Problem Statement for Strategic Management Case : Google

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HEAVILY RELY ON ADVERTISING INCOME AND DECLINING GROWTH RATE.

Google had experienced remarkable revenue growth in the past six years as evidenced by its financial statement. Google is having solitary income where the biggest revenue came from advertising that represent 97 % percent of total income of the company and only 3 % from other sources. This is putting the company at risk when there is any blockage from advertising such as intellectual properties right being compromised, government pressure to filter the content and any other issue will disrupt the company’s revenue. It also will have negative impact on the growth rate of the company.

Google has been consistently acquiring other that serves as venues for its advertising market, such as Blogger and YouTube. There were also some indications that acquisitions might become an increasingly difficult strategy in the future. In 2010, Google failed in an attempt to purchase Groupon and Yelp that distort Google plan to become an internet conglomerate and provide broaden option to enlarge the advertising market.

Decline trend in personnel computers and uptrend of mobile computing also play a major impact in determining Google growth. Google has to broaden up more services/product offering towards mobile computing rather than personnel computers or else they will be outpaced by other competitors.

Google’s management also recognized that future revenue growth may soon decrease due to stronger direct and indirect competitions, the developing maturity of the online advertising market, and the growing size of the firm. This could be tightened further by lower profit margins on revenue received from Google Network Members.
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