PBL ASSIGNMENT

ON
ANALYSIS OF GOOGLE

ANALYSIS OF GOOGLE

SUBMITTED TO: SUBMITTED BY

DR. VANDANA BHARTI ANUBHAV GUPTA
MBAN1MG21005
DEAN OF SOM
PALAK JAIN
MBAN1MG21094
SUBMITTED TO: SEJAL HAYARAN

DR. VANDANA BHARTI MBAN1MG21068

NAMRATA SAHU
DEAN OF SOM
MBAN1MG21018
SHRUTI PACHUARI
MBAN1MG21036

SUBMITTED BY
ANUBHAV GUPTA
MBAN1MG21005
PALAK JAIN
 CONTENT

Summary of the organization

Company History

Key Strategic Issues

SWOT Analysis

PESTEL Analysis

Future trends of Google

Competitors Analysis

Competitive Advantage

Core Competency

Alternatives

Decision Criteria

Decisions

Implementation

References
 SUMMARY OF THE ORGANIZATION

Google, in full Google LLC formerly Google Inc. (1998–2017), American search
engine company, founded in 1998 by Sergey Brin and Larry Page, that is a subsidiary of
the holding company Alphabet Inc. More than 70 percent of worldwide online search
requests are handled by Google, placing it at the heart of most Internet users’ experience. Its
headquarters are in Mountain View, California.

Google began as an online search firm, but it now offers more than 50 Internet services and
products, from e-mail and online document creation to software for mobile phones and tablet
computers. In addition, its 2012 acquisition of Motorola Mobility put it in the position to sell
hardware in the form of mobile phones. Google’s broad product portfolio and size make it
one of the top four influential companies in the high-tech marketplace, along
with Apple, IBM, and Microsoft. Despite this myriad of products, its original search tool
remains the core of its success. In 2016 Alphabet earned nearly all of its revenue from
Google advertising based on users’ search requests.

In this report we have taken strategic issue of innovation in google and tried to analyze many
other issue and alternatives.
 COMPANY HISTORY

The very popular search engine called Google was invented by computer scientists Larry
Page and Sergey Brin. The site was named after a googol—the name for the number 1
followed by 100 zeros—found in the book Mathematics and the Imagination by Edward
Kasner and James Newman. To the site's founders, the name represents the immense amount
of information that a search engine has to sift through.

Backrub, PageRank, and Delivering Search Results- In 1995, Page and Brin met at
Stanford University while they were graduate students in computer science. By January 1996,
the pair began collaborating on writing a program for a search engine dubbed Backrub,
named after its ability to do backlink analysis. The project resulted in a widely
popular research paper titled "The Anatomy of a Large-Scale Hypertextual Web Search
Engine."
This search engine was unique in that it used a technology they developed called PageRank
that determined a website's relevance by taking into account the number of pages, along with
the importance of the pages, that linked back to the original site. At the time, search engines
ranked results based on how often a search term appeared on a webpage.
Next, fueled by the rave reviews that Backrub received, Page and Brin began working on
developing Google. It was very much a shoestring project at the time. Operating out of their
dorm rooms, the pair built a server network using cheap, used, and borrowed personal
computers. They even maxed out their credit cards buying terabytes of disks at discount
prices.
They first tried to license their search engine technology but failed to find anyone that wanted
their product at an early stage of development. Page and Brin then decided to keep Google
and seek more financing, improve the product, and take it to the public themselves when they
had a polished product.

Initial Funding-The strategy worked, and after more development, the Google search engine
eventually turned into a hot commodity. Sun Microsystems co-founder Andy Bechtolsheim
was so impressed that after a quick demo of Google, he told the pair, "Instead of us
discussing all the details, why don't I just write you a check?"

Bechtolsheim's check was for $100,000 and was made out to Google Inc., despite the fact
that Google as a legal entity did not exist yet. That next step didn't take long, however—Page
and Brin incorporated on September 4, 1998. The check also enabled them to raise $900,000
more for their initial round of funding. Other angel investors included Amazon.com founder
Jeff Bezos.

