Globalization can be defined as the integration of the world economies by allowing free movement of trade, technology and people (Daniel et al, 2009). Furthermore, the developments in technology are perceived as a driving force of globalisation (Denton & Al-Shamali 2000). This tends to be identified and observable in every day to day activity primarily due to the emergence of internet technology. The internet is globally integrating and merging the different nations of the world. The impact of the internet cannot be over emphasized; it has provided a common base upon which countries from the entire world are able to communicate and share information leading to a wide spread of values, culture and trade (Luthans and Doh, 2009). The impact of the internet technology on globalization includes the globalization expansion and improvement in the business strategies (Luthans and Doh, 2009. Google incorporated (inc.) which was formed in 1998 view the internet as a means for sharing the entire world’s data and to allow users a simple and quick mechanism to access this data. Its primary function is organising the world's information and making it universally accessible (www.google inc.com)
This article will analyze the global strategy of Google Inc’s. subsidiary in the Chinese market. It will also examine the set backs of Google, a multinational company (MNC) faced in entering China, in terms of government policy and cultural differences on its strategy. The first section briefly discuses a literature review of the integrated responsiveness (IR) framework which is used in the analysis of the international strategy of the company. This frame work was adopted in the analysis of Google because it is foundation for international strategy and also to examine the extent to which Google responded to the Chinese market. The second section will analyse Google as it carries out its international strategy in the Chinese market, while the third section focuses on the competitor analysis of other MNC’s in the internet search engine industry in China by comparing market share, customer satisfaction and company activities. Hence, recommendations will then be suggested to improve the internalisation strategy of Google in China. Google China was chosen for this article because of its recent threat to withdraw its operation from the Chinese market due the government censorship policy which is in conflict with Google’s mission and motto (Skynews.com)
The integration-responsiveness framework has long been used in the analysis of international firms in foreign markets. Prahalad (1975), Doz (1976), and Prahalad and Doz (1987) designed the basis for the extensive research on international strategy. Giving a different view to international strategy, the main concept of the I-R framework is that companies operating internationally should be able to meet up with the need to respond to local demands and pressures imposed by government or consumers and at the same time exploit the market opportunities due to firms’ multiple country locations (Roth and Morrison, 1990). The core idea of integration is to exploit the benefits of across national border, while responsiveness concerns the need for local customization and adaptation, and the two factors work in opposite directions (Benito, 2005).
The Global integration and local responsiveness (GI-LR) model The GI-LR model is a conceptual framework for analyzing strategy in the international business of firms. Roth and Morrison (1990, p. 543) suggests that “in considering business as the unit of analysis, the integration-responsiveness (IR) framework has been suggested as a model for “mapping” or distinguishing international business strategies”. This model was developed from early studies of the “I-R” model by Doz and Prahalad, 1991; Prahalad, 1975; Barlett and Ghosal, 1989; Prahalad and Doz, 1987). Based on the assumption that business managers tend to share different...