Google Analysis and Recommendations

free essayGoogle Inc. is one of the largest companies in the world that provides search engine services. The company is technology-based and is well-known for providing a large website index for its customers as well as other online contents for the disposal of its loyal online users. Google organizes the world’s information to make sure that it is easily accessible and can be used by the end customers. Google’s operates in the Internet and social media industry. The Porter’s five forces framework helps to assess the attractiveness of the industry determining the forces that affect the success of a company in the industry market.

Industry Analysis

A company can be successful in the industry that it operates in by differentiating its products and making sure that its products are unique or outperform those of the competitors. The five forces framework can enable a company to succeed in the market through the determination of all the existing competitive forces and pressures. The assessment of risks and possibilities will help the company to develop effective methods of attaining sustainable competitive advantage.

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  • New entrants

The threat of new entrants is what determines how hard it is for a company to introduce its operations into the current market. At the same time, the threat posed by the new entrants into the internet and social media industry is moderate and is most likely to increase in the future due to the increase in the number of players in the industry. It caused by the low capital requirements to the new firms having the intention to enter the market thus changing the game rules and reducing the market share of other companies. The new entrants into the industry drive the product prices downwards, which can affect the profitability of the existing players.

  • Suppliers

The supplier’s power is what determines how easy or difficult it is for the buyers to influence the prices. The supplier’s purchasing power in the internet and social media industry is low and is mostly likely to remain the same in the future. This situation is caused by the fact that there exist a large number of available suppliers and thus a high supplier availability, which presents a weak force of Google as they cannot threaten to increase the prices or reduce the quality of the products. It minimizes the bargaining power of the individual suppliers of the company because Google has the option of switching from one supplier to the other. The suppliers are very numerous and diverse due to the huge diversification of the company’s products

  • Customers

The purchasing power of the customers means how easy or difficult it is for the buyers/customers to influence the prices down, which can affect and influence the business operations of a company. The customer’s purchasing power in the internet and social media industry is low and is mostly likely to decrease in the future. The small size of the individual customers and the high demand from the customers present a weak force for Google because every customer only contributes to a small amount of revenue to the company, and the increasing demand for Google’s products has a very minimal influence on the company.

  • Substitutes

Substitute threat is the likelihood that a customer can switch to using similar products. The threat of the substitutes in the internet and social media industry is moderate and is also most likely to remain the same in the future of the industry. It is because there are zero switching costs involved. The customers can switch from one company’s products or services to the products or services of its competitors without having to incur any costs but, at the same time, get the same satisfaction from the substitute products. The high availability of substitutes and the low cost of switching present a moderate force for Google’s business. The presence of substitutes causes a splitting of the market share among the competing companies and forcing the companies to work towards improved quality.

  • Rivalry

Rivalry is the total number of available competitor companies offering the same or similar product at the same price. Rivalry in the internet and social media industry is very high and is most likely to increase in the future due to a large number of companies entering the industry, high number of companies offering similar products at low prices, and the low switching costs, which present a very strong force for Google. This intense rivalry causes stiff price competition, product differentiation, and extensive marketing promotions. Google is still considered to be the strongest player in the industry, although there are other companies like, Apple, Yahoo, Facebook Inc., and MSN, which pose high competitive danger for Google, as well as other companies like Ask.com, which is a still weak competitor but might be getting stronger in the future. To maintain a competitive advantage over its close competitors, meet the needs of all of its customers and reach out to the prospective clients, Google offers a diverse range of products to its customers, such as the Google’s driverless car, Google Fiber, Google Glass among others, as compared to other companies.

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Industry Attractiveness

This industry can be considered attractive for the business. It can be explained by the fact that there is a moderate threat to new market players and substitutes, as well as weak suppliers’ and buyers’ purchasing powers. The main factor that makes this industry attractive for the companies is the rapid increase in the number of customers/users due to technology advancement. More and more people can access the Internet, and most of the companies in the world have also adopted the use of the Internet in their productions and services. Thus, these factors cause an increase in the clientele numbers, which indicates a very favorable and attractive profit outlook. Low start-up capital requirements, high growth prospects, and low entry barriers make the industry a perfect option for the new venture companies. Also, the internet and social media industry is very attractive for Google because of its weak suppliers’ and buyers’ purchasing powers. Google has a strong potential for sustainable profitability because as compared to the other competing companies, it offers a wide range of products meant to meet all the needs and wants of the customers. It proves that the company has the potential to penetrate the market more with its wide range of products.

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Google Company Analysis (Positioning)

Positioning Strategy

Google is trying to achieve a broad differentiation strategy because it aims at providing high-quality products and services to its customers and outweigh its competitors. Besides, Google has focused on the creation of unique products as the company is expanding into other spheres like the driverless car production. Google is focused on the provision of diverse products to gain a large customer base, although the external environment risks are higher due to the costs that could be incurred in the production and the wide variety of diverse products.

