Google in China

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Executive Summary

Rarely do potentially momentous business decisions get made without a significant amount of debate, consideration, and in some cases, compromise. This is precisely the case in Google’s decision to not only open a product research and development centre in China, but also to revitalize its web search engine’s Chinese presence through launching Google.cn. In launching this new site, Google made the difficult decision to compromise on its mission of providing open and free access to information, in favour of increasing user satisfaction. Essentially, though searches are easier and more streamlined through Google.cn, items that would have previous been blocked by the Chinese government on Google.com are now “self-censored” by Google itself. Thus, the decision was made to comply with Chinese policies, and from this, Google faced large-scale criticism that it was actively participating in the suppression of free speech. Faced with this dilemma, Google has hired Navigator Consulting to help determine its next steps coming from this decision. In this report we begin by identifying the key issues that Google must consider before identifying a direction. These issues particularly surround balancing Google’s socially responsible reputation with its commercial interests of expansion and profit. This balance must be achieved, while also ensuring that Google maintains a competitive edge with both primary rivals (Yahoo!, Microsoft), and domestic Chinese rivals (Baidu). Following this we analyze these issues using a SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis, a PEST (Political, Economic, Socio-cultural, and Technological) Analysis, and a Porter’s Five Forces Analysis to assess over-all industry attractiveness. Prior to these, we ensure to set out the relative importance and urgency of each issue that Google must consider, with Corporate Social Responsibility and Shareholder Profit ranking high in both importance and urgency. Recommendations are then made for Google to consider as they go forward from this decision. Despite facing criticism, Google should remain in the Chinese market, functioning and developing as was intended prior to any reservations felt upon facing negative public opinion. Google’s motto is “Do No Evil,” and we wholeheartedly feel that in this circumstance Google has done no evil. Instead Google has committed itself to a competitive advantage through increasing Chinese user satisfaction and opening new R&D and product development opportunities. More importantly, Google has also established itself as a potential catalyst for making further inroads in increasing freedom of expression in China. From this, steps for the resolution of this issue and the implementation of recommendations are suggested for both the short and long term. In the short-term, Google is primarily concerned with managing the negative public opinion through producing a solid media message and pursuing a dialogue with its critics. From this dialogue should come tangible outcomes for mitigating its impact in the Chinese market and working towards future reforms in Chinese freedom of expression. In the long-term, Google, should continue working towards these reforms, continue working to satisfy its new Chinese user market, and over-all, continue producing the same high-quality, innovative products and services that has established it as an icon in the digital age.

Key Issues

1) Shareholders Profit
a. Corporate Expansion
2) Corporate Social Responsibility
3) Competition
4) Reputation
5) Research & Development
As the case is extensively studied, our panel felt that the aforementioned issues were important for Google to succeed globally. Discussion for each issue is presented below. -------------------------------------------------

Share Holders Profit

Press Release: Accepting Chinese govt. restrictions

Figure 1. The plot shows Google Share...
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