...Strategic Management Professor: February 6, 2014 Executive Summary The origin of the name Google might explain the excess in capture of vast business verticals by Google’s internet and technology services. ‘Founders Larry Page and Sergey Brin named the search engine they built "Google," a play on the word "googol," the mathematical term for a 1 followed by 100 zeros’ (Bhatia, 2012). Through our strategic analysis of Google Inc. we provide for a discussion on profitability of Google. Based on competitive advantage, strategic management and the Five-force model of competitive forces, we better understand the nature and strength of competitive pressures within the internet and technology industry. Google must remain a differentiator among competitors to retain market share. The evolution of “search” capabilities on the internet has been the driving force from the beginning. In 2012 Google is the leading search firm with nearly ‘67% market share in search from home and work and 95% market share performed from mobile devices’ (Thompson, et al, 2013). For Google to remain profitable is to focus on the key business model that is still driving hard revenue and to reach into those verticals that are working, while leaving the losers behind. In the year of 2012 Google captured 67% of search in the U.S., with 29% of the balance going to Yahoo and Microsoft. Advertising revenues from search drove over $36 billion of $37 billion total net revenues in 2011. SWOT (strengths, weaknesses...
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...getting even more personal, with electronic products and chipsets being attached to “clothing, jewelry, shoes, glasses, watches, and even on your skin” (Stedmon et al., 1999). Developments in wearable technology have indeed suggested that it is possible to fully integrate both physical and functional aspects of smart devices, thereby increasing their operational efficiency. These findings suggest that wearable technology has the potential to be far better than the smartphone industry, and that these devices will provide consumers with greater accessibility and product efficiency. Even though wearable devices are still in its infancy, the technology is to survive for the long haul. During the early stages of the Smartphone industry, consumers were reluctant to shift from Desktop PCs. However, Smartphones are now at the center of our lifestyle,...
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...Case Case: Google MBA Japan-‐ INSY 690 (Case Analysis Assignment) Student: Lance Shields 1. What were the key factors behind Google’s early success? • Perfecting an innovative search engine was clearly the most important factor for Google founders’ early success. Turning the keyword spam problem on the web into an opportunity by solving it while grad students at Stanford led to Sergey Brin’s and Larry Page’s now famous PageRank algorithm. Instead of counting keywords like old search engines, the founders created reliable searches through the number of websites that link to a page or “votes” to weight search result relevance. • Google focusing on the user was another trait that attracted people initially as the nononsense simple white search page and distinctive colorful logo with no ads or editorial content on the page lead to easy and fast searches that Yahoo couldn’t imitate. This is described in their first truism “Focus on the user and all else will follow” where they talk about simplicity of interface and speed of page loads. • Google delivered search results people really wanted lead to users trusting Google as they promise to not sell placement in search results to advertisers and instead rely on the “true” natural search to deliver users the content they really are looking for. At the same time, their sponsored links were relevant to the searched keywords so that users...
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...Case Case: Google MBA Japan-‐ INSY 690 (Case Analysis Assignment) Student: Lance Shields 1. What were the key factors behind Google’s early success? • Perfecting an innovative search engine was clearly the most important factor for Google founders’ early success. Turning the keyword spam problem on the web into an opportunity by solving it while grad students at Stanford led to Sergey Brin’s and Larry Page’s now famous PageRank algorithm. Instead of counting keywords like old search engines, the founders created reliable searches through the number of websites that link to a page or “votes” to weight search result relevance. • Google focusing on the user was another trait that attracted people initially as the nononsense simple white search page and distinctive colorful logo with no ads or editorial content on the page lead to easy and fast searches that Yahoo couldn’t imitate. This is described in their first truism “Focus on the user and all else will follow” where they talk about simplicity of interface and speed of page loads. • Google delivered search results people really wanted lead to users trusting Google as they promise to not sell placement in search results to advertisers and instead rely on the “true” natural search to deliver users the content they really are looking for. At the same time, their sponsored links were relevant to...
