Introduction

Google Inc. is a technology company specializing in internet related services and products,
such as online advertising, software development, search engine, email, cloud computing,
smartphone operating system, a social network service, telecommunications equipment and
many more. Googles main service and cash cow is the Google web search engine, handling
more than 100 billion searches each month or more than three billion per day and providing
$50 billion revenues in 2012 (Biswas, 2013).

Company History
Googles history goes back in 1996 when Larry Page and Sergey Brin, both Stanford PhD
students in computer science, collaborated to develop a new search engine; its name was
BackRub and it was very popular among Silicon Valley internet users (Gamble, 2011). The
search engine was renamed to Google and in 1998 it was incorporated as a private company.
In 2004, Google Inc. announced an initial public offering and entered the stock exchange
market raising $3.6 billion.
From 1998 until today Google Inc. has grown dramatically becoming the leading technology
company. At that time, it was an innovative small startup company operating out of a garage
with four employees using discounted computer components. Now, the company has a 5-acre
campus (Googleplex) in California to host its headquarters, offices all around the globe and a
workforce of approximately 50.000 employees (Frommer, 2014). Its growth was accomplished
through a chain of products and services providing online software. Moreover, the company
made a huge step forward by developing the mobile operating system Android and the
browser Chrome OS. Another factor, which enhanced Googles rapid growth, was strategic
cooperation and partnerships with other technology related companies, such as HTC in
producing Nexus One smartphone.
Furthermore, what made Google such a successful company are the numerous and also
strategic acquisitions and merges. The company has spent more than $28 billion acquiring
163 companies, which is almost one company per month (Smith, 2014). These companies
are all technology related business in different segments, like mobile software engineering
(Android), websites (YouTube), online advertising (DoubleClick), home automation systems
(NestLabs), mobile device manufacturing (Motorola Mobility), robotics (Boston Dynamics) and
many more.

Market
Size & Growth

Google operates in the internet industry. This is a vast market as it addresses every person
on earth who has access to a computer, a smartphone or a tablet. By the end of 2014, the
percentage of the global population using the internet was 40%, meaning more than three
billion users, the majority of them is located in Asian countries (Internet World Stats, 2015).
Year by year the number of users is increasing; the global IP traffic has increased fivefold
over the past five years, and will increase threefold over the next five years (Cisco, 2015).
Trends
Since 2007, when Apple Inc. introduced the iPhone, mobile devices that connect to the World
Wide Web have been part of our lives. Nowadays, more and more devices have the ability to
be connected to the internet, such as watches, glasses, TV screens, drones, cameras and
even household equipment.
In the digital world, the changes and advancements are accelerating. Social media are
thriving creating a new advertising and marketing field; websites for mobile users and
smartphone applications are updating in order to become more optimal and user-friendly; the
data volume that is uploaded online is rapidly increasing making cloud computing a necessary
tool, especially for businesses and corporations. Furthermore, e-Commerce is a market that is
growing rapidly, as more and more users purchase goods and services online.

Stakeholders Analysis
Stakeholders are the people or a group of people who have interest in an organization. These
people are affected by a firms performance and have claims on its performance (Volberda,
2011). Stakeholders can be divided in three categories, according to the interest they have
upon the companys objectives and performance: Capital Market, Organizational and Product
Market Stakeholders.
In Google Inc., the capital market stakeholders are the companys owners and the
shareholders. The organizational performance and especially the public image of the firm
concern the owners and their families, as status changes have an impact on their personal
lives and their financial stability. The companys shareholders, who are individuals or financial
institutions owning shares of Google, are mainly affected by the firms financial performance,
as their key concern is earn money by receiving their dividends.
Organizational stakeholders group consists of the companys employees including managers
and people who have a non-managerial role, such as chefs in the different restaurants inside
the premises of Googleplex, security guards and others. The main workforce of Google are IT
people specializing in software programming and in research and development area, and
advertisers. These people responsibilities are implementing the organizational culture and
strategy in order to meet the companys targets and objectives. Because of the companys
nature it is expected of them to be innovative and creative, attributes that require great

motivation. For this reason, Googles leadership focuses on creating the happiest and most
productive workplace in the world, as Larry Page (CEO) stated (Malone, 2014).
Product Market stakeholders are the billions of people using Google products, such as
internet users and also businesses, like advertisers working with AdWords or AdSense
products. The individual users are those who have made Google the brand that it is today.
They search to find answers to their questions, and they have taken for granted that Google
will provide the answers. Also, they send mails using gmail.com and they upload their
personal data on Google Drive. Google users trust the company with their personal and
private information, because it is free; however they expect that this information will be
protected from a third party.
Advertisers working with Google are a very powerful group of stakeholders, as they are those
who provide large revenues to the company ($29 billions in 2010). It is estimated that
approximately 4 million advertisers use Google and the number is even bigger as the
company does not disclose its international advertisers numbers (OReilly, 2015). Since,
advertising is the companys main source of income Google has to make sure that AdWords
and AdSense users are happy and satisfied. For this reason, the company has invested a lot
of effort and resources for further development of these services.

