Katelyn O'Connor

Google Case Study

21 April 2013

1. Using competitor intelligence from the case material, assess the levels of market commonality and
resource similarity that Google has with key industry competitors. How will they influence competitive
behavior and the intensity of rivalry?

Material commonality and resource similarity create three drivers in competitive behavior: 1)
Awareness, the extent to which competitors recognize the degree of their mutual interdependence; 2)
Motivation concerns the firm's incentive to take action or respond to a competitor's attack and relates to
perceived gains and losses; 3) Ability with available resources the firm lacks the ability to attack a competitor
and respond to the competitor's actions. Google and its competitors' have high competitive rivalry. Competitive
rivalry is the ongoing actions and responses taking place between an individual firm and its competitors
(Unknown Author Competitive Rivalry and Competitive Dynamics). Since there are three main competitors in
Google's market innovation is a key driver for success. Each company including Google needs to innovate its
products and services to be better than the other companies.

Market Commonality Resource Similarity

 Search: Google and Yahoo! have personalized
home pages, toolbars, and local attractions.
 Applications: News, finance, sports,
entertainment, music, movies, weather,
shopping, real-estate, health, technology,
games, travel, personals, and auto applications.
 Mobile: Make their apps for smartphone and
tablet compatibility.
Yahoo!
 Tangible: Products and services are virtual
therefore limiting its cost of sales by reducing
labor, production, warehousing, and distribution
costs; In 2009 Google's R&D expenses were
12% of sales and Yahoo!'s were 19% of sales;
Sales and Marketing expenses in 2009 Google's
8.4% and Yahoo!'s 19%; 2009 G&A Expenses
Google's 7% and Yahoo!'s 9%; 2009 Sales by
Operating Segment Google's $23,651 and
Yahoo!'s $6,460;
 Intangible: Strong leadership; Partnered
companies in 2000; Gives users an oportunity
to have a personal experience on their sites;
Knowledgeable in the search engine market;
Common goal to provide innovative products
and services that provide consumers with the
ability to access, disseminate, create and use
computer data; Brand loyalty from users

 Apps: Microsoft software includes physical
products such as Windows & Office, Google
moves into the software market with its apps.
Google and Microsoft offer business products
and software as well.
Microsoft  Mobile: Google uses Android for its mobile
products, Microsoft is moving into the mobile
market with its Windows software for smart
phones.
 Search: Google is primarily a search engine.
Microsoft has entered into the search market
 Tangible: In 2009 Google's R&D expenses
were 12% of sales and Microsoft's were 15% of
sales; Sales and Marketing expenses in 2009
Google's 8.4% and Microsoft's 22%; 2009
G&A Expenses Google's 7% and Microsoft's
6%; 2009 Sales by Operating Segment Google's
$23,651 and Microsoft's $58,437;
 Intangible: Strong brand recognition; Common
goal to provide innovative products and
services that provide consumers with the ability
to access, disseminate, create and use computer
 with BING and MSN.
 Advertisement: Google's AdSense and
AdWords compete with Microsoft's Atlas
online tools.
 Apps: Apple has its own market for
applications for its iPhones, iPods and iPads.
All Apple products use Apple's software.
Google's Android is available on all
smartphones and tablets. Recently Google
launched its Google Marketplace which is
specifically for web applications.
Apple  Mobile: Google's Android has made a dramatic
push in market share. Apple's iPhone 3G offers
a touch screen, accelerometer, app store, GPS,
compass, video camera, and voice recognition.
The Motorola Droid, an Android device,
competes directly with Apple's iPhone.
*Table information is found in “Case 10: Google” by Archer, B., Carter, S., Dunphy, J., Ludwick, I., Nosack, M., & Qadeer, A.
data; Brand loyalty from users; Knowledgeable
in Mobile, Search, and App markets; Wide
variety of resources to innovate; Entering into
emerging markets such as Microsoft with its
Windows Mobile and Google with its Google
Marketplace web-based applications;
 Tangible: In 2009 Google's R&D expenses
were 12% of sales and Apple's were 4% of
sales; Sales and Marketing expenses in 2009
Google's 8.4% and Microsoft's 22%; 2009
G&A Expenses Google's 7% and Apple's were
not listed; 2009 Sales by Operating Segment
Google's $23,651 and Apples $36,537;
 Intangible: Strong brand recognition;
Common goal to provide innovative products
and services that provide consumers with the
ability to access, disseminate, create and use
computer data; Brand loyalty from users;
Knowledgeable in Mobile and App markets;
Wide variety of resources to innovate; Adapting
similar business strategies;

