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TWC Google

TWC Google

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Published by ysloh.20085116

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Published by: ysloh.20085116 on Oct 08, 2009
Copyright:Attribution Non-commercial


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MGMT002 – Technology and WorldChangeG4Business Case: GoogleWritten Report
Prepared for:Dr. Teo Kwong MengPrepared by:LOH Yao ShengMichelle TING Mei ChenRemi CHOONG CiyuanRoger KOH Fong Jit
Q1.Google was a late mover in the internet search industry, entering themarket later than firms such as AltaVista and Inktomi. Being a late mover,Google benefitted by learning well from the mistakes of its predecessors.AltaVista and Inktomi were the first movers in internet search, providingdirectory giant Yahoo! with algorithms which enabled automated search.However, as with all first movers, loopholes and errors are unavoidable.Both companies faced problems of “algorithm abuse” which resulted inspam that frustrated its users.Notably, both companies did not foresee this problem. This may be onedisadvantage of first movers - the potential problems are unknown.Furthermore, in an attempt to be the first mover (which has its benefits tobe mentioned below), companies may “rush” out their projects and henceoverlook important details such as system integrity, potential abuses anduser friendliness.Having said that, we cannot undermine the benefits of a first moveradvantage. Microsoft with operating systems and Creative with soundcards are two good examples. A first mover establishes standards inaccordance with their expertise and new companies looking to enter themarket need to compete against their expertise. This poses significantbarriers to entry for new firms. Also, by the time a competitor arises, thefirst mover would have secured a loyal consumer base. This makes it hardfor late movers to claw market share away from first movers.Google, conversely, is a company that arises after witnessing theinadequacies of its predecessors. As such, it has the advantage of understanding and preventing the pitfalls its predecessors faced. Also,being a late mover, Google can concentrate on improving currentlyestablished systems instead of starting from scratch. In the case of Google, the company improved search by creating an algorithm thatprevents abuse. By using algorithms instead of reinventing ways toautomate search, Google did not have to start from scratch (which isobviously harder).
It was clear that by solving the problem of spam, Google has set a newstandard as Yahoo! soon replaced Inktomi with Google. However, this isonly effective if the standards established by the first mover aresignificantly improved upon.Q2.In order to predict Google’s future market share, we need to address thisquestion from both advertisers and consumers’ point of view.As consumers, we wish to find the required sites as quickly and as hasslefree as possible. This means that the company with the fastest and mostaccurate search results will garner a greater consumer base than itscompetitors. With regards to Google, its unique PageRank algorithmensures that users receive the most relevant search results; henceconsumers are more skewed towards Google.In addition, Google’s corporate value of “don’t be evil” translates tocorporate social responsibility (CSR). Much academic research has shownthat CSR leads to increased competitiveness. In the case of Google, itensured that profits did not manipulate search results and users, whocontinued to get the relevant search results they desired, stayed loyal toGoogle for its relevancy.Lastly, Google’s great diversification in other fields encourages users touse Google out of convenience. For example, the Google Toolbar has asearch function which, obviously, uses the Google search engine.For the advertisers, Google’s cheaper rates and greater degree of click-through meant maximized efficiency and significant cost savings. It isobvious for any smart advertiser to advertise on Google – lower costs yetbetter results.Furthermore, with a majority of search users preferring Google, smartadvertisers, in an attempt to capture a greater marketing mass, wouldnaturally advertise with Google as well.

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