Macroeconomics Environmental Analysis

Macroeconomic Environmental Analysis Google Inc. is the largest and best search engine. Google operates in the Internet industry. “The company primarily focuses on the areas, which include search, advertising, operating systems and platforms and enterprise” (Market Watch, 2011, para.1). Larry Page (CEO) oversees Google Inc. a public operating company. Keyword based advertising is how the business creates the majority of the company’s profits. “Google’s mission is to organize the world‘s information and make it universally accessible and useful” (Google, 2011, para. 1). In this paper, Google’s external environment will be discussed, which includes the industry environment and the operating environment.
Industry Analysis The buyer’s hold a great deal of power in the Internet industry. Internet users without any high costs can use search engines. Google is replicable search engine used by the users of Internet industry because the organization is one of the best. Staying power is established by any business that has built a strong reputation. “The framework captures the complexity of power and proves useful for tracing changes in power status over time between value chain members in industrial relationships” (Akpinar & Zettinig, 2008, para. 2). Individuals who can develop new online services, website concepts, and technologies are considered the suppliers of the industry. Internet businesses have extended their advantages on a competitive level through excellent technology in terms of web designs and services. For instance, Google was developed because of a new and distinctive process that was applied to Internet searching. There is no company that will not contend with other companies because the competition is extremely high in the internal industry. The Internet industry is still growing and all organizations want an ample portion of customer base and profits. In the Internet industry, the customers can shop the most attractive prices without stressing about costs because of low switching costs. Substitution is exceptionally high in this industry due to the low switching costs and many businesses are in completion for the customers. “Any indication that a market is growing, under-served or particularly profitable will trigger interest from an entrepreneur who believes that there is money to be made from your market” (Simister, 2011, para. 1).
Macroeconomic Environment “Environmental scanning is the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends” (Rohan, 2011, para. 1). This tool is used to avert any type of surprise strategically and to guarantee the company’s future. The reason for the environmental scanning is for a company to become educated about trends and events in the environment and predict the destined position to recognize the advantage and disadvantage determinant in the environment from the position of the firm. Technology environment, political factors, economic factors, legal factors, and social-cultural factors are the macro environment variables that affect Google’s industry.
Political Factors and Economic Factors Political factors and economic factors are two macroeconomic variables that affect Google. The chart given below shows the Internet industry growth, GDP rising in the United States economy, and the economic environment of the United States economy. The economy in the United States has an advantage over other wealthy countries. The chart displays Google’s growth very prospective manner. “The increasing GDP rate of the economy allows the company to have continuous growth” (BEA, 2010, para.3). “Durable-goods manufacturing and retail trade were among the leading contributors to the upturn in U.S. economic growth in 2010, according to preliminary statistics on the breakout of real gross domestic product (GDP) by industry from the Bureau of Economic Analysis” (BEA, 2010, para. 3). Gross Domestic Product by Industry Graph [pic] The graph below displays the promotion and hiring of workers. Mixed performances are shown from 2009 to 2011. Monthly job gains have increased over the last month by 0.4% and the unemployment rate had decline from 9%. “Payroll gains in the U.S. improved last month, while an increase in the number of Americans leaving the workforce helped push the jobless rate down to 8.6 percent, is the lowest level since March 2009” (Chandra, 2011, para. 1).
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Challenges and opportunities Google has a chance to further their share of the market. China, Russia, Czech Republic, Japan, and South Korea are the five countries that Google does not have powerful influence. If the company wants continuous growth at its current rate, Google have to amplify their market share in all the five countries by a bigger percentage of 15. Google can gain and attract a lot of customers through advertising. The company’s income would increase because of the amount of revenue gained from advertising. Mobile devices are a potential opportunity for Google. Google has created software for mobile users. The users have to install the required software before. By preinstalling the services in mobile phones, Google would permit the five countries mobile users to use the company’s search service to reacquire more pertinent and precise information directly from their cell phones. This would increase Google’s market share within all five countries. Google continues to go after world-class levels. Google has done an excellent job in scanning the competitive environment, enforcing solutions and answers to aid the company properly in the future. However, there are many obstacles ahead and the fast-changing competitive landscape will definitely cause many shifts in Google’s strategic business plan. If Google is to continue to be a key player in the Internet industry, the company must continue to be watchful in scanning the global Internet environment. Google must be able and willing to make changes quickly when necessary.

References
Akpinar, M., & Zettinig, P. (2008). Improving Supplier Power in the Buyer-Dominated Automotive Industry. Journal Of Transnational Management, 13(4), 342-355. doi:10.1080/15475770802561722. Retrieved from EBSCOhost
BEA, (2011). US Economy at a Glance. Retrieved from www.bea.gov/newsreleases/glance.htm
Chandra, S. (2011). Payroll Gains Improve as U.S. Unemployment Rate Drops: Economy. Retrieved from www.bloomberg.com/.../payroll-gains-improve-as-u-s-
Google, (2011). Company Google. Retrieved from www.google.com/about/corporate/company
Market Watch Inc. (2011). Google Company Profile. Retrieved from www.marketwatch.com/investing/stock/goog/profile
Rohan, (2011). Environmental Scanning in the New Millennium. Retrieved from www-rohan.sdsu.edu/~renglish/370/notes/chapt03/index.htm
Simister, P. (2011). Threats of New Entrants and Barriers to Entry. Retrieved from businesscoaching.typepad.com/the_business.../industry-analys.html