2. Conduct a competitor analysis and prepare an anticipated response profile for each major rival.

Product Summary
Google
 a technology company,
builds products and
provides services to
organize the
information and make it
universally accessible
and useful. It provides
Search, a service that
delivers relevant search
results in response to
user queries; Product
Listing Ads that offer
product information;
Search plus Your
World; Google Now, a
predictive search
feature; and Google
Knowledge Graph,
which enhances Search
service (Google
Business Summary)
Competitive Analysis
Strengths & Weaknesses
Google
 Strengths: Strong brand
name and is trustworthy; It
is dependable, reliable,
and fast; Innovative search
technology;
Comprehensive result and
provides relevant websites
promptly; Google search
available in over 130
languages and Google
owns over 160 localized
country/regional domains;
Inexpensive labor,
warehousing, production
and distribution costs;
Large number of
applications; Created
Open Handset Alliance
which is responsible for
creating the first full,
open-source, and freely
available mobile phone
operating system called
Android; Diversified
Strategies & Obj. Market Outlook
 Google's competitive  For all four competitors:
advantage is in its In the Internet age, ever-
ability to "leverage the changing technology rules
power of free" and its the domain (Archer, B.,
idea that "innovations Carter, S., Dunphy, J.,
don't stop at the Ludwick, I., Nosack, M.,
desktop"(Archer, B., & Qadeer, A. Case 10:
Carter, S., Dunphy, J., Google).
Ludwick, I., Nosack,  Exponential pace of
M., & Qadeer, A. Case technological
10: Google) advancement continues to
 Four main areas of render yesterday's
focus: Web Search, innovations obsolete,
"Search is how Google companies competing in
began and it's at the an industry relying on the
heart of what we do Internet would find that,
today"; Advertising, without proper investment
"You can make money in infrastructure, no
without doing evil"; amount of innovation will
Apps, "We built Google keep them ahead of the
Apps from the ground competition (Archer, B.,
up for today's Carter, S., Dunphy, J.,
connected world"; and Ludwick, I., Nosack, M.,
Mobile "You don't need & Qadeer, A. Case 10:
o be at your desk to Google).
 portfolio; Google builds its need an
own servers and has answer"(Archer, B.,
become the fourth largest Carter, S., Dunphy, J.,
server manufacturer in the Ludwick, I., Nosack,
world; Adopted a low M., & Qadeer, A. Case
price, high redundancy 10: Google).
storage model; AdWords
allows advertisers to target
their ads to user searches
for specific topics and/or
geographic regions;
AdSense allows Web site
owners to share in the
revenue generated by
click-through traffic from
Google ads; Launched
Google Cloud ( Archer,
B., Carter, S., Dunphy, J.,
Ludwick, I., Nosack, M.,
& Qadeer, A. Case 10:
Google)
 WEAKNESSES: Finding
new key employees and
infrastructure; Dependence
of advertising since that is
its main source of revenue;
Consistently have
innovated products; There
is no expert search;
Privacy issues caused by
Google Buzz and Wi-Fi
eavesdropping; Difficulty
penetrating Chinese
Market ( Archer, B.,
Carter, S., Dunphy, J.,
Ludwick, I., Nosack, M.,
& Qadeer, A. Case 10:
Google).
Yahoo!: Yahoo! Yahoo!
 a technology company,  Strengths: Strong  To be the center of
provides search, leadership; Strong brand people's online lives by
content, and loyalty; Strong product delivering personally
communication tools on recognition; Offers users relevant, meaningful
the Web and on mobile the opportunity to turn the Internet experiences
devices worldwide ( internet into a unique and (Archer, B., Carter, S.,
Yahoo! Business personal online Dunphy, J., Ludwick, I.,
Summary). experience; Strong Nosack, M., & Qadeer,
international presences; A. Case 10: Google).