SWOT Analysis

Internal aspects (Strengths & Weaknesses)
Strengths:

·         Strong brand image

·         Innovation culture

·         Product integration

·         Product diversification

·         High internet access to users worldwide

·         Financial stability

·         Quality customer experience

·         Open source products

·         Loyal employees

Weaknesses:

·         Unprofitable products

·         A limited source of income (only one)

·         Dependent on the Internet

·         Limited or minimal physical presence

Opportunities:

·         More tapping on mobile users

·         Google Fiber penetration

·         Driverless electronic cars

·         Expansion into electronics industry

·         Patent acquisition

Threats:

·         Product imitation

·         Intense competition

External aspects (Opportunities & Threats)

How It Works

Strengths

  • Strong brand image – Google has a very strong brand image, which could enable the company to fight off any form of competition in the industry.
  • Innovation culture – Google offers a new variety of unique and innovative products to suit the needs of the customers, which gives the company a competitive advantage.
  • Product integration – All Google’s products are directly integrated with each other making it easier for the customers to use and access them. Moreover, no other competitor offers the same integration services, which gives the company a competitive edge.
  • Product diversification – the diversification of Google’s products shows that the company is growing and expanding, which is a demonstration of its successful.
  • High access to the Internet users worldwide – Google has a high access to a large number of people who have access to the Internet with a majority of them accessing the internet via phones and the rest using office and desktop computers. It can represent a large market share as the products can reach the customers easily and quickly.
  • Financial situation – Google is a very profitable company in the world, which makes only a few competing companies to be strong enough financially to be able to compete with Google.
  • Quality customer experience – Google offers quality products that are mainly aimed at customer satisfaction through offering excellent customer experience.
  • Open source services and products – the mission of the company is to make sure that it makes information available to the users. Openness is what makes Google a leader in the industry since the majority of the OS on almost all devices can access the products and services offered by the company.
  • Loyal employees – the company has loyal, skilled and experienced employees who are determined to make the company as profitable as it can be.

Weaknesses

  • Unprofitable products – Google has a large number of products that are non-profitable as they add very little value to the profitability levels of the company.
  • Limited source of income (only one) – Google relies heavily only on one source of income which is online advertising. It shows that Google has to put efforts to push competition as it can lose the income source if the competition levels become extremely high.
  • Dependent on the Internet – Google depends only on the Internet coverage. It becomes a weakness because the company has to wait for the developing countries to develop in their internet coverage before the company can expand its operations to these destinations.
  • Limited or minimal physical presence – Google depends on online business only, which makes it weak compared to the other competing firms with a physical presence like Apple.

Opportunities

  • More tapping on mobile users – Google could create a platform to enable better display ads and promotions for mobile phone users, which would lead to income increment.
  • Google Fiber penetration – the Google Fiber offers the company a fast growth opportunity as there would be no competition thus giving the company an added advantage over the competitors.
  • Driverless electronic cars – Google could sell licenses to automobile manufactures to build the cars using their IP and technology, which could be a very big technological step for the company.
  • Expansion into electronics industry – Google could introduce more electronics products according to the consumer needs and increase its market share, which would help in the integration of the company’s software products and raising income.
  • Patent acquisition – Google could expand its market share through obtaining of patents from companies. It would have a solid patent portfolio though acquisitions.

Threats

  • Product imitation – other companies can imitate its products. It may make the consumers opt for the cheaper imitated products.
  • Intense competition – there is intense competition from companies like Apple, Microsoft, Facebook and other which are posing a significant threat to Google.

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Grand Strategy

Google uses a growth strategy. It aims at supplying quality products and their constant diversification, which shows that the main emphasis of the company is on expansion and growth. Google focuses on customer satisfaction through human talents that the company uses to expand its product and services diversification. This strategy has enabled the company to be able to satisfy all the customer needs, for instance, through offering innovative and various products so as to meet the needs of the different customer segments, an increased market share, as well as employee retention.

Recommendation

Google has many growth opportunities at its disposal as compared to the number of threats facing the company. It is because the company’s growth rate in the market has increased and is mostly likely to be increasing in the future. Based on the company’s opportunities and threats, the company should put more efforts to overcome the threats of imitation and competition being faced and take advantage of the opportunities at its disposal so as to obtain a larger market share. The grand strategy that I would suggest for Google is the growth strategy because the company operates in a growing industry. This strategy could provide the company with increased control over all the competitors in the industry because the patent acquisitions, which are an opportunity for the company, could offer increased economies of scale. This strategy is optimal for Google because it could help the company to increase its market share due to the widened clientele base as a result of product diversification.