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...internet business visionary(Biography, 2014) teamed up with his graduate school companion Sergey Brin to launch “Google”, a search engine and one of the most innovative startups in internet technology space, in 1998, which eventually became the most influential company in digital era (7).It is an unconventional company, set up benchmarks by attracting billions of users for applications like Chrome, Google Maps, Youtube and Android. The company started with a vision statement “To organize the world information, and make it universally accessible and useful” (14). Early years – Google as a startup As a research activity at Stanford University, Page and Brin created a search engine that recorded results according to the reputation of the pages, after concluding that the most reputed result would obviously be the most useful. They named the search engine as "Google" after the mathematical term "googol," which refers to the No. 1(Biography, 2014) followed by 100 zeros, to mirror their aim to organize the enormous amount of information accessible on the web. Both developed a search engine that recorded results, based on prominence of the pages, calling it "Google”, which became one the main web crawlers today. The evolution of Google, after the early years happened in four distinct phases. Phase I– Founding (1998-2001) Both Larry Page and Brin incorporated Google in 1998 with a mission “To organise the world’s information and make it universally...
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...Google: The Next 20 Billion Dollars Question Google: The Next 20 Billion Dollars Question 1 What do you think are the factors that make Google so successful? The first reason Google is so successful is its core business, the search engine. Google really perfected this tool (they were not the first, just the best) early on and gained first mover advantages. People found google easy to use and as a free search engine, really changed their lives around it. The article mentions Google being added to the English dictionary. The ability to use Google to find information has changed our society in many ways. The advantages and specialization for strictly information has moved from a select few to common knowledge. Google did not sit back and enjoy their success, but instead continued to reinvent themselves and the product mix they offered. The next major breakthrough for Google was the Android platform for mobile phones. Again, this was not a true invention, but Google found a way to bring a current product to customers, in a unique way, that offered value to a lot of people. I think this point is very important because this was nothing like the search engine that made Google successful in the first place. As Google looks for new product offerings for its customers, they are also looking at new places to find customers. The purchases of companies like YouTube, DoubleClick, and AdMob, have added strength and diversity to their product offerings. Google has made a concerted...
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...to store and forward information in a network. Large corporations are now using cloud computing as their key business structure. Users can connect to the cloud and store data, but they will be issued a fee for how much data they can store. The users can then retrieve the data from their laptop or smartphone. In a few years, cloud computing will be a primary storage service for many users. John Rhoton, a technology and business strategy consultant, defines cloud computing as a pool of virtual resources that are easily usable and accessible.i Rhoton mentions these resources are made up of hardware devices, information system platforms, and networking services.ii The cloud is built to be virtually unacknowledged by the user and perform in the simplest way. They are built using complex methods that are hidden from the user. Companies base their projects around simplicity because that is what the user wants. A user will buy a product or service that is easy to learn, compared to an abstract service that will take a lot of time and effort to use. A cloud network is very complex and misleading in terms of the infrastructure; however, the user can access the cloud by simply logging into the host from a webpage or a phone application. Generally, cloud services are built around consumers, but they are also used by businesses as well. Many companies are based around cloud services to provide users and businesses storage capabilities. The cloud is forming businesses and people...
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...5Some of Google¶s success in China will be determined by the actions and strategies of itsmain competitor Baidu. Up until now, Baidu has exploited its knowledge of Chinesecustoms and outmaneuvered Google in the search engine market. Recently however,Baidu has made several missteps that could cost it market share and investors haveresponded. Over the past year, Baidu¶s stock has been down over 33 percent versusGoogle¶s 18 percent. Search Accuracy The single greatest source of controversy surrounding Baidu has been its practice of giving preference to paid advertisements over organic search result. This practice came tohaunt Baidu when China¶s state run CCTV network reported in November that some patients sought care from unlicensed pharmaceutical companies because they appearedhigher on Baidu¶s search results. Baidu¶s stock took a 25 percent hit in one day xiv and thecompany cut its fourth quarter revenue forecast by 15 percent. Baidu quickly removed theunlicensed companies from its results and on March 29 th , 2009, it announced it woulddrop paid search rankings completely xv .Baidu¶s search problems do not stop there. Some former Baidu clients claim the searchengine dropped their web sites after they stopped buying search ads from Baidu xvi . Baiduhas denied these accusations, but a group of more than 50 companies are planning tolaunch a lawsuit against Baidu for anti-trust, fraud, and infringement violations xvii . Baiduis also allegedly complicit in another Chinese...