The foundations of this company are expressed in its name as it was conceived by the word
googol, which is the number represented by the numerical 1 followed by 100 zeros. Brin and
Page chose this name so that the companys mission statement organizing the worlds
information and making it universally accessible and useful to all can be reflected on it.

SWOT Analysis
Conducting a SWOT analysis (strengths, weaknesses, opportunities, threats), a company can
determine and be aware of its current status. Therefore, the organization can improve or hold
its strength positions and qualities, limit its weaknesses, seize opportunities and be conscious
of possible threats.

Strengths
Google is considered by Interbrands ranking system as the number two brand worldwide,
upgrading by 15% its brand value in 2014, reaching $107 billions. Google is an established
brand name the most popular among internet users. Due to its numerous innovations and
technological advances, the company has developed a major competitive advantage, which
has differentiated itself among its competitors. It is the most visited web page worldwide, and
it is the market leader in internet search engines, with a global market share of 65% of
internet searches performed by computer and mobile devices (Gamble, 2011). Today, instead
of praying to God, people try Google (Anonymous); this quality combined with companys
marketing products (AdWord & AdSense) has generated advertising revenues of more than
$28.2 billion in 2010.
In addition, Google has invested generously in research and development, in acquiring or
merging with other innovative technology companies, creating, thus, a very patent portfolio.
The company has 2566 patents in 2014, being in the 8 th position of intellectual right ownership
among other technology companies (Statista, 2015).
Weaknesses
Google has invested a lot of resources on optimizing and advancing its advertising products
and services. More than 90% of the companys revenues, in 2012, come solely from online
advertisements. Thus, we can say that Google is over-dependent by advertising and in the
long term it will be necessary to find other sources of income.
Although Google has more than 24 products and applications, users are unaware of the
existence of the majority of them; thus, the firm has to promote its other products and
services, without drawing away from its cultural values.
Moreover, Google has often found itself in courtrooms for litigation over intellectual property,
against other major technology companies, such as Oracle, Apple, Sony, Microsoft. These
judicial conflicts are costly and time-consuming distracting the company from producing
innovative products.
Opportunities
Although the Apple iPhone was the market leader, as it was first brand entering the
smartphone market, in May 2011 Google Android surpassed its major competitor by reaching
the 38,1% of market share. The smartphone market is thriving as the number of active
devices is constantly increasing, so there is plenty of space for Google to extend its share.
Having, also, acquired Motorola Mobility the firm can compete Apples cash cow iPhone, by
producing its own smartphone devices.
As described previously, a new trend driving the internet market is cloud computing. As
businesses are expanding globally, the programs and the data used would move from local

hard drives or intranets to the internet. Thus, the cloud industry would become a common
software platform, operating globally, and could grow up to a $95 billion market by 2013
(Gamble, 2011).
Furthermore, Google TV is an innovative product that could raise attention and revenues. A
crystal clear, high definition TV set that could search live network and cable programming, in
addition to streaming videos from major providers, can substitute current cable or satellite TV
services. The company has, also, developed Google fiber, an ultrafast broadband network in
a number of US cities that can be easily spread through the country, because consumers
demand faster internet connections.
Former Soviet Union countries and China are markets that are booming and Google has
already stepped in. Just in Russia, there are approximately 66 million internet users and the
online advertising market is worth of $1.17 billion, with a 39% growth rate in 2013 (Emerging
Europe Blog, 2013). On the other hand, the China market looks even more promising and
attractive as it has the most internet users (over than 300 million) in the world.
Threats
As Google is an internet operating firm, so cyber attacks on its systems can cause a lot of
damage. In 2014, there was a security breach in Apples cloud computing services (iCloud)
and a collection of pictures of celebrities, mostly women, containing nudity were spread on
websites and social networks. Except the celebrities public image, this event caused damage
on Apples integrity and iClouds users questioned the security protocols. Thus, Google must
protect its customers private data by a future hacker attack.
Competition from Facebook can be considered as possible threat to the companys
competitive advantage in online advertising. The number of Facebook users is rapidly
increasing, as long as with time spent on the worlds largest social network. The number of
advertisers working with Facebook Ads is growing and in the long term Google may see its
advertising revenues decrease. Also, Google+, Googles social network, seems unable to
compete with Facebook in the social media market.
Last, the possibly biggest threat to Google is the considerable amount of resources spent
defending itself in court during the technological patent war that takes place the last years.
In 2010, the company spent almost $2 billion on legal related services.

Porters Five Forces for Google Inc.

