Google Inc.
Introduction
In this document, assessment of the strategies of a SEC listed company “Google Inc.” is conducted. It briefly explains the impact of its mission, vision and stakeholders on the company’s success. Also, it critically reviews the potential strengths, weaknesses, and threats that the company encounters, suggesting different types of strategy that the company can adapt to improve its competitiveness and profitability. It concludes with a communication plan for the strategies and corporate governance mechanism that Google Inc. should adopt to control managerial actions recommended in this document.
1. Company Overview
Google Inc is one of the leading companies that are regularly engaged in the developing, designing and promoting its image as a conventional company that could enhance its innovation in search and advertisement using website widely. The website of Google Inc. highlights that the mission of the company “is to organize the world’s information and make it universally accessible and useful” (Annual Report: Google Inc., 2015). It can be identified that the company has constantly been focusing on managing information system across the world and managing brands and adopting innovative strategies to develop new products. The vision of the company is “to provide access to the world’s information in one click” (Annual Report: Google Inc, 2015). It directs that the company is constantly engaged in improving its position in the industry through manifesting developing popular products using search engine service. The most influential stakeholders of the company are its shareholders and consumer. Since the company manages information across the globe, the most affected stakeholders are its consumers.
2. Five forces
Power of buyer – High
The power of buyers in the case of Google Inc. is high. It is because the buyers of Google Inc are the users of website engine. The buyers exert high pressure on the company because of their preference to make use of search engine. The more the users are trafficked at the websites generates higher profits that increase the elasticity of demand for the product and service being provided.
Power of Suppliers – Low
Although Google manages information that is provided by different companies, users, and websites, there are multiple providers for information that makes the bargaining power of supplier (Deloitte, 2014). Also, Google maintains strong market dominance that eventually decreases the power of suppliers. The ad system utilized by Google Inc. is the main source of revenues for the company channelized through innovation such as Android phone system and other means that make suppliers power low.
In the past few years, it can be noted that the rivalry in the industry has significantly increased. It has created pressure on the company to improve its positioning in the industry (Deloitte, 2014). It is because of the optimized system, technology, software and products that Google Inc. needs to develop more to deal with the competition in the industry. It has created pressure on existing competitors to develop upgraded system, products and software to facilitate customers supporting different operating system.
Threat of Substitution - Low
Internet and search engines have become primary source to provide information to users. There is particular no substitute for the search engines like Google, MSN, Bing and Yahoo on the Internet. Hence, it makes the threat of substitution low in the industry (Deloitte, 2014).
New Entrants – High
The threat of new entrants in the industry is high. The new entrants are also developing new firms to enhance market position through increasing capacity (Deloitte, 2014). However, there are no barriers in the industry and low capital requirement that makes it attractive for new entrants. But with the passage of time, the revenues would increase at a faster pace that makes it attractive for investors.
3. SWOT analysis
Strengths
Google Inc. has dominant capacity to store information related to web search, video content, online advertisement, mobile OS and another browser usage. It has the strong relationship and affiliation with the leading Internet markets for its operation. Also, it has strong recognition and online advertising platform to generate revenues for business (Deloitte, 2014). It has strong brand awareness and power over customers, competitors, and suppliers because of its effective search engine design.
Weakness
One of the great weaknesses of Google is its overdependence on revenues it generates from search engines that make it heavily dependent. Also, there are different search engines that have replaced it such as Google, Yahoo and other default search engines for browsing and market share. The earnings of the company can be manipulated because the company gives too much to its employees. Much of the market share of the company is dependent on equity that increases the pressure of its stakeholders.
Opportunities
Google Inc. is a leading company has highly skilled employees. The company has greater potential to expand its product portfolio through finding innovate Internet market to sell its products and attract more customers. The company can also develop partnership and relation to expanding in different countries to correspondent with technological change and improve channels from business growth. The company can expand its usage through developing interactive mediums using Google fiber to improve the user experience.
Threats
There are potential threats that the company is exposed to that Google needs to reduce. There is increasing competition in the industry that is diverting traffic of user that can lead to the decline in the revenues that the company is generating from online advertisement and clicks. There is the imitation of the products, which are easier for other competitors to do that can decline the attractiveness, and performance of Google Inc.
4. Strategy to overcome weakness
5. Types and level of Strategies
Product differentiation and horizontal integration are the core strategies that Google Inc should adopt to increases it competitiveness and profitability in the industry. Product differentiation remains to be most effective and attractive mean for users. The more the search engines and use of the Internet are in reach of customers it is more preferred for customers. Google Inc can bring changes in its existing search engines through making the searches more attractive and quick assessing SEOs. Also, Google Inc. can strengthen its positioning in the industry through acquiring new/emerging local search engines in different countries. Developing and strengthening the relationship with Android, OS, Windows and other mobile software would improve integration of Google. Strategically investing with local partners in different countries through implementing regionalized strategies the firm can develop the relationship with the local service providers to improve its positioning in the industry. It will expand the capacity of Google Inc as well increase its presence in the market. Google Inc. needs to bring adequate changes and amendment in its existing systems, product range and software to make it attractive for customers. It should focus more on the issues related to privacy and confidentially to ensure that the designs for customers are controlled and secure. Hence, it requires the extensive focus on research and development so focus on these areas and find innovate ways for the company to sustain its edge in the industry.
6. Communication plans to communicate strategies to its stakeholders
a. Developing communication objectives
b. Tell about the key message that the organization is about to implement
c. Brief priorities of the new strategy to stakeholders
d. Make use of the Internet and other physical communication means to communicate the key message to each of key stakeholders. It should be done through the initiating meeting, broadcasting news, emails and communicating through forums to tell about the new strategy
e. Allocate the budget as well as responsibilities regarding the new strategy
f. Take the assessment of the communication and feedback regarding the strategy
g. Evaluate the results and impact on the organization performance conducting thorough market research.
7. Corporate governance mechanism for managerial actions
For implementing the proposed strategy, it is important that the firms should ensure the principle of transparency. The information regarding the benefits and potential drawbacks to the strategies should be well communicated as well as the discussion related to budgets and resource allocation should be well explained (Rezaee, 2009). The flow of communication and providing mediums to communicate should be prioritized by the organization to promote two ways of communication (Rezaee, 2009). Also, it is important to take adequate steps to evaluate the results and outcomes which should be critically assessed, and necessary steps should be taken regarding sustainable costs that may be incurred during the executing process or later phase (Vermeulen & Curseu, 2011).
The other primary governance mechanism for the managerial actions that should be undertaken is its ethical conduct to deal with the organizational behavior. The management should strictly control, manage and regulate the action in accordance with shareholders interest. It should be ensured that the interest of shareholders is not being violated (Rezaee, 2009). Therefore, it is important to deploy policies to support managerial actions by assessing past performance (Rezaee, 2009). Also, it is equally important for the firm to manage governance mechanism aligning its administrative activities addressing stakeholders interest to maximize is profits and shareholder value (Rezaee, 2009).
References
Annual Report: Google Inc. (2015). New York: Google.
Deloitte. (2014). Tech Trends 2013 Elements of postdigital. Washington DC: Deloitte.
Rezaee, Z. (2009). Corporate Governance and Ethics. New York: John Wiley & Sons.
Vermeulen, P. A., & Curseu, P. L. (2011). Entrepreneurial Strategic Decision-making: A Cognitive Perspective. New York: Edward Algar Publishing.
Weiss, J. W. (2014). Business Ethics: A Stakeholder and Issues Management Approach (6th ed.). San Franciso: Berrett Koehler.
