1) Discuss competition in the search engine industry. Which of the five competitive forces seems strongest? Weakest? What is your assessment of overall industry attractiveness?
Google constantly has to maneuver to improve their services, and stay ahead of other competitors. Google also faces low switching cost which increases rivalry among competitors: o Name recognition, image
o Services provided
o Relationship with Internet users, web sites, & advertisers o Relevancy of a search results
the entry barriers for the industry are higher than normal which reduces competition. High customer loyalty as well as high capital requirements also make it unlikely for new market entrants. The threat of additional entry is weak:
• The pool of likely entry candidates is small lowering the threat • The biggest potential threat is for new entry comes from existing online firms (like ISP providers) that expand technology and merge horizontally
Customers are also demanding more complexity with their search tools. The low switching cost in the industry make switching between search engines easy.
• Competing with internet portals & web publisher for advertising dollars
a) Power of Suppliers
• Computer components suppliers
b) Power of Buyers
. The technology that Google currently has should enable it to adapt to software updates. Buyers Strong: • Advertisers
• Web publishers licensing the search engine
• Telephone companies
The expansion of the Chinese market for search-based advertising will also stem more rivalry between Google and Baidu in upcoming years. The search industry overall is an attractive industry for companies that can overcome the entry barrier. The amount of internet advertising is constantly growing and advances in technology allow forward thinking companies to thrive. It is easy for companies to attract people since customers can switch from engine to engine without any costs.
2) How is the search industry changing? What forces seem most likely to bring about major change to the industry within the next three to five years?
Web based document and spreadsheet application, its Picasa Web photo albums and a translation feature that accommodated with fifty one languages variety. Also that, the Google also enhances their services by released out service for mobile phone such as Mobile, Gmail, Google News and Maps for Mobile. It’s shown that, the Google Company had introduced the highly integrated services of technology that was highly demanded by all users over the world.
Forces that most likely to bring about major change to the industry within the next three to five years is the company’s revenue and earnings growth had begun to slow in recent years and the sluggish U.S economy seemed unlikely to give Google a dramatic boost in revenues in 2010. It remained to be determined if Google’s strategies could sustain its growth and stock performance in a manner that would adhere to the company founder’s early belief
3) What are the key factors that define success in the industry? What are the key competencies, capabilities, and resources of successful search engine companies?
A company must also well-respect. It is easier to keep a customer then to obtain a new one. Therefore, search engine sites must remain well respected by all user and potential users. Google has sustained their respect by never forgetting who made them into who they are today. They pride themselves on their sense of community and continually create value added services for their users.
1. Growing use of internet
Everyday more people are becoming users of the internet. Especially in Asia and Europe, the Internet is more accessible than ever before. This is a driving force for the online search engine industry because it creates new users and advertisers around the world.
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