GOOGLE CASE STUDY

GOOGLE CASE STUDY

Google Company Background

Google is a technology company that was established in 1998 by Sergey Brin and Larry Page. Google search has become of most applied web-based engines. Based on the high demand of the internet by users in the 2000s, Google was seen as the avenue through which individuals and companies would get the results they wanted. One of the aspects that attracted the business community was the company’s ability to monetize its results. Google handles more than 70% of the online searches that are done globally. Product diversification has made Google to be one of the most influential firms in the high-tech industry.

In the US, Google has established various offices which are located in various states, including Illinois, North Carolina, California, New York, Oklahoma, Oregon, Arizona, Massachusetts, Michigan, Washington DC, and Pennsylvania. The company has continued to expand its workforce by recruiting college graduates through a specific website section that targets students. As one of the current globalization strategies, Google has established offices in other regions, including the Middle East, Asia-Pacific, Africa, Europe, and the Americas.

Vision and Mission

The key vision of Google is organizing the world’s information and make it universally useful and acceptable. The company has also adopted ten core values which the stakeholders can access through its website. The most important value for the company is emphasized by the phrase, “Don’t be evil.” The primary message that Google wants to pass using this phrase is that it should not compromise the integrity of outcomes of the searches. The company is also focused on providing easy access to global information in a single click. This vision has been achieved since Google has created crawling websites and databases that have adequate information required by internet users..

Google SWOT Analysis

Strengths

One of the major strengths of Google is its capability to monetize its search outcomes. Additionally, the core business model has become an essence of simplicity for the organization. Google takes into consideration the needs of all stakeholders. For example, the firm auctioned off its keywords applied in searches to advertisers. The advertiser who bids the highest is made to access the company’s sites that are located on the right-hand side of a page that returns the search results. The company has established a top spot that is determined by the amount per click multiplied by the statistical estimates that an individual would really click on an advertisement. Through this refinement, Google has benefited from high revenue, especially from its valuable real estate. Google has an expansive and skilled workforce that positively impact on its innovation and marketing strategies. For example, between 2001 and 2014, the company employed 56,000 people. Through its product improvement and diversification, the company revenue grew by $66 billion, while the net income increased by $14.4 billion in the same period(Case 19. Google in 2015).

Product diversification is also a key strength that has made Google enjoy a competitive edge. For example, given the high demand for its services, the company has invested in new brands such as mapping services like Google Maps and Google Earth, e-mail services, Google Apps, online word processing, and presentation programs. The firm meets the need of its emerging customers by providing Google Drive, the Chrome browser, and the mobile operating system. Google has established a hierarchical directory of webpages. This has assisted in driving traffic to the company’s site. Yahoo is one of the most popular portals on the web. Other strengths of the company include a large number of customers and relevant results that are unbiased by commercial considerations.

Weaknesses

A major weakness of Google is its excessive dependency on secrecy. The company does not disclose its basic formula and algorithm that are related to the internet. As a result, the company is seen by various experts as opaque and not undertaking many things behind the issue of secrecy.   Reducing ad rates is another concern for Google. Since 2013, the company has experienced low revenues from its advertisement section, thus reducing its profitability. The decline has been caused by the low performance of the global economy and competitors’ strategies to face off the company in the market.

Even though Google was serving more than three million searches per day in 1999, thus increasing its sales, it was spending $500,000 a month besides a lack of effective business model(Case 19. Google in 2015). Even though Google had established licensing deals with firms that used Google as their search technology, it was not generating adequate revenue for catering its liabilities. Overreliance on advertising is another weakness that Google faces. The business model that is adopted by the company mostly depends on advertising. This implies that any reduction in revenues generated by the advertisement sector will have a negative impact on the financial performance of the company. Google is faced with a challenge of a lack of compatibility with emerging devices such as tablet computers and mobile phones.

Opportunities

A key opportunity for the company is the use of the Android Operating System. This has made the company expand its customer base due to the high demand for this system, apart from remaining a direct competitor to Samsung and Apple. Another opportunity is for the company to diversify into the non-advertisement business model. For the company to remain profitable, it needs to diversify its brand portfolio and not heavily rely on ads as the major source of revenue. Introduction of Google Play and Google Glasses is an opportunity that has become a game-changer for the company. Given the large investment by Google in these areas, the company has the capacity to deal with the emerging area of nano-computing effectively. In addition, cloud computing is a primary opportunity for the company since it had wide experience in cloud and storage solutions. Through the cloud-computing model, the company is able to penetrate the enterprise market in an effective way.

Threats

Google is faced with a threat of declining market share due to stiff competition from Amazon, Facebook, and Instagram. The company is criticized for gender bias and lack of free speech. Male workers make up 68.4%, while female workers make up 31.6% of the workforce(Google Diversity Annual Report, 2019). The alteration of vital information has made Google’s secrecy to be questioned. For example, lawmakers in the EU and the US are concerned about the antitrust and censorship policies adopted by the company. Stiff competition from Amazon and Facebook is also a major threat to Google. The increasing features and popularity of the competitors will have a negative implication on the revenues generated by Google.