Inexpensive labor,  The company focuses
warehousing, production on four categories that
and distribution costs; offer Yahoo! users the
Large number of opportunity to turn the
 applications compatible
with smartphones.
 WEAKNESSES: Formed
a partnership with Google
in 2000 however Google
became their largest
competitor and a
household name, cutting
its own throat ( Archer, B.,
Carter, S., Dunphy, J.,
Ludwick, I., Nosack, M.,
& Qadeer, A. Case 10:
Google); Competitive
environment; Top
competitors are Google,
Apple and Microsoft;
Technology market is
always changing, Yahoo!
must be innovative to stay
ahead of competitors.
Microsoft Microsoft
 develops, licenses, and STRENGHTS: Strong
supports software leadership; brand loyalty,
products and services; brand recognition; By
and designs and sells 1978 revenues already
hardware worldwide ( surpassed the $1million
Microsoft Business mark; Change the face of
Summary). the PC industry with its
release of Microsoft
Windows; Subsidiaries in
109 countries; Enormous
presence in the technology
industry (Archer, B.,
Carter, S., Dunphy, J.,
Ludwick, I., Nosack, M.,
& Qadeer, A. Case 10:
Google)
WEAKNESSES: Sells
physical goods, majority
of money spent on both
sales and marketing;
Relies on success of its
Windows and Office
products and only makes
incremental innovations (
Archer, B., Carter, S.,
Dunphy, J., Ludwick, I.,
Nosack, M., & Qadeer, A.
Case 10: Google); Google
is moving into its soft
ware market; Competitors
are Yahoo!, Google and
internet into a unique
and personal online
portal by displaying
specific content, pages
and applications chosen
by the user: Integrated
Consumer Experience,
Applications, Search,
and Media Products &
Solutions (Archer, B.,
Carter, S., Dunphy, J.,
Ludwick, I., Nosack,
M., & Qadeer, A. Case
10: Google).
Microsoft
 The worldwide leader
in software, services
and solutions that help
people and businesses
realize their full
potential (Archer, B.,
Carter, S., Dunphy, J.,
Ludwick, I., Nosack,
M., & Qadeer, A. Case
10: Google).
 Its corporate strategy
revolves around five
business segments:
Windows and Windows
Live, Server and Tools,
Online Services,
Microsoft Business, and
Entertainment and
devices ( Archer, B.,
Carter, S., Dunphy, J.,
Ludwick, I., Nosack,
M., & Qadeer, A. Case
10: Google).
 Apple;
Apple Apple
 together with  STRENGHTS: Strong
subsidiaries, designs, leadership, brand loyalty,
manufactures, and brand recognition; Known
markets mobile for its high quality
communication and products; Focused mainly
media devices, personal on hardware; Financial
computing products, success includes iTunes,
and portable digital iPod, and iPhone;
music players Customized language
worldwide (Apple pages on its website with
Business Summary) a choice of 105 different
countries/regions (Archer,
B., Carter, S., Dunphy, J.,
Ludwick, I., Nosack, M.,
& Qadeer, A. Case 10:
Google);
WEAKNESSES: Biggest
competitor Microsoft;
2009 Financial
performance place second
to Microsoft (Archer, B.,
Carter, S., Dunphy, J.,
Ludwick, I., Nosack, M.,
& Qadeer, A. Case 10:
Google); Only known for
hardware products such as
iPhones; Android is top
competitor to iPhone;
Apple
 Revolves around its
commitment to bringing
the best personal
computing, mobile
communication,
portable digital music,
and video experience to
consumers, students,
educators, businesses,
and government
agencies through its
innovative hardware,
software, peripherals,
services and internet
offerings (Archer, B.,
Carter, S., Dunphy, J.,
Ludwick, I., Nosack,
M., & Qadeer, A. Case
10: Google).
 Its ability to market
itself through a "digital
lifestyle" that touts its
products as highly
desirable, premium
offerings, as well as "a
culture of secrecy,
marketing capability,
brand image, and Steve
Jobs" ( Archer, B.,
Carter, S., Dunphy, J.,
Ludwick, I., Nosack,
M., & Qadeer, A. Case
10: Google).

