentric Diversification implement with Cost leadership and Differentiation Strategy. Of course, both strategies could be both adopt together by Google to achieve rapid growth if they have adequate resources. 5. 4 Selection of Strategic Options Criteria testing are used to help evaluate the different strategic options as presented in Table 5. 1. Table 5. 1 Criteria Testing Strategies Option |Selection Criteria | | |Suitable | |b) Effectiveness |As stated in Table 4. 1, Google brand value has a growth of | | |tremendous growth of 43%. Opening of 68 international offices | | |could be the reason for this as it raises branding awareness and | | |gain exposure.
Google has been coming out with free product to | | |help people with their daily work such as Google doc, a free | | |office utility software. | |c) Revenue |Google has a total of US$ 16. 593 Billion (2007) in revenue and | | |25. 33% US$ 4. 203 Billion (2007) in Net Income. | Table Created by Mike Ng 6. 4 Balanced Scorecard Balance Scorecard as present in Table 6. 1 offers goals and action to be taken from each area to help attain growth for the company. Table 6. 1 Balance Scorecard |Objective |Measurement |Target |Actions | |Financial Performance |Growth |Revenue Growth |At least US$18 Billion |Tap into other markets or | | | | | |diversify | |Customers |Responsive on Customer |Customer satisfaction: |To achieve at least 80% of|Outsource call Centre | | |enquiries |Number of phone enquiries |the phone enquires. | | | | |received and answered. | | | |Internal Process |Launch of more innovative |Revenue gain from these |At least US$ 0. 5 Billion |More ideas need to be | | |Services. |services |for each newly launch |generated from staffs. | | | |service within a year. |Marketing of new services. | |Learning and Growth |Reduction of time taken to|Time difference between |The most 6 months |Outsource capability or | | |launch service. |protocol and the launch of|difference between |acquired of firm | | | |actually service. |protocol and actually | | | | | |launch. | | Source: Adapt from Harvard Business Review, Robert S. Kaplan and David P. Norton Table Created by Mike Ng pic] Chapter 7 Conclusion Even though Google is a leading market leader in the Internet search engine and it is still achieving growth right from the point it was founded. However, after applying strategic models and doing internal and external analysis, it seems that even the giant have its Achilles heel and threats that cannot be ignore. Of courses, there will be other opportunities that Google can exploit with its current strengths. Applying of Strategic management has provided some insight on how to overcome its weakness and to achieve growth from other areas. As the saying goes, even the best will still have rooms for improvement. [pic]
Chapter 8 Usefulness of Strategic Management Models In this chapter, brief descriptions of the benefits that are derived from each methodology are given. 8. 1 Porters’ Five Forces This model displays the external forces that can affect the company’s performance. It identifies which area and how competitive it is and enables the company to monitor these areas. Various forces can be studied and understand how much it can affect the company. It is one of the basic models to analyze the environment before offer making strategic action 8. 2 Industry Life Cycle Industry Life Cycle helps management to understand the changes in the industry and what causes the change.
It shows what stages the industry is in and give a rough idea about what is going to happen in the industry for the next few years. This will help to create suitable strategy to help the company to grow as different strategies are needed at different stages. 8. 3 PESTEL This model is used to scan the macro-environment of the company and its industry, which can directly or indirectly affect the company or its competitors. It is a useful model not only in strategic management but for marketing research as well. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. 8. 4 Resource Base Model
By using this model, management can identify whatever resources and capability that the company possess, thus allow ideas to how to fully utilize and allocate them to help company to grow or sustain. 8. 5 Generic Building Blocks of Competitive Advantage Efficiency, quality, innovation, and customer responsiveness are the building blocks of competitive advantage. These building blocks are generic in that they provide four basic ways to lower cost and achieve differentiation. Any company can adopt the 4 building blocks no matter what industry it is in or what product or service it provides. 8. 6 The Grand Strategy Matrix and Corporate Grand Strategies The Corporate Grand Strategies, often called the master for business strategies provide basic direction for strategic actions.