Porters five forces is a key model to determine the competition in a certain market or industry.
This tool helps to analyze the powers that determine an industry attractive or not; and also
understand the strength of a companys current position or the strength of apposition the
company is considering moving into.

Bargaining Power of Suppliers - Moderate

The suppliers bargaining power is currently low and will remain low as Google maintains
strong market dominance. AdSense and Adwords are considered as highly efficient
advertising systems generating large revenues. Thus, advertisers worldwide prefer Google
than its competitors and are willing to maintain a good relationship with the company.
However, in the smartphone industry, Android Operating System depends on other firms,
such as Samsung or HTC, as it is applied on their products. If those organizations decide to
create their own OS, Android will face a big threat.

Bargaining Power of Buyers - Low

Google maintains the highest market share among its competitors, as they dominate the
search engine market. In July 2011, the companys website attracted the 65,1% of the internet
users, whereas the main competitors, Yahoo and Microsoft, shared the 30,5% of users.
Moreover, this service is provided for free and the daily number of queries is increasing.
Despite the fact that users can easily switch and choose to use Yahoo or Bing search
engines, Googles brand is so strong that the bargaining power of buyers remains low.

Threat of Substitutes - Low

Search engines can be described as the ships that users use in order to navigate at the vast
sea of data, which is called the internet. As the internet has become the primary source of
information, search engines have become indispensable. Google Inc. has a commanding
presence in the World Wide Web, so there is no room for any substitute.

Threat of New Entries - Low

Google and the rest of the competitors have a low risk of new entry because of the high entry
barriers. It would take a huge investment of resources to build a new internet company to
compete with Googles products and services, as advanced technology is required. Also, the
technological environment is highly protected as there is a great number of patents acquired
by the existing technology companies.

Rivalry among Existing Firms - Moderate

In the search engine market Google Inc. is way more ahead than its competitors. YouTube,
Chrome browser, Google Maps and Google Street View are innovative products and services
that have given a competitive advantage against its major competitors Yahoo and Microsoft.
However, in the smartphone market the company has positioned itself competing with Apples
iPhone. Although Android OS has a higher market share than iOS, there is no Android phone
that would come close to the market share of the iPhone on its own.

PEST Analysis
Using the PEST tool, the business external environment is analyzed in four areas according
to the political, economic, sociological and technological aspects.

Political
Google effects indirectly the political and social environment of countries and therefore it has
an important role in creating and shaping the political and social forces inside the society. This
significant influence of Google takes place as a result of the amount of information that is
searched via Google products. Specially, YouTube provides politicians and political parties the
opportunity of communicating and expressing directly their ideas and ideology with a very
affected way, via videos, targeting a vast group. Thus, Google has advantage over the
political environment as it increases its users and gains more power.
Formal institutions havent formally affected activities of Google. Though, Google has been
pressurized from the Departure of Justice to quit storage search terms (Buncombe, 2006) and
also from government of China to cooperate and censor some activists (Gamble, 2011). In
2008, Google offer a privacy link to the users to learn about Googles political policies
concerning political and legal matters (Google,2008).

Economical
The last decades Google has experienced increased request for its services because it
covers peoples need to stay connected and informed no matter what the circumstances are.
Therefore, more businesses prefer to be advertised by Google due to the vast ranged of
target groups. In 2008, the year when the economic crisis commenced, Google wasnt
affected. On the contrary, its objective to increase profits was accomplished, as online was
booming.

Sociological

Google is a multinational organization, which offers its services all around the world and
makes internet navigable. Google targets any user with access to Internet, so the more
people with access to the Internet a country has, the bigger the interest of Google is, due to
the potential demand for its services. Nowadays, Internet in the developed areas of the world
is an essential daily activity, whereas in undeveloped regions, like Africa, only a minor share
of the population has access to the Internet due to the absence of telecommunications
infrastructure.
Google is a multicultural worldwide organization that provides many job and career
opportunities, as the leading company in the internet industry, so it has an essential role to the
worldwide society. Google values equally the work and distribution of male and female
employees, despite the fact that it attracts more male applicants due to the nature of the
industry. Also, a great effort has taken place by the advertising Chief of Google into
encouraging and supporting women to study science and technology, due to the minority of
women in this domain of workforce.

Technology
Technology is the main core of Google. As technology dynamically expands, Google tries to
ensure that the company pushes the limits of existing technology and has a primary role in its
evolution. Products like mobile phones, tablets, glasses, TV screens and many more have the
ability to be connected to the internet. Thus, such devices are estimated to increase the
number of internet users as well as the frequency of internet usage.
Google, as an organization, has a big vision for the future, therefore its side projects tend to
push the company to the future. Google is so committed to this objective that is investing
recourses into reaching it. The companys RD department, Google X, is running classified
projects, like space elevators, driverless cars and robots.