With sufficient funds, Google Inc. opened its first office in Menlo Park,
California. Google.com, a beta (test status) search engine, was launched and answered 10,000
search queries every day. On September 21, 1999, Google officially removed the beta from
its title.

Rise to Prominence- In 2001, Google filed for and received a patent for its PageRank
technology that listed Larry Page as the inventor. By then, the company had relocated to a
larger space in nearby Palo Alto. After the company finally went public, there were concerns
that the one-time startup's rapid growth would change the company culture, which was based
on the company motto "Do No Evil." The pledge reflected a commitment by the founders and
all employees to carry out their work with objectivity and without conflicts of interest and
bias. To ensure the company stayed true to its core values, the position of chief culture officer
was established.

During the period of rapid growth, the company introduced a variety of products, including
Gmail, Google Docs, Google Drive, Google Voice, and a web browser called Chrome. It also
acquired streaming video platforms YouTube and Blogger.com. More recently, there have
been forays into different sectors. Some examples are Nexus (smartphones), Android (mobile
operating system), Pixel (mobile computer hardware), a smart speaker (Google Home),
broadband (Google Fi), Chromebooks (laptops), Stadia (gaming), self-driving cars, and
numerous other ventures. Advertising revenue generated by search requests remains its
biggest earnings driver, however.

In 2015, Google underwent a restructuring of divisions and personnel under the conglomerate
name Alphabet. Sergey Brin became president of the newly-formed parent company, Larry
Page the CEO. Brin's position at Google was filled with the promotion of Sundar Pichai.
Collectively, Alphabet and its subsidiaries consistently rank among the top 10 most valuable
and influential companies in the world.
 KEY ISSUE-PROBLEM

Google’s leaders created Alphabet to expand into areas outside its traditional core value
proposition. The company’s vision was to create value outside its conventional information
technology (IT)-related operations. They envisioned using the company and resources to
make positive changes to the world. However, Alphabet could not address critical questions
posed by the business community. Google, Alphabet’s subsidiary, generates almost 86% of
the company’s revenue. This situation led to queries on Alphabet’s core value proposition
and how it planned to generate its revenue independently. Since its inception, Alphabet has
been diversifying, although it lacks a clear strategy.

The company also faces other strategic issues, including ethical issues and degradation of
human resource practices. For years, the company has faced legal and regulatory pressures
for violating antitrust and data protection laws. Typically, the company uses defensive
strategies to protect its market position. Defensive approaches refer to the techniques used by
a company to block competitors from entering its market or imitating its products. A
company deploying defensive strategies can protect its market position but at the same time
risk violating antitrust laws.

For example, Google created the “InPrivate” functionality in their chrome browser. The
feature required chrome customers to use the operating system, an act that would eliminate
Microsoft as a viable competitor. Purposefully creating a feature that limits customers’
choices is a violation of the antitrust law. The company has also faced legal sanctions for
violating data privacy and protection laws. Google collects and stores customer’s identifiable
data (location, age, names, address, etc.), purchasing behaviors, preferences, and mail
messages. Although the company claims it uses the data to personalize Ads and improve user
experience, it also risks people’s privacy.

The third issue with the company’s strategy is the deterioration of the infamous informal HR
practices. In fact, these practices are part of the company’s core value propositions. However,
since the inception of Alphabet, Google’s employee size has been growing, consequently
demanding a centralized and formal approach. The company’s employee size increased
significantly from 16,805 to 88,110 in less than a decade (Grant 2018, p. 25). Employees
within the company are at liberty to select their leaders and switch teams without the HR
department’s permission. However, Google discourages structured responsibilities, formality,
and hierarchical authority and privileges. According to Schenkel and Brazeal (2016), this
kind of flat organization structure creates a conducive environment to nurture self-efficacy
and motivation to pursue desired outcomes. However, the diversification strategy adopted by
Google Inc. threatens its current organizational structure’s efficacy; its present-day employee
size demands a centralized and formalized administration unit or management.

