Running head: WEEK 6 ASSIGNMENT 2 1
WEEK 6 ASSIGMENT 2 2
Week 6 Assignment 2
BUS499 Business Administration Capstone
Dr. Brian Grizzell
August 12, 2018
Week 6 Assignment 2
Google Company is the unrivalled leader in the realm of internet search. The American company was incorporated in the year 1998 and ever since it entered the internet business, the company continues to grow exponentially every year, spectacularly in the stock market every year since 2004. Based on the company’s 2017 financial release, the Google recorded double return between 2013 and 2017. Despite the internet technology industry undergoing rapid and almost unpredictable evolutions, the company continues to grow globally with its operations robustly present everywhere in the world. Even though competition in the search industry remains visible, Google has always stayed unaffected by the emergence and growth by new entrants in the industry since it clearly commands the largest market share in the internet search industry (Grant, 2016).
This paper, to be specific, discusses how certain aspects of the general environmental segments rate high in the company. In addition, how particular models of competition would determine the future progress of the company are analyzed too. Nevertheless, the company’s core competencies are also discussed in addition to how the core competencies strengthen the company with regard to the effect of the core competencies on Google’s strengths and possible weaknesses. Finally, the manner in which its value chain can be used to create value on the resources, core competencies and capabilities of the company are discussed as well.
Further, the two segments of general environment (external factors capable of influencing the business operations) that would influence the progress of Google Corporation more are social factors and technology factors (Pulver, 2012). To begin with, as regards the influence of social factors on the company, it is clear that the growth of the company has been favored mostly by the demographic of age and population growth. Although people across all ages considerably use Google products, it is apparent that the burgeoning millennial population has undoubtedly benefitted the growth and advancement Google Corporation. Certainly, the millennial population world over are very tech-savvy in addition to being avid consumers of internet products. Ideally, millennial population is the majority users of the company’s products.
Additionally, technological factors are certainly the segment that has greatest impact on the adaptability of the company to changes in external environment of the company. In reality, Google is known for innovativeness and creativity in information technology. The products of the company are always evolving while it keeps introducing new products to the customers. Fortunately, Google products have always gained massive popularity with the customers of the company whenever they upgrade their products or whenever they introduce new products to the customers. For instance, products like Google Plus, Google Translate, Google Chromebook, and Google Maps are examples of Google’s products introduced over the last few years that received impressive customer approval.
Five Forces of Competition
Further, the five models of competition help corporations to analyze their products, customers and competitors with the aim of maintaining profitability in their industry. For fact, Google is not an exception in this respect. Based on this, I would estimate that the two models of competition that are significant to the company are the power of substitute products and the threat of new entrants. First, the power of substitute products is a model that relates to alternative products that consumers of the products of a given company can resort to using if they became superior to the products of the company. In this regard, social platforms like Messenger and Skype are reliable alternatives to Google Plus and Google Duo (Rumelt, 2012). Thus, the company prioritizes customer experience as the best way of analyzing their competitors so that it designs products to provide internet services conveniently to customers (considering that its competitors provide easily accessible alternative products). This involves cutting-edge innovations by both the suppliers of software products to Google and the company’s engineers.
Second, the threat of new entrants is a force that ranks among the major factors influencing the progress of Google Company. In reality, the internet industry is very open to new companies since hindrance to entry into the industry is non-existent. For this reason, it is believable that Google Company does not ignore the possibility of new entrants emerging at any time. As such, the Company maintains provision of flawless internet products as well as diversifying into making smartphones and laptops in order to stay profitable amidst cutthroat competition posed on its various internet services.
Indeed, these two forces of competition have greatly influenced the operation of the company as regards innovation and diversification for future relevance. Recently, the company developed a strategy to secure its main source of income (internet advertising) which was facing stiff competition from major competitors (Chaffey & Ellis-Chadwick, 2012).
. The advertisements are currently pinned both on Google search and You Tube to offer more user convenience relating to access to the advertisements. This strategy is a major boost to the existence of the company as the leading search brand.
Predicting what the company would do in the future to address both the threat of substitute products and the threat of new entrants is challenging although speculating possible future response to these two forces cannot be entirely inaccurate. Google mainly focuses on search engine. Additionally, the company normally adopts the approach of diversification of its products and services (Pulver, 2012). Combining these two strategies to affect its implementation of the two forces of competition will definitely produce success even in the future. Apparently, the will possibly use these combined strategies to enhance their focus on the development of their products through intensive market consolidation approaches.
While Google is the leading search giant in the world, it is still exposed to several external threats that cannot be overshadowed. The first external threat the company faces relates to competition. Since new services enter the internet industry so often, the company is always obliged to invest heavily on quick advancement for it to remain competitive. These expenses raise the cost of production while shrinking the profit margin. Another threat to Google is economic downturn. Naturally, economic recession reduces consumer spending-power. Again, sourcing for revenue in a recessed economy is undoubtedly challenging (Chaffey & Ellis-Chadwick, 2012).
