1. Discuss competition in the search industry. Which of the five competitive forces seem strongest? weakest? What is your assessment of overall industry attractiveness? Competition in the search industry is high. There are several search engines available, albeit Google holds the top percentage. Some of Google’s opposing forces are Yahoo!, Bing, and MSN search. The strongest is competitive rivalry and the weakest is buyer power. There is a big rivalry amongst search engines in gaining the newest advances and best technology to suit the customer. Buyer power is weak because there is no substitute for an online search engine. You could use an encyclopedia or something of that nature, but with online search engines, information is available instantly and up-to-date. If a company can get past the barriers to entry, there is a high industry attractiveness. With advertisements being the main source of profit for search engines, a company could gain considerable profit margins with good advertisements and a mediocre search engine.
2. How is the search industry changing? What forces seem most likely to bring about major change to the industry within the next three to five years? Cloud computing technologies are one of the trends which will have a big impact on software market. Google is a big player in this field. Microsoft has identified this as a big threat to their business. The second trend in this industry is rising competition in mobile search/advertising and the importance of social networks.
3. What are the key factors that define success in the industry? What are the key resources and capabilities required of successful search engine companies? How do these compare to the key success factors of the smartphone industry? Key factors of search engine industry success are: Consumer demand for innovative and interoperable products or services; net neutrality; improved search algorithms (fast, accurate, impartial and easy to use); awareness of convergence in media, internet, broadcast and entertainment; trust (user security, privacy concerns and protections); awareness of user habits and needs (supply solutions to anticipate and meet needs). Google core competencies are: Constant Innovation of search algorithms; impartial algorithms used to rank data weight; open transparent organizational culture; policies: Implement, then monetize; People-Profit; corporate Reputation = Brand Trust; back net-neutrality interoperability + open source. Google, Yahoo, and Microsoft have both similar and dissimilar capabilities: All are financially sound; in fact, they all have the financial clout to afford large acquisitions, or to invest significant financial resources in a R&D; all are global; all are household names. Currently, Yahoo and Microsoft must reassess their resources and capabilities to decide how to deploy them most effectively. In reality, they must leverage their current resources to develop new capabilities if they hope to compete with Google for the consumers. Google has an advantage in efficient organization of information. By means of using an unbiased algorithm to rank data relevancy, Google’s impartial search algorithm is also the key to its popularity, because Google users have a greater level of trust. Yahoo has a number of social networks and content advantage. Microsoft’s advantage resides in their long reign of global market dominance in business by means of their market share of computer software and operating systems, although they also face risks from this due to global anti-trust issues.
4. Describe Google’s customer value proposition and profit formula linked to its business model. What strategies has Google relied upon to build competitive advantage in the industry? Google business model generates revenue by providing advertisers with an opportunity to deliver online advertising, directly matched by keyword to a user’s search query. Google business model...
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