The main strategic issues facing Google include privacy disaster, hiring and retention,
competition from new companies, risk of disruption by new startups, risk of antirust and copy
infringement, and violation of privacy (Ireland, et. al, 71). Goggle has reproduced more than
15 million books without the permission of copyright holders.

This has resulted to massive copyright infringement cases that might lead to massive losses in
litigation. Security is one of Google’s strategic challenges. Privacy and property issues have
presented challenges to the corporation’s management. Google has a lot of private
information on people such that it is unable to secure appropriately.

Liabilities for security breaches are a critical corporate weakness that Google has to deal
with. It also faces the anti-piracy legislation risk for several violations that have cost a lot in
litigation cases. Piracy is also another threat to Google’s brand and dominance in the market.

New startups are emerging every day and pose threats to Google (Ireland, et. al, 74). With
new and innovative products, Google faces stiff competition and risks suffering disruption
from new entrants.
 SWOT ANALYSIS

Strengths

 Market Leader in Search Engines- Perhaps the biggest strength of Google is that it
is the undisputed leader in search engines, which means that it has a domineering and
lion’s share of the internet searches worldwide. Google has more than 65% of the
market share for internet searches and the competitors do not even come close to
anywhere that Google does.
 Ability to Generate User Traffic- Google is a household brand in the world, its
ability to drive internet user traffic is legendary, and this has helped it become one of
the most powerful brands in the world. Indeed, Google averages more than 1.2 Billion
hits a month in terms of the unique searches that users perform on the site. This gives
it an unrivaled and unparalleled edge over its competitors in the market.
 Revenue from Advertising and Display- Its revenue model wherein it garners
humungous profits through partnerships with third party sites has held the company in
good stead as far as its ability to mop up resources and increase both its top-line as
well as bottom-line is concerned. This is another key strength of the company that has
helped it scale greater heights.
 Introduction of Android and Mobile Technologies- The last of the strengths
discussed here relates to its adoption of Android and Mobile technologies, this has
resulted in it becoming a direct competitor of Apple as far as these devices, and
operating systems are concerned.

Weaknesses

 Excessive Reliance on Secrecy- Google does not reveal its algorithm for searches or
even its basic formula as far as internet searches are concerned leading to many
experts slamming the company for being opaque and hiding behind the veneer of
secrecy. However, in recent years, Google has taken steps to redress this by providing
a bare bones version of its unique search engine algorithm.
  Falling Ad Rates- In recent years and especially in 2013, the company has been
faced with declining revenues from ads and as a result, the profitability of the
company has taken a hit. This is partly due to the ongoing global economic slowdown
and partly because of competitors snapping at its heels in a more aggressive manner.
Indeed, Apple has already taken steps to garner search engine revenues in its devices
and hence, Google must be cognizant of the challenges that lie ahead.
 Overdependence on Advertising- Google’s business model relies heavily on
advertising and the numbers reveal that it gets more than 85% of its revenues from
ads alone. This means that any potential dip in revenues would cost the company
dearly (literally as well as metaphorically). The point here is that Google has to devise
a more robust business model that embraces e-commerce and mobile commerce along
with its current business model that is based on ad revenues alone.
 Lack of Compatibility with next generation devices- Another weakness for Google
is that it is not compatible with many next generation computing platforms including
mobile and tablet computers and this remains an area of concern for the company.

Opportunities

 Android Operating System- Perhaps the biggest opportunity for Google lies in its
pioneering effort in providing the Android OS (Operating System) which has resulted
in its becoming a direct competitor to Apple and Samsung.
 Diversification into non-Ad Business Models- As discussed earlier, the company
has to diversify into non-ad revenues if it has to remain profitable and current
indications are that it is adapting itself to this as can be seen from the push towards
commercial transactions using its numerous sites like Google Books, Google Maps
etc.
 Google Glasses and Google Play- The introduction of Google Glasses and Google
Play promises to be a game changer for Google and this is a significant opportunity
that the company can exploit. Indeed, this very aspect can make the company take the
next evolutionary leap into the emerging world of nano-computing.
 Cloud Computing- Cloud Computing remains a key opportunity for Google as it is
already experienced in providing storage and cloud solutions. Indeed, if not anything,
it can move into the enterprise market using the cloud-computing paradigm.
Threats

 Competition from Facebook- The advent of Social Media has seriously threatened
Google’s dominance in the internet world and the company has to pull an ace to deal
with the increasing features available on Facebook and Twitter.

