Google Inc. in 2014 – Case Analysis
Q1: How did Google create a competitive advantage initially (before 2004)? Google’s competitive advantage prior to 2004 was based on exploiting their capabilities. Through their company culture, core values, and skilled work force Google created an environment that fostered and generated constant innovation in technology. This innovation allowed their highly skilled engineers to continually capitalize on what was happening/missing in the marketplace by improving based on unmet consumer needs. Due to Google’s capabilities, they were able to add value to technologies already in the marketplace by observing what wasn’t being delivered by the competition. Below is on outline of the innovations launched prior to 2004 that placed Google ahead of the competition: 1998 Google launched their PageRank algorithm in response to consumer frustration caused by other search engines returning irrelevant listings. Google continued to focus on algorithmic search and sustained a competitive advantage in this area, as competitors were not able to copy or improve upon their technology; in fact, Google licensed its search technology to Yahoo! and replaced Inktomi as Yahoo!’s search engine. 1999 Google launched their version of paid listings, improving upon Overture’s model. Instead of having advertisers bid on keywords to determine the order of ads and then charging the advertiser based on a per-click basis, Google weighted the ads using actual click-through rate and expected click-through rate. By assigning a weight to the ads, the most relevant ones were placed in prominent positions, which were better for the user and for the advertisers, thus impacting the revenue stream positively and creating a positive network effect. 2003 Google launched “contextual” paid listings, which related advertisements to a users search. Advertisers benefited from this as their product was shown to consumers with a real potential interest in purchase. With...
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