Goggle is classified under information communication technology which specialise in search engine with online advertising. It falls under the strategic group category of focused differentiator.
1 Porter’s five forces
1 Bargaining Power of Suppliers
The buying power of the suppliers is weak as Google can easily find alternative suppliers for their equipment like servers & data centres.
2 Bargaining Power of Buyers
The buying power of the buyers is strong as they have low switching cost to other rivals or to other forms of advertising like newspaper or television.
3 Threat of substitutes
The threats of substitutes of Google’s online advertising are newspaper advertising which is controlled the larger share of United States advertising dollars and the cable television, radio and network television which also controlled certain amount of shares in the market.
4 Rivalry within industry
The rivalries within industry are high as there are major competition between Google, Yahoo and Microsoft to gain the market share of the growing internet advertising market which is expected to growth to 36.5Billion in 2012.
5 Threat of New Entry
Even though the cost of new entry is low however The threat of new entry is weak as due the incumbency advantages of the three major rivals and the high demand benefits of scale which Google and other rivals would retaliated against new entry to maintain their market share of internet advertising.
2 PEST analysis
The effectiveness for business and strategic planning, marketing planning, business and product development and research reports can be seen through the usage of PEST analysis (e.g. Political, Economic, Sociological and Technological factors). PEST is useful when a company decides to enter its business operations into new markets and new countries. (Refer to appendix A).
1 Company’s strategy
The company’s strategy encompasses of Hambrick and Fredrickson, 2001’s five elements – arenas, vehicles, differentiators, staging and economic logic. The five elements in Appendix Y are the determinants of its current
2 Strengths and weaknesses of Google
2 Market dominance
With Google’s multiple acquisition and additional features like Google Maps and YouTube, it is now more dominant in the search-related Ads. With reference to the case, 65% of people chose Google as their primary search engine while their best competitor, Yahoo’s performance is only 19.6%. The company possesses a huge retained earnings and had proven to be profitable (3% growth in second quarter 2009) even in times of recession, when many other industries are suffering lapse of 25% or more.
1. High-end Technology
With Page-Rank technology to index most updated search results to its users, it
enables users to get hold of the most relevant pages first. It is also able to support
many different languages. Another critical technology is the company’s advertising tools; AdWords and AdSense, which generated most of the Google's revenue. Google
is also the leading company to move into cloud computing.
2. Good Brand Name
One of Google’s corporate philosophy principles is “earn money without doing evil”. Its search-engine gives the most relevant search results and only Ads that are related will be displayed. No one can influence to get higher ranking of the search results. The company had established their reputation without much effort in their marketing, it had gain its popularity mainly by word-of-mouth due to its reliability, speed and accuracy of searches. It had been classified as the top search-engine over the internet.
3. Lack of focus
Google had started venturing into other fields; desktops and mobile devices systems, Google earth, YouTube and even web browser. The company had...
References: Figure 1- Source: Hambrick D.C. and Fredrickson J. W.. (2001). Are you sure you have a strategy?. Academy of Management Executive. 15 (4), 48-58.
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