 Mobile Computing- Another threat to Google is from the emerging area of mobile
computing that threatens to pass the company by as newer companies seize the
opportunity to ramp up their mobile computing presence.
 PESTEL ANALYSIS

Political Factors

Governmental activities and policies affect Google’s strategies, revenues, profits, and
competitive position. This part of the PESTEL/PESTLE analysis model assesses
governmental influence on the information technology and services business. In considering
Google’s remote or macro-environment and relative business performance compared to firms
like Apple, Amazon, Microsoft, and Facebook, the following political external factors should
be considered:

1. Wider free trade agreements (opportunity)

2. Stable political climates in most of the major markets (opportunity)
3. State-sponsored online companies (threat)

Current international relations maintain wider free trade agreements, which present
opportunities for Google LLC. For example, these agreements facilitate exports of the
company’s products, such as Pixel smartphones. Thus, free trade agreements are political
external factors that benefit Google. Also in this PESTEL/PESTLE analysis, stable political
conditions pave the way for the company’s further growth in technology markets worldwide.
Such stability is an external factor that makes the remote or macro-environment conducive to
the growth of companies like Google. In contrast, state-sponsored or state-owned online
companies in some countries are a political external factor that poses a competitive threat in
the industry environment. The combination of these political factors in this part of the
PESTEL/PESTLE analysis indicates that Google could focus on growing its online and non-
online operations based on free trade agreements and markets’ political stability.

Economic Factors

Google’s business is subject to economic trends, which in the PESTEL/PESTLE analysis

model are external factors that affect business revenues, profits, and growth, based on market
growth and stability. For example, economic trends dictate customers’ willingness to pay for
 information technology services. In Google’s case, the following economic external factors
influence the remote or macro-environment:

1. Economic stability of major markets (opportunity)

2. Rapid growth of developing countries (opportunity)
3. Gradually decreasing cost of renewable energy (opportunity)

This part of the PESTEL/PESTLE analysis presents opportunities for Google’s business
growth through economic opportunity based on major markets’ stability. The rapid growth of
developing countries is also an economic external factor that equates to significant business
growth opportunities for Google. For example, the company could expand its distribution of
mobile computing devices. In addition, the decreasing cost of renewable energy is an
opportunity to strengthen Google’s energy supply. The digital advertising services company
could expand its renewable energy programs to enhance operational stability. This move
would support Google LLC’s corporate social responsibility strategy. These economic factors
facilitate the technology company’s growth. With the right strategies, business growth and
expansion are expectable through the external factors identified in this part of the
PESTEL/PESTLE analysis of Google.

Social/Sociocultural Factors

Social or sociocultural factors affect Google’s remote or macro-environment through

people’s behaviors. For example, these external factors influence customers’ perception of
and behavior toward the company’s online advertising operations. In this part of the
PESTEL/PESTLE analysis, the following social external factors are considerations in
Google’s business:

1. Increasing use of social media (threat and opportunity)

2. Rising diversity of online users (opportunity)
3. Rising criticism against online companies’ use of personal data (threat)

The increasing use of social media is a threat because of the presence of firms like Facebook.
These firms compete against Google’s business, especially in online digital advertising. The
same external factor is considered an opportunity in this part of the PESTEL/PESTLE
analysis because of growth in social media operations. For example, riding this sociocultural
 trend, Google could innovate its YouTube operations to further grow its customer base. In
addition, the rising diversity of online users creates opportunities to improve the business
through technological tools and innovation. Google could improve its algorithms to match the
diversity of customers and their preferences. In contrast, rising criticism against companies’
use of personal information is a social external factor that adds hostility in the remote or
macro-environment, especially against online firms that use personal information and related
data for digital advertisements. Overall, this part of the PESTEL/PESTLE analysis of Google
LLC shows that, despite sociocultural threats, there are opportunities to boost the
corporation’s performance. The business needs strategies that holistically address the
identified external factors. Google LLC’s marketing mix or 4Ps help entice more customers,
based on these existing social/sociocultural trends.