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...Question 1 Compare the business models and areas of strength of Apple, Google, and Microsoft. Answer Apple: It has the basis of creating a very strong hardware base for the internet future and thus logically they play their role in this battle by laying emphasis on the hardware that facilitates mobile computing. Apple has gone into the stance that applications, one of the major earners for tablet and phone manufacturers, should be device restricted. For example, one application should be unique to the brand of the device and should be allowed to function in another device from another separate brand. They even stopped Google in its plans to allow Google applications to work on Apple products. Thus by doing this Apple is trying to capitalize on their loyal customer base and create a Apple weds Apple scenario. Google: Google is the believer in the concept that in the future the devices used to run the applications and other internet options should be a fraction of what they are being charged now and instead the revenues generated should be from the in-app advertisements. Google even bought AdMob, an application advertisements development company, to work on such a concept. This future, Google and Microsoft have tried their hand at going hardware friendly but they still do not put the same emphasis on the hardware as Apple. Microsoft: Microsoft has laid its bet on the operating system on which the mobile computing devices shall run. Microsoft also has announced plans...
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...MICROSOFT AND THE INTERNET: HOW TO RESPOND TO THE RISE OF GOOGLE? Microsoft started investing in the market for internet search and internet advertising in 2003. Despite some interesting technological and marketing moves, however, the company was still a distant third to Google 5 years later and was losing money. In the early 2009, Microsoft’s executives were wondering which bold strategic moves could be made to change this situation. How the Microsoft adventure began At the end of 2008, Microsoft, founded by Bill Gates in 1975, was a giant with revenues of $60 billion and operating cash flow of $22 billion. A large part of Microsoft’s success had come from operating systems for personal computers. Operating systems were the core software that coordinated a computer’s activities. In the early 1980s, Microsoft was chosen by IBM to develop the MS-DOS and to tailor it to IBM needs. Bill Gates, who believed that many other companies might also adopt the same system, sold IBM the rights to use the software for $80,000 but insisted that Microsoft kept the copyrights on MS-DOS. This worked beyond expectations as the many competitors -for instance, Compaq or Dell- who imitated the IBM PC adopted MS-DOS as well, paying Microsoft licence fees of $15 per machine. By the early 1990s, Microsoft had over 90% of the operating system business, Apple gathering most of the rest. Armies of developers were also developing hundreds of software applications that ran on MS-DOS. Microsoft’s dominance...
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...Earnings guidance is a method in which publicly traded companies present their financial forecasts to the general public. These pro forma projections are generally provided on a quarterly basis and are an attempt by the reporting company’s finance team to predict the future growth of the organization. Utilized by public companies to instill confidence in both analysts and investors regarding the company’s future sustainability, these forecasts are usually accompanied by information pertaining to how the company expects to accomplish this feat. According to a 2009 survey by National Investor Relationship Institute, 84% of the companies who provided earnings guidance, said that they do so in order to “ensure sell-side consensus and market expectations are reasonable (NIRI Member Survey, 2009).” By setting expectations for investors through guidance reporting, reporting companies believe that they are mitigating any potentially negative effects on the company (i.e., a lowering of stock price) due to the possibility of missing target earnings. However, opposing business views believe that offering guidance actually has a negative effect on reporting organizations, causing companies to focus on short-term thinking while neglecting strategic and tactical management decisions that could have a bigger impact on the shareholder’s long-term upside. Many publicly traded companies, such as Costco, Ford, UPS, Coca-Cola and AT&T, agree with this opposing view of no guidance and have...