Threats and Opportunities
Essentially, Google’s most serious threat is competition from other online advertising rivals like Facebook, Apple and Microsoft. On the other hand, the company has a great opportunity in Google Plus. For Google to stay competitive, Google Plus offers the best platform on which to merger all its products thus giving Google a clear edge in social networking and internet search services. In as much as these two factors are both micro environments, making these adjustments can add a more significant value to Google’s competitive ability.
Strengths and Weaknesses
Reasonably, combining all the internet services Google offers in one spot is a change that the competitors would struggle to match. As such, Google’s most serious and greatest weakness when combined according to the previously mentioned strategy, the Corporation can undoubtedly empower the Google brand in a manner that its differentiation approach can produce the most benefits. Nevertheless, using Google Plus as the main marketing brand would bring about the marketability of other physical products like Google Pixel smartphones and Chromebook laptops. The popularity of these products would further lead to increase in the consumption of Google Android Operation System among other services (Grant, 2016). Hence, addressing the threat of competition by using Google’s greatest opportunity (Google Plus) is a beneficial mechanism.
The right strategy that Google can implement to take maximum advantage of its strengths include the following. As a start, Google’s strengths relate to the company commanding the largest customer base in search engine market, dominating the online advertising market, leading in the mobile operating systems, having the most popular browser (Google Chrome), and having one of the leading brands in the global business realm. For the company to take maximum advantage of these strengths, the strategy Google should implement is working on the quality of the services it offers by setting the ideal level of quality that can be accepted as the appropriate standard in the market. In addition, it is important that the qualities introduced are well valued in conformity with the market prices, so that competitors do not use the pricing factor to gain more market base. Again, it is necessary that the finances spent on innovation, creation and implementation of product improvement do not exceed the financial strength of the company.
On the other hand, Google’s most significant weakness is the company’s overdependence on online advertising revenue. For this reason, the strategy that Google can implement to take advantage of this weakness is to redesign its social media platform for users who visit this social media platform can get the same quality that is available in the products of competitors like twitter and Facebook. Investing in the growth of Google Plus can make the company to acquire more formidability in the social media realm hence achieving the ultimate goal of diversification. Overall, as above mentioned, the advantages the company stands to gain by investing in additional major sources of revenue.
Resources, Capabilities, and Core Competencies
Ideally, the success of Google bases on two main resources namely technical infrastructure and human resources. First, the technical infrastructure of the company offers security in a global capacity in all the information processes at the company. The benefit of the infrastructure to the company is the ensuring of security in the delivery of services, safe storage of data to guarantee the privacy and personal safety of all the consumers, safe interconnection between the various Google services available online and security to the staff of the company. The safety that the infrastructure provides adds to the satisfaction and reliability perception on the company by the users (Rumelt, 2012).
The infrastructure is secured through the progressive profiles in which security personnel are deployed to protect the data centers. Subsequently, the safety stage involving the protection of the company’s data hardware and software (the two most important components of the infrastructure) is given serious attention. The final profile of protection relates to the protection of the restricted technical processes that offer support to the entire infrastructural system.
The human resource of the company is believed to be the best-managed human resource power in the world considering the level of freedom and comfort they enjoy in their work environment. This environment enables them to be creative and innovative. Moreover, the company’s hiring techniques reflect improvement in equitability, diversity, inclusivity and high levels of integrity with regard to gender and ethnicity. For example, women make up 30.9% of Google’s global workforce. More importantly, the company’s greatest strength in relation to human resource is innovativeness. The company employs some of the most innovative workforce in the field of internet technology. The employees are trained to stay abreast with the best approaches to innovation of internet and communication technology.
The distinctive capabilities of Google Corporation relate to Partnerships and financial capabilities. As a start, partnerships have contributed immensely to the growth and global reach of the company. For instance, the Partnerships with Dish Network and Sony Corporation have contributed to more developed ability to innovated and invest. These alliances are productive since they boost Google’s ability to put more financial resources into new technological ideas. Furthermore, Google has important software operating capabilities that distinguishes it from other companies. Truly, this peculiar software capability enables the company to develop cooperative alliances with contracted software creators (Rumelt, 2012).
Finally, the company can utilize its core competencies to create value by establishing the opportunities discovered from the analysis of its value chain. Based on this, Google can create value by ensuring that the optimal conditions availed in the internal environment of the company equates the abilities of its third-party associates, key stakeholders and direct partners. This requires the company to implement strategies to complement the resources, capabilities and core competencies of Google’s partners and contracted companies. In general, such steps can guarantee success in all the various stages of value chain leading to provision of services with excellent quality to users of the company’s products (Grant, 2016).
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Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
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Rumelt, R. P. (2012). Good strategy/bad strategy: The difference and why it matters. Strategic Direction, 28(8).