Google Case Analysis
HULT INTERNATIONAL BUSINESS SCHOOL
Google Inc.
Strategic Case Analysis
Fenway Cohort
Team 3
Nasrat Dernaika
Nikhil Srivastava
Kiet Long
Viktor Elkin
Jorge Vilaplana
March 28, 2012
Table of Contents
1.Google’s Early Key Success Factors 2
1.1 Innovated and Differentiated Search Engine 2
1.2 Innovated Advertising Ranking 2
1.3Expansion of Search-Related Advertising 2
2.Is Search A Winner-Take-All Business? 3
2.1 Multi homing costs 3
2.2 Strong network effect 3
2.3 Differentiated feature 3
3.Google’s Strategic Options: What is the Best? 4
1. Google’s Early Key Success Factors
1.1 Innovated and Differentiated Search Engine
By improving their existing search algorithm, Google resolved the problem of irrelevant listings –“Spam” that frustrated users. The “PageRank” Algorithm reliably delivered more relevant searches by favoring pages were referenced – “linked to”- by other pages. By taking this non-imitable initiative, Google differentiated their service and addressed:
Unmet needs of searchers: for faster,more efficient, and more relevant search results.
1.2 Innovated Advertising Ranking
Google innovated advertising ranking by weighing cost per click (CPC) bids by ratio of an advertisement´s actual click-through rate (CTR) to its expected CTR. By taking this initiative they pre-empted and fulfilled the users’ unmet needs:
Pre-emption: by developing the CTR model, Google exploited the first mover advantage. CTR model features were not supported by any of the search engines in the market.
Unmet needs:
• For Web Searchers: more accurate and relevant advertising hitscome first.
• For Advertisers: better information of customer preferences and ad visits, in addition to exposure to relevant audience. Therefore,increasingthe willingness to pay for advertisers.
In addition to meeting their customer’s needs, Google offered a better pricing than its competitors; offered lower Cost per Click at $0.30 compared to $0.40
Google Inc.
Strategic Case Analysis
Fenway Cohort
Team 3
Nasrat Dernaika
Nikhil Srivastava
Kiet Long
Viktor Elkin
Jorge Vilaplana
March 28, 2012
Table of Contents
1.Google’s Early Key Success Factors 2
1.1 Innovated and Differentiated Search Engine 2
1.2 Innovated Advertising Ranking 2
1.3Expansion of Search-Related Advertising 2
2.Is Search A Winner-Take-All Business? 3
2.1 Multi homing costs 3
2.2 Strong network effect 3
2.3 Differentiated feature 3
3.Google’s Strategic Options: What is the Best? 4
1. Google’s Early Key Success Factors
1.1 Innovated and Differentiated Search Engine
By improving their existing search algorithm, Google resolved the problem of irrelevant listings –“Spam” that frustrated users. The “PageRank” Algorithm reliably delivered more relevant searches by favoring pages were referenced – “linked to”- by other pages. By taking this non-imitable initiative, Google differentiated their service and addressed:
Unmet needs of searchers: for faster,more efficient, and more relevant search results.
1.2 Innovated Advertising Ranking
Google innovated advertising ranking by weighing cost per click (CPC) bids by ratio of an advertisement´s actual click-through rate (CTR) to its expected CTR. By taking this initiative they pre-empted and fulfilled the users’ unmet needs:
Pre-emption: by developing the CTR model, Google exploited the first mover advantage. CTR model features were not supported by any of the search engines in the market.
Unmet needs:
• For Web Searchers: more accurate and relevant advertising hitscome first.
• For Advertisers: better information of customer preferences and ad visits, in addition to exposure to relevant audience. Therefore,increasingthe willingness to pay for advertisers.
In addition to meeting their customer’s needs, Google offered a better pricing than its competitors; offered lower Cost per Click at $0.30 compared to $0.40