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...C OV ER F E AT U RE Entrepreneurial Innovation at Google Alberto Savoia and Patrick Copeland, Google To fully realize its innovation potential, Google encourages all of its employees to think and act like entrepreneurs. arge organizations have enormous innovation potential at their disposal. However, the innovation actually realized in successful products and services is usually only a small fraction of that potential. The amount and type of innovation a company achieves are directly related to the way it approaches, fosters, selects, and funds innovation efforts. To maximize innovation and avoid the dilemmas that mature companies face, Google complements the time-proven model of topdown innovation with its own brand of entrepreneurial innovation. L INNOVATION POTENTIAL The concept of innovation potential is a critical, but often overlooked, element in the discussion of innovation; defining and understanding this potential is important because it is the source of all innovation within a company. Intellectual. The company possesses significant knowhow and intellectual property in many areas—most notably in crawling, storing, indexing, organizing, and searching data on a massive scale and with an extremely fast response time. Physical. Google has a network of datacenters as well as a variety of custom, open source, and commercial hardware and software to harness this computing power and make it easily and seamlessly accessible to both customerfacing products...
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...brand and the "brand experience" are directly taken to consumers through interactive channels of retail, digital and live events. The Niche Factory is currently considering a new CRM system. The cloud is driving faster release & upgrade cycles overall. Customers use cloud applications in their everyday lives and those consumer applications typically have rapid response to feedback. The nature of cloud allows companies to be much more responsive giving you the flexibility to push out updates when you need to. (Columbus, 2013) There are a many cloud service companies to consider – you have to make a choice between an established, proven vendor or taking a chance as an early adopter of something new. (Columbus, 2013) In this case, we will look at three established, proven vendors: Google Compute Engine (GCE), Amazon Web Services (AWS), and Microsoft Azure. IaaS Considerations Infrastructure as a Service (IaaS) is a cloud model which allows organizations to outsource computing equipment and resources such as servers, storage, networking as well as services, such as load balancing and content delivery networks. The IaaS provider owns and maintains the equipment while the organization rents out the specific services it needs,...
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...The Nokia-Microsoft strategic alliance was announced in early 2011 to cooperate in the development of smartphones. The Wall Street Journal wrote: "Nokia calls Microsoft for help." 1 The Financial Times observed: "Elop jumps into the arms of former boss."2 The alliance was specifically initiated by Stephen Elop, an ex-Microsoft executive who had worked with Steve Ballmer, CEO of Microsoft. No wonder Nokia hired Elop to become its CEO in 2010. This was a calculated move by Nokia to grow in an industry that carried good prospects for the future. In addition, Elop's expertise was in the software sector, where Nokia wanted to venture into the future. Both companies needed a partner to expand in an industry that was in a growth mode. Besides this, Nokia was particularly vulnerable because of its losing market share and because Apple's iPhone was growing in the U.S. and global markets. Microsoft was interested in Nokia because of its long-term interest regarding introducing Windows phone technology/software. Since Nokia continued to be a global player in the cell phone industry, it made sense to create a corporate tie-up that aimed at global expansion for both companies. Success of Apple's iPhone was another factor in seeking a long-term alliance in a market that has grown multifold in the global mobile phone market. In 2012, Nokia was the largest manufacturer of mobile phones and other telecom gear in the world with revenues of $55 billion and a market capitalization...
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...As for Google’s bas of the market from the mobile, advertising and operating systems. The strengths for Microsoft are that they are still the leader in PC operating systems and desktop productivity software. But has failed miserably with regards towards smartphone hardware and software, mobile computing, cloud-based software apps; its internet portal. The strengths for Apple are mobile devices, such as iPhone and tablets. These devices combine and contribute 52% of apples business. They already have a head start on the mobile phone industry where they have over 250,000 applications. Apple controls 27% of the mobile market and the iPhone is the highest grossing cellphone ever. The strengths for Google are that they dominate in advertising with their search engine. And their Android OS controls 41% of the mobile market share. This mobile market is constantly growing 3 times faster than the iPhone market share. “They bought Android Inc. to enter the mobile market.” also bought out Motorola Inc. for 12.5 billion. 2. Mobile computing is important to Microsoft, Apple and Google because by 2012 the mobile market will be 200 billion dollars, with a 200% increase every 2.5 years. Therefore, it has been projected that by 2015 the mobile market will be worth 400 billion dollars. It is important for these firms because they want to maximize profit and market share by being aware of changing trends. 70% of the mobile market is dominated by Apple and Google while Microsoft failed to put its...
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