Google's Strategy in 2010
Case 12: Google’s Strategy in 2010
What is Google’s business model? The answer is complex because it makes up of lots of different factors. The top 10 principles of Google’s corporate philosophy is what keeps them doing what they do best. (Gamble, 2010, pg. C-175).
1. Focus on the user and all else will follow.
2. It’s best to do one thing really, really well.
3. Fast is better than slow.
4. Democracy on the web works.
5. You don’t need to be at your desk to need an answer.
6. You can make money without doing evil.
7. There’s always more information out there.
8. The need for information crosses all borders.
9. You can be serious without a suit.
10. Great just isn’t good enough.
Their mission statement is to organize the world’s information and make it universally accessible and useful. (www.google.com). These 10 principles have helped them achieve their goal within their mission statement. Google has kept it simple but efficient. These 10 principles have guided them from the beginning and it has work. They don’t need to fix something that is not broken.
Examine the financial reports in the case to determine the company’s profitability, liquidity, leverage and activity ratios. Based on these ratios what is your assessment of the company’s performance? Justify your answer?
Profitability ratios are measures of performance that indicate what the firm is earning on its sales or assets or equity. There are the operating profit margin, net profit margin, return on total assets, return on equity, and basic earning power ratios. (Mayo, 2007). Operating profit margin = Earnings before interest and taxes/Sales 8,381,189/23,650,563 = 35.4% Net profit margin = Earnings after interest and taxes/Sales 6,520,448/23,650,563 = 27.5% Return on total assets = Earnings after interest and taxes/Total assets 6,520,448/40,496,778 = 16.1% Return on equity = Earnings after interest and taxes/Equity 6,520,448/36,004,224 = 18.1% Basic
What is Google’s business model? The answer is complex because it makes up of lots of different factors. The top 10 principles of Google’s corporate philosophy is what keeps them doing what they do best. (Gamble, 2010, pg. C-175).
1. Focus on the user and all else will follow.
2. It’s best to do one thing really, really well.
3. Fast is better than slow.
4. Democracy on the web works.
5. You don’t need to be at your desk to need an answer.
6. You can make money without doing evil.
7. There’s always more information out there.
8. The need for information crosses all borders.
9. You can be serious without a suit.
10. Great just isn’t good enough.
Their mission statement is to organize the world’s information and make it universally accessible and useful. (www.google.com). These 10 principles have helped them achieve their goal within their mission statement. Google has kept it simple but efficient. These 10 principles have guided them from the beginning and it has work. They don’t need to fix something that is not broken.
Examine the financial reports in the case to determine the company’s profitability, liquidity, leverage and activity ratios. Based on these ratios what is your assessment of the company’s performance? Justify your answer?
Profitability ratios are measures of performance that indicate what the firm is earning on its sales or assets or equity. There are the operating profit margin, net profit margin, return on total assets, return on equity, and basic earning power ratios. (Mayo, 2007). Operating profit margin = Earnings before interest and taxes/Sales 8,381,189/23,650,563 = 35.4% Net profit margin = Earnings after interest and taxes/Sales 6,520,448/23,650,563 = 27.5% Return on total assets = Earnings after interest and taxes/Total assets 6,520,448/40,496,778 = 16.1% Return on equity = Earnings after interest and taxes/Equity 6,520,448/36,004,224 = 18.1% Basic
References: Lohr, S. (July, 7, 2008). The New York Times. Google, Zen Master of the Market. Retrieved on April 11, 2012 from http://www.nytimes.com/2008/07/07/technology/07google.html?pagewanted=1&_r=1. Mayo, H. (2007). Basic Finance: An Introduction to Financial Institutions, Investments & Management: 9 Edition. Thomson: United States. Morrow, B. (Feb. 22. 2009). Internal Analysis of Google Inc. Retrieved on April 11, 2012 from http://www.benmorrow.info/research/internal-analysis-of-google-inc/. Thomson A., Peteraf, M., Gamble, J., & Strickland, A.J. ( 2012). Crafting & Executing Strategy. McGraw-Hill.