Response Profile
Yahoo!
 Founded in 1994 by Jerry
Wang and David Flo (Archer,
B., Carter, S., Dunphy, J.,
Ludwick, I., Nosack, M., &
Qadeer, A. Case 10: Google)
Background  Located in Sunnyvale, CA
(Yahoo! Corporate Website
2013)
Financials (2009  Total Sales: $6,460,000
Microsoft
 Founded in 1975 by Bill
Gates and Paul Allen
(Archer, B., Carter, S.,
Dunphy, J., Ludwick, I.,
Nosack, M., & Qadeer, A.
Case 10: Google).
 Headquarters located in
Redmond, VA (Microsoft
Corporate Website 2013)
 Various offices throughout
the United States.
 Total Sales $58,437,000
Apple
 Founded in 1976 by
Steve Wozniak, Steve
Jobs and Ron Wayne
 Headquarters located
in, Cupertino,
California (Apple
Corporate Summary
2013).
 Total Net Sales
Statistics retrieved  R&D Expenses $1,210,000
from Case 10:  Sales & Marketing Expenses
Google) $1,245,000
 G&A Expenses $580,000
 Homepage, MyYahoo!,
Toolbar, Local and Connected
TV, Mail, Messenger, Search,
Answers, Flickr, News,
Finance, Sports,
Entertainment & Lifestyles,
Health, Tech, Education,
Products
Weather, Shopping, Real-
estate, Travel, Hotjobs,
Personals, Autos, and Small
business applications (Archer,
B., Carter, S., Dunphy, J.,
Ludwick, I., Nosack, M., &
Qadeer, A. Case 10: Google)
 Key Personnel: Marissa
Mayer CEO, President and
Director; Ron Vell General
Counsel and Secretary; Scott
Burke Senior VP, Display
Advertising and Advertising
Technology; Adam Chan
Senior VP of Mobile and
Emerging Products; Henrique
De Castro COO; David Dibble
Executive Vice President,
Technology and Operations;
David Flo Co-found and Chief
Yahoo!; Ken Goldman CFO;
Laurie Mann Senior VP of
Search Products; Jacqueline
Personnel D. Reses Chief Development
Officer; Jay Rossiter Senior
VP, Platforms; Kathy Savitt
Chief Marketing Officer
(Yahoo! Corporate Summary
2013).
 11,500 employees in 25
countries, provinces, and
territories (Yahoo! Corporate
Summary 2013).
 R&D Expenses $9,010,000 $36,537
 Sales & Marketing Expenses  R&D Expenses
$12,879,000 $1,333,000
 G&A Expenses $3,700,000  G&A Expenses
$4,149,000
 Windows and Windows  Mac Desktops, Mac
Live, Server and Tools, Portables, Music
Online Services, Microsoft related products and
Business, and Entertainment services, iPhone and
and Devices (Archer, B., related products and
Carter, S., Dunphy, J., services, Peripherals
Ludwick, I., Nosack, M., & and other hardware,
Qadeer, A. Case 10: software and services
Google) (Archer, B., Carter,
S., Dunphy, J.,
Ludwick, I., Nosack,
M., & Qadeer, A.
Case 10: Google)
 Key Personnel: Steve  Board of Directors:
Ballmer CEO; Tony Bates Arthur D. Levinson,
President, the Skype William V. Campbell,
Division of Microsoft; Peter Tim Cook, Millard S.
Klein CFO, Julie Larson- Drexler, Albert A.
Green Corporate VP Gore Jr., Robert A.
Windows; Craig Mundie Iger, Ronald D. Sugar
Senior Advisor to the CEO; (Apple Corporate
Terry Myerson Corporate Summary 2013)
VP Windows Phone
Division; Eric Rudder Chief
Technical Strategy Officer;
Brad Smith General Counsel
and Executive VP, Legal
and Corporate Affairs; Lisa
Brummel Chief People
Office; Kurt DelBene
President Microsoft Office
Division; Qi Lu President
Online Services Division;
Don Mattrick President
Interactive Entertainment
Business; Satya Nadella
President Server & Tools
Business; Tami Reller Chief
Marketing Officer and Chief
Financial Officer Windows;
Kirill Tatinov President
Microsoft Business
Solutions Division; B. Kevin
Turner COO (Microsoft
Corporate Summary 2013)
 Over 100,000 employees