Internal and external analysis must be done first in order to give an idea where the company is standing. After which, this matrix will suggest what actions to be taken in order to allow the company to survival or to thrive. 8. 7 Mckinsey 7s Framework This framework is based on the concept that any strategy must be able to fit with the culture of the organization in order to be successfully implemented. If a strategy runs into problems during or after implementation, it is often because that is a lack of fit between the strategy and variable of the culture. This framework therefore can help in the choice of process to know what went wrong in the implementation. Appendix 1 Acquire Companies |No. Date |Company |Business |Derived Service | |1 |02001-02-12 February|Deja |Usenet |Google Groups | | |12, 2001 | | | | |2 |02001-09-20 |Outride |Web search engine |Google Personalized Search | | |September 20, 2001 | | | | |3 |02003-02 February |Pyra Labs |Weblog software |Blogger | | |2003 | | | | |4 |02003-04 April 2003 |Neotonic Software |Customer relationship management |Google Groups, Gmail | |5 |02003-04 April 2003 |Applied Semantics |Online advertising |AdSense, AdWords | |6 |02003-09-30 |Kaltix |Web search engine |iGoogle | | |September 30, 2003 | | | | |7 |02003-10 October |Sprinks |Online advertising |AdSense, AdWords | | |2003 | | | |8 |02003-10 October |Genius Labs |Blogging |Blogger | | |2003 | | | | |9 |02004-05-10 May 10, |Ignite Logic |HTML editor | | | |2004 | | | | |10 |02004-06-23 June 23,|BaiduA |Chinese language search engine |Google Search /http://www. google. n| | |2004 | | | | |11 |02004-07-13 July 13,|Picasa |Image organizer |Picasa, Blogger | | |2004 | | | | |12 |02004-09 September |ZipDash |Traffic analysis |Google Maps for Mobile | | |2004 | | | | |13 |02004-10 October |Where2 |Map analysis |Google Maps | | |2004 | | | | |14 |02004-10-27 October |Keyhole, Inc |Map analysis |Google Maps, Google Earth | | |27, 2004 | | | | |15 |02005-03-28 March |Urchin Software Corporation |Web analytics |Google Analytics | | |28, 2005 | | | | |16 |02005-05-12 May 12, |Dodgeball |Social networking service |Google Mobile, Google SMS | | |2005 | | | | |17 |02005-07 July 2005 |Reqwireless |Mobile browser |Google Mobile | |18 |02005-07-07 July 7, Current Communications Group |Broadband internet access |Internet backbone | | |2005 | | | | |19 |02005-08-17 August |Android |Mobile software |Android | | |17, 2005 | | | | |20 |02005-11 November |Skia |Graphics software |Android, Google Chrome Browser | | |2005 | | | | |21 |02005-11-17 November|Akwan Information Technologies |Search Engines |Internet backbone | | |17, 2005 | | | | |22 |02005-12-20 December|AOLB |Broadband internet access | | | |20, 2005 | | | | |23 |02005-12-27 December|Phatbits |Widget engine |Google Desktop | | |27, 2005 | | | | |24 |02005-12-31 December|allPAY GmbH |Mobile software |Google Mobile | | |31, 2005 | | | | |25 |02005-12-31 December|bruNET GmbH |Mobile software |Google Mobile | | |31, 2005 | | | | |26 |02006-01-17 January |dMarc Broadcasting |Advertising |AdSense | | |17, 2006 | | | | |27 |02006-02-14 February|Measure Map |Weblog software |Google Analytics | | |14, 2006 | | | |28 |02006-03-09 March 9,|Upstartle |Word processor |Google Documents | | |2006 | | | | |29 |02006-03-14 March |@Last Software |3D modeling software |Google Sketchup | | |14, 2006 | | | | |30 |02006-04-09 April 9,|Orion |Web search engine |Google Search | | |2006 | | | | |31 |02006-06-01 June 1, |2Web Technologies |Online spreadsheets |Google Spreadsheet | | |2006 | | | | |32 |02006-08-15 August |Neven Vision |Computer vision |Google Maps | | |15, 2006 | | | | |33 |02006-10-09 October |YouTube |Video sharing |YouTube | | |9, 2006 | | | | |34 |02006-10-31 October |JotSpot |Web application |Google Sites | | |31, 2006 | | | | |35 |02006-12-18 December|Endoxon |Mapping |Google Maps | | |18, 2006 | | | | Bibliography 1. Hitt M,A, Ireland R. D. , Hoskisson R. E, Strategic Management: Competitive & Globalization, Thomson – South Western, 5th Edition, 2003 2. Barney J. B. , Gaining And Sustaining Competitive Advantage, Prentice Hall, 2nd Edition, 2002. 3. Grant G. M, 2005, Contemporary Strategy Analysis, 5th edition, UK, Blackwell Publishing 4. Pearce II J. A and Robinson R. B Jr. , 2007, Strategic Management – Formulation, Implementation and Control, 10th edition, New York: McGraw-Hill Irwin References 1. Strategic Analysis of Google (5th March 2009) URL: http://www. lideshare. net/joshs633/strategic-analysis-google 2. Case Study: Google, Inc (5th March 2009) URL: http://harshacharya. blogspot. com/2006/09/google-inc-swot-analysis. html 3. Porter’s 5 forces for Google (6th March 2009) URL: http://mbtgoogle2. blogspot. com/2008/09/porter-5-forces-for-google. html 4. Google’s market share tops 65 percent (6th March 2009) URL: http://news. cnet. com/8301-13505_3-9838695-16. html 5. Google Market Share Up (6th March 2009) URL: http://www. marketingpilgrim. com/2007/05/google-market-share-up-again. html 6. Top 20 Sites & Engines (6th March 2009) URL: http://www. hitwise. com/datacenter/main/dashboard-10133. 7.
Google’s Tiny Market Share of Search in Asia (7th March 2009) URL: http://www. thomascrampton. com/media/googles-tiny-market-share-of-search-in-asia/ 8. Google: Our Energy Efficiency is Improving (7th March 2009) URL: http://www. datacenterknowledge. com/archives/2009/01/28/google-our-energy-effi ciency-is-improving/ 9. World Internet Users and Population Stats (8th March 2009) URL: http://www. internetworldstats. com/stats. htm 10. Best global brands for 2008 (8th March 2009) URL: 11. http://www. interbrand. com/best_global_brands. aspx 12. How to Contact Google Customer Service (10th March 2009) URL: http://www. semreportcard. com/how-to-contact-google-customer-service/ ———————– Introduction