Strategies to Exploit External Opportunities

The increasing demand for the internet, especially in developing countries, is a major opportunity for Google. In turn, the company has continued to improve the effectiveness of its search engine. Likewise, Google has made a significant improvement in its search algorithms, besides making heavy investment in computing resources. As one of its business strategies, the company has diversified its digital devices sector. For example, Google was established to serve on PCs, but it has expanded in mobile devices. The company has also noted an opportunity that exists in the health sector. For instance, the company adopts Artificial Intelligence to detect diseases such as Diabetes, Multiple Sclerosis and Parkinson’s

Strategies to Build On and Protect Company Strengths

Google adopts two competencies that are focused on building and protecting its strengths. The first one is an unorthodox model of management that is grounded in three principles. The first principle is a dynamic capability. This entails the ability of the company to develop, reconfigure, and integrate external and internal competencies with the objective of meeting the increasingly changing business environment. Google is one of the organizations that are continuously changing in terms of product and market diversification, for example, through the creation of new brands such as Google Ads, Ad Manager, and Analytics 360 Suite. A people-centric strategy is also a major principle that the company adopts. Google ensures that its employees have innovative power that ensures they contribute to the production of new products and services.

Strategies to Eradicate Weaknesses

Google has ensured that its operations are clear and open to address the challenge of dependency on secrecy. As one of the established technology companies in the world, Google undertakes its activities as required by the Tech Transparency Project, a research and information hub that seeks to make technology companies accountable. To deal with an ineffective business model that Google used initially, it now adopts a polyhedral business model. This model implies that stakeholders view the company differently. For example, Google ensures the users see free maps, free searchers, and free email and make a small fee for premium services such as cloud services and google earth features. The company sees a web site space like Google + and YouTube, where it can put ads. On the other hand, developers see an avenue through which they can expand their knowledge regarding Android applications and coding.

Strategies to Counter Threats

Product innovation has made Google counter the market threats that it faces from Amazon, Facebook, and Microsoft. The company has established the Google Art Project that provides an opportunity for its employees to provide ideas on new brands that Google produces. In addition, Google has established an internal feedback loop that ensures the management and employees identify vital areas of research that require more study. Effective marketing strategies have also made the company effectively deal with competitors. For example, Google adopts a value-based position technique with the objective of enhancing the lives of its customers.

Recommendable Strategy

The best strategy for Google is the expansion of its innovation. In 2016, the company launched the Pixel smartphones, but various companies have come up with similar products that are competitive(Savov, 2016). This implies that Google should invest more in innovation and establish research centers in developing countries. By establishing one research center in the politically-stable countries, Google will be able to meet the needs of the local market. The company can adopt the Frog Design. This design ensures that the employees and managers create solutions to address the problems faced by their organizations. The company should also undertake one-year training programs for new employees in order to improve the performance of employees, including their leadership and management skills.

Corporate Governance

Google’s corporate governance incorporates administrative procedures that govern the company. Google is committed to upholding the highest standards of governance and business conduct, as outlined in the Corporate Governance Guidelines and Principle. The firm belief that the guidelines are critical in running its business while serving the interests of the stakeholders and upholding integrity in its business operations. The firm has a horizontal structure of governance and the integration of functions. A board of directors manages the firm, and the president of the company serves as the chair of the board with separate roles from the chief executive officer (Alphabet, 2019). The president holds the highest rank in the organization and is assisted by a senior vice-president who also serves as the chief finance officer (CFO). Other senior positions of governance include the president of technology and the president of the production. The directors are responsible for the day-to-day running of the activities of the organization. The board is the highest decision-making organ of the organization. There are several committees, including the executive compensation committee that helps the directors in running the operations of the firm. Shareholders are the critical decision-makers, and they appoint the directors, approve audited accounts, and vote for or against a proposal.

The efficiency of Google’s corporate governance has made the firm experience exponential growth in most of its business processes, such as increased users, growth in advertisements, and more people prefer to use online means as opposed to face-to-face offline means. It has made a rapid impact on search technology, AI, and cloud networking. The governance structure has allowed the firm to make coordinated efforts that have resulted in aggressive ventures in strategic investments in many decisive products such as Chrome and android that have led to the success of the company in the field of technology.

Ethics

Google ethical values are outlined in the Google Code of Conduct is one way of putting the company’s values into practice. It has a broad set of values that ensures that the company attains the highest possible ethical standards in its business conduct. All stakeholders, especially the management and employees, are expected to adhere and share the values. They are also integrated into the company’s mission statement that encourages mutual trust and respect among the employees and end-users (Alphabet Investor Relations, 2020). Ethics are coined in the code of conduct and emphasize serving the users. Thus, employees are required to uphold integrity, privacy, and allow freedom of expression when serving the users. Ethical standards emphasize respect amongst all stakeholders and avoiding conflict of interest. Most importantly, employees are required to preserve the confidentiality of the user’s information and protect the assets of the firm. The standards require the employees to uphold financial integrity and abide by the legal requirements of the countries where the company operates.

Google’s commitment to the highest ethical standards has played a major role in its success as it has enabled the firm to hire and retain a great workforce, innovate great products, and attract many users. The ethical standards are tailored to serve the interests of the users, and this is the foundation of the company’s success. The code targets the board and the employees, but it also targets contractors and other external parties who may be assigned to work for Google. Failure to abide by the code of conduct may result in termination of work relationship.

References

Alphabet. (2019, April 30). 2019 Annual Meeting of Stockholders and Proxy statement. Retrieved from https://abc.xyz/investor/static/pdf/2019_alphabet_proxy_statement.pdf?cache=3ed6a89

Alphabet Investor Relations. (2020). Google Code of Conduct. Retrieved from https://abc.xyz/investor/other/google-code-of-conduct/

Case 19. Google in 2015.

Google Diversity Annual Report, 2019. Retrieved from https://static.googleusercontent.com/media/diversity.google/en//static/pdf/Google_diversity_annual_report_2019.pdf

Savov, V. (2016). Pixel’s phone by Google’ announced. Retrieved from https://www.theverge.com/2016/10/4/13161028/google-phone-announced-pixel-xl-price-release-date-specs