 To be the center of people's
online lives by delivering
personally relevant,
meaningful Internet
experiences (Archer, B.,
Carter, S., Dunphy, J.,
Ludwick, I., Nosack, M., &
Qadeer, A. Case 10: Google).
 The company focuses on four
categories that offer Yahoo!
users the opportunity to turn
the internet into a unique and
personal online portal by
displaying specific content,
pages and applications chosen
by the user: Integrated
Consumer Experience,
Corporate and Applications, Search, and
Marketing Media Products & Solutions
Strategies (Archer, B., Carter, S.,
Dunphy, J., Ludwick, I.,
Nosack, M., & Qadeer, A.
Case 10: Google).
world wide
 The worldwide leader in
software, services and
solutions that help people
and businesses realize their
full potential (Archer, B.,
Carter, S., Dunphy, J.,
Ludwick, I., Nosack, M., &
Qadeer, A. Case 10:
Google).
 Its corporate strategy
revolves around five
business segments:
Windows and Windows
Live, Server and Tools,
Online Services, Microsoft
Business, and Entertainment
and devices ( Archer, B.,
Carter, S., Dunphy, J.,
Ludwick, I., Nosack, M., &
Qadeer, A. Case 10:
Google).
 Revolves around its
commitment to
bringing the best
personal computing,
mobile
communication,
portable digital music,
and video experience
to consumers,
students, educators,
businesses, and
government agencies
through its innovative
hardware, software,
peripherals, services
and internet offerings
(Archer, B., Carter,
S., Dunphy, J.,
Ludwick, I., Nosack,
M., & Qadeer, A.
Case 10: Google).
 Its ability to market
itself through a
"digital lifestyle" that
touts its products as
highly desirable,
premium offerings, as
well as "a culture of
secrecy, marketing
capability, brand
image, and Steve
Jobs" ( Archer, B.,
Carter, S., Dunphy,
J., Ludwick, I.,
Nosack, M., &
Qadeer, A. Case 10:
Google).

3. Considering Google’s external and internal environmental conditions, does a SWOT analysis reveal
any insights to enhance the company’s efforts to compete or improve performance?

A SWOT Analysis (shown below) does offer insight to Google’s efforts to compete and improve
performance. By conducting a SWOT analysis Google can determine how to turn its weaknesses into strengths
and threats into new opportunities for the company. Google must stay ahead of its competitors to be the top
company in technology, mobile, and services markets. Google is finding new products to introduce to these
markets and by doing so there is always an opportunity to improve their current and future products. By
conducting a SWOT analysis Google can pinpoint wherein the markets the company can advance and introduce
new items.
 STRENGTH
 Strong brand name and is trustworthy.
 It is dependable, reliable, and fast.
 Innovative search technology.
 Due to its simplicity, it gives comprehensive
result and provides relevant websites promptly.
 Google search available in over 130 languages
and Google owns over 160 localized
country/regional domains.
 Inexpensive labor, warehousing, production and
distribution costs
 Advertisement sales account for 97% of Google’s
total revenue in 2008 & 2009
 Large number of applications.
 Created Open Handset Alliance which is
responsible for creating the first full, open-source,
and freely available mobile phone operating
system called Android.
 Diversified portfolio
 Google builds its own servers and has become the
fourth largest server manufacturer in the world.
 Adopted a low price, high redundancy storage
model.
 AdWords allows advertisers to target their ads to
user searches for specific topics and/or
geographic regions.
 AdSense allows Web site owners to share in the
revenue generated by click-through traffic from
Google ads.
 Launched Google Cloud.
WEAKNESSES
 Finding new key employees and infrastructure.
 Dependence of advertising since that is its main
source of revenue.
 Lack of experience.
 Consistently have innovated products.
 There is no expert search.
 Privacy issues caused by Google Buzz and Wi-Fi
eavesdropping.
 Difficulty penetrating Chinese Market.
OPPORTUNITIES
 To expand its services to the unmapped countries.
 New advertisement format and tracking
mechanisms.
 Size of current customer base and market share.
 Leverage advertising agreements.
 Market is constantly evolving; there is room for
growth in all markets.
 Development of ultra-fast fiber networks, give
Google a competitive advantage.
 Majority of operating expenses are spent on R&D,
therefore Google has plenty of resources to create
new products before its competitors.
THREATS
 Not having any entry barrier for a long time in this
business, many competitors can catch up Google's
market and surface in coming years with the same
services and better interface.
 Competition from Microsoft, Apple and Yahoo!.
They can have greater resources, bundled services,
and the ability to attract and retain users through
portals.
 Increasing intellectual property claims and resources
needed for legal claims.
 Increasing competition can reduce operating
margins.
 Domestic and international laws and regulations
especially in China.
 China is home to one of Google’s main competitors,
Baidu which is more than just a search engine.
Baidu offers e-commerce, online payment business,
the Baidu Union as network claims more than
$1billion ad impression daily.
 Telefonica, world’s largest mobile operator,
 considering charging access to network.
*SWOT Analysis information found in “Case 10: Google” by Archer, B., Carter, S., Dunphy, J., Ludwick, I., Nosack, M., & Qadeer, A.

