Long Case Study – Case #12
Google’s Strategy in 2010
Google’s mission statement is: “Our mission is to organize the world’s information and make it universally accessible and useful.”
The biggest management issues that we could see in this case were that Google’s management was pushing too hard its employees to keep its huge growth rates and forgot a little bit about its initial motto, which was “make money without doing evil”. Also, it was proved that Google helped the Chinese government to censor search results, which were critizing the government. It was also collecting personal data from Wi-Fi networks while it was photographing the streets for its Google Street view application and there was also an investigation about Google’s lobbying trying to make the government institute a “Net neutrality” that would ask from Internet providers to manage traffic without restricting high-bandwidth services like Internet TV. All those issues happened after the IPO and the inclusion of different shareholders, which might be the reason why Google moved so far away from its motto. Some of these issues were solved like the one with the Chinese government by presenting a link to Google.com.hk on Google.cn so the users could access an uncensored website and Google could keep good relationships with China. About the data collection, Google is faces paying billions of dollars in this affair but the trial is still ongoing. Also, with so many different projects going on, another management issue could have been setting up priorities so the management created the 70/20/10 rule. Seventy percent of the engineering time was spent on the core business (web search and paid listing), twenty percent on projects to extend the core like Gmail and ten percent to create new businesses.
answered those complaints in an interview on CNBC and said: “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.” Maybe nit the best to talk to your customers…
So those issues made the company lose money in 2009 along with the financial crisis of course but more importantly, made the company lose credibility in the eyes of the customers and damaged its brand image, which is more critical than losing money as the way customers perceive you is the basis of rather or not they will use your product or service.
Competitive advantage: Google core business is as we said, advertising and web search. In terms of competitive advantage, they serve each other. One of Google’s competitive advantages is its spider search software and its link analysis algorithm PageRank, which measures the probability that the page will be relevant to the user’s query.
Another competitive advantage is the refinement of its advertising model. It is indeed effective to the user and to the advertiser (AdSense, revenue splits). Finally, reputation is one of its biggest competitive advantages. Indeed some of its technology has been matched and its competitors make also a significant investment in R&D.
Google’s success is sustainable if their innovation rate and effectiveness continue to grow. The more it develops its services and refines the targeting; advertising will continue to provide the majority of its revenue.
Google had gross revenues of $21.2 billion and an operating...
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