Technological Factors

The technological nature of Google’s business means that technological external factors
significantly impact the firm and its remote or macro-environment. The PESTEL/PESTLE
analysis model considers technological trends as makers or breakers of technology
businesses. The following are the technological factors in Google’s industry environment:

1. Growing Internet access in developing countries (opportunity)

2. Rapid adoption of mobile devices in the global market (opportunity)
3. Growing use of cloud services worldwide (opportunity)

Google has the opportunity to grow based on increasing Internet access in developing
countries. This technological external factor in the PESTEL/PESTLE analysis translates to
market growth in these countries, where the company could offer more of its hardware,
software, and online services. Also, the continuing worldwide adoption of mobile devices
gives the corporation the opportunity to grow through higher sales of its smartphones and
wider use of the Google Play Store via devices with the Android operating system. The
company could improve the mobile-friendliness of its products to ensure wider adoption
among mobile users. Furthermore, the growing use of cloud services is a technological factor
that gives Google the opportunity to improve its revenues in this market. For example, the
company could implement more aggressive marketing strategies to grow its cloud computing
services. The external factors in this part of the PESTEL/PESTLE analysis of Google show
 that there are various business growth opportunities based on technological trends influencing
the company’s remote or macro-environment.

Ecological/Environmental Factors

While Google LLC generates most of its revenues online, the firm is subject to ecological or
environmental external factors. In the PESTEL/PESTLE analysis model, these external trends
influence business strategic direction, such as among companies in the cloud computing
services industry. The following ecological external factors affect Google’s remote or macro
environment:

1. Continually growing support for environmentalism (opportunity)

2. Growing interest in sustainable business among suppliers (opportunity)

Strengthening environmentalism is an external factor that affects the industry environment of

companies like Google. For example, environmentalism makes green technology products
more attractive. In this PESTEL/PESTLE analysis case, Google’s use of renewable energy
makes its services satisfactory with regard to customers’ preference for green technologies.
Similarly, the technology giant’s suppliers are increasingly taking interest in sustainable
business practices. This ecological trend creates the opportunity to further strengthen
Google’s corporate image by doing business with suppliers with sustainable operations. This
part of the PESTEL/PESTLE analysis emphasizes ecological external factors that create
opportunities to improve the technology company’s business through ecologically sound
strategies. Google’s corporate social responsibility strategy helps ensure that these
opportunities are addressed.

Legal Factors

Google operates within limits imposed through laws or regulations. In the PESTEL/PESTLE
analysis model, regulatory requirements influence what firms can do, such as the extent of
companies’ use of online users’ personally identifiable information. The following are the
legal external factors that shape Google’s remote or macro environment:

1. Increasing regulations on online privacy (opportunity)

2. Stronger regulations on intellectual property rights (opportunity)
3. Growing restrictions on the use of customers’ personal information (threat and opportunity)

Increasing regulations for online privacy is an external factor that gives the opportunity to
improve products and increase customer satisfaction. In the PESTEL/PESTLE framework,
addressing this trend could make Google’s products more competitive against companies
with weaker privacy protections. In relation, stronger regulations on intellectual property
rights are a legal factor that presents another opportunity for the company to improve its
technological goods and services. For example, in relation to the operations of Alphabet
Inc.’s other subsidiaries, Google could strengthen its intellectual property filings while
providing tools for individuals and organizations to ensure the protection of their respective
intellectual properties. On the other hand, growing regulatory restrictions on the use of
customers’ personal information is a threat, considering the company’s dependence on using
customers’ individual and aggregate data to support services like online digital advertising.
Nonetheless, in this PESTEL/PESTLE analysis, such an external factor creates an
opportunity for Google to build on its existing systems and processes to enhance its
consensual use of online users’ information. Such enhancement could make the company’s
image more satisfactory among target customers in the online environment.
 FUTURE TRENDS OF GOOGLE