4. Examine Google’s strategies and strengths in each business segment.

 When the dot com boom busted and competitors spent time on brand building Google
focused instead on quietly building a better search engine.
 Google adopted key areas that seek continuous advancements: objectivity, global access,
ease of use, pertinent and useful commercial information, multiple access platforms and
Search improving the web.
 Increasing capital expenditures and targeted these areas resulted in a solid infrastructure,
better products, increased traffic, appeal for advertisers and a standard unreachable by
competitors.

 Advertisements account for 97% of Google’s revenue.

 AdWords allows advertisers to target their ads user’s searches for specific topics and/or
geographic regions.
 AdWords is cost effective and provides ads to what users are interested in at that
moment.
 AdSense allows Website owners to share in the revenue generated by click-through
traffic from Google ads placed on their site that are targets to uses based on the content
Advertising
of their site.
 Google differentiates as from other content with “sponsored links” or Ads by Google’
label to inform the consumer when an advertiser pays Google.
 AdSense and AdWords do not clutter the actual search by the consumer.
 Google uses Google Analytics, Website Optimizer, Insights for Search and Ad Planner
to make tracking advertisement measurable and efficient

 Google Apps improve the web for users and provides a venue for advertisements.
 Google provides apps for personal, educational and business use such as Gmail, Google
Finance, and Google Docs.
 Google launched Google Marketplace for web applications which are the first viable
platform for cloud computing from third parties. Increases utilization.
Apps
 Google collects 20% of revenue generated by the third party applications without having
to spend additional resources of its own.
 Google cloud makes the search faster, helping find answers to billions of queries, the
system does not get old and regenerates itself as capacity grows.

 Two main components in Google’s strategy: free, rich feature offerings and distribution
of the operating system to handset manufacturers for free or less than free.
 Android devices compete along with iPhone and offers all the same features plus
QWERTY keyboard and multitasking.
 Supports Adobe flash while Apple does not.
 Turn-by-turn GPS is free provided by Google Maps on Android.
Mobile
 Android is an open-source operating system free for anyone to use and modify as
needed.
 Google shares advertising revenues with manufacturers using Google’s Apps pack,
manufacturers are paid to use Android providing a “less than free” business model and
gain a competitive advantage.

*Table information is found in “Case 10: Google” by Archer, B., Carter, S., Dunphy, J., Ludwick, I., Nosack, M., & Qadeer, A.
 References:
Archer, B., Carter, S., Dunphy, J., Ludwick, I., Nosack, M., & Qadeer, A. Case 10: Google Retrieved
from Strategic Management: Competitiveness & Globalization 10th edition (2013)
Unknown Author Competitive Rivalry and Competitive Dynamics
http://www.slideserve.com/agalia/chapter-5-competitive-rivalry-and-competitive-dynamics
Unknown Author Yahoo! Business Summary http://finance.yahoo.com/q/pr?s=AAPL
Unknown Author Google Business Summary http://finance.yahoo.com/q/pr?s=GOOG
Unknown Author Microsoft Business Summary http://finance.yahoo.com/q/pr?s=MSFT
Unknown Author Apple Business Summary http://finance.yahoo.com/q/pr?s=YHOO
Yahoo! Corporate Website 2013 http://pressroom.yahoo.net/pr/ycorp/management.aspx
Microsoft Corporate Website 2013 https://www.microsoft.com/about/companyinformation
Apple Corporate Website 2013 http://www.apple.com