The internet is filled with useful tools designed to help make our marketing lives a bit easier.
Some of the most useful ones come from a little company called Google. Google collects
mountains of information about what people do online, what people search for, what they
click on, etc.
Google Trends is a free tool that offers insights into the trends of Google searches – not
necessarily showing us how many people search for something in a day, but which searches
are most popular and when. This data is extremely useful for marketers because we can
identify when people begin looking for things. If we’re selling ski packages, it would be
handy to know when people in Canada start searching for them. Do they wait for the first
snowfall or are they planning months in advance? Google Trends can give us those answers.

The tool also provides us with information about related searches, searches by location and
searches by type (Google, Google Images, Google News, YouTube, etc.). We can also look at
data from previous years and identify patterns in consumer behaviour from year to year.
Pretty useful information huh?

Let’s look at a simple example and play a fun game.

Below is the data for the last 30 days of searches for two seasonal items (tis’ the season) – the
“Grey Cup” (that’s the Canadian version of the Super Bowl) and Mariah Carey’s festive hit
“All I Want For Christmas Is You”.

The lines on the graph don’t represent the exact number of searches but show “Interest over
time”. Google explains “Interest over time” as…

“Numbers represent search interest relative to the highest point on the chart for the given
region and time. A value of 100 is the peak popularity for the term. A value of 50 means that
the term is half as popular. Likewise, a score of 0 means the term was less than 1% as popular
as the peak.”
Let’s look at the “Interest over time” for these two items when searched in Google…The blue
and red stay pretty close until November 20th. Blue starts it’s upward trend and gets even
higher throughout the week.

The second is the same search but in YouTube.

The story is very different on YouTube. Red is on an upward trend throughout November
while blue stays pretty flat.
Based on the above graphics, can you guess which search phrase is red and which is
blue? Click here for the answer.
Outside of playing a fun game, what have we learned? Instead of guessing what people are
searching for and when they are searching for it, the information is readily available
in Google Trends!
 COMPETITOR ANALYSIS

1. Bing

Bing is a web search engine owned and operated by Microsoft. It is the second most popular
search engine after Google. In 2020, Bing’s search advertising revenue was $7.74 billion, a
fraction of Google’s over $100 billion search revenue.

2. Yahoo!

Yahoo is a search engine and one of the pioneers in Internet services. In 2017, Verizon
acquired Yahoo! for $ 4.48 billion. The company also offers financial news, a business
directory, and e-mail and instant message services. In 2020, Yahoo had over 8,600 employees
and generated $5.17 billion in revenues.

3. Baidu

Baidu is the fourth most popular search engine globally, behind Google, Bing, and Yahoo.
But it is the top search engine in China with 75% of the market, ahead of Google. Baidu’s
“robocar” also competes with Google’s autonomous vehicle. Baidu is Google Search’s top
competitor in China.

4. Yandex

Yandex is a Russian multinational tech company that offers Internet search services. The
company also develops intelligent products and services powered by machine learning. In
2020, Yandex had 10,227 employees and generated $3.02 billion in revenues and $173
million in profits.

5. DuckDuckGo

DuckDuckGo is an Internet search engine designed to protect searchers’ privacy. The

company’s selling point is its privacy-first model. Unlike Google, DuckDuckGo doesn’t
personalize search results or display search results from content farms. Today, DuckDuckGo
employs 78 people and generates around $25 million annually.
 COMPETITIVE ADVANTAGES

Google, because of its size, innovation, and market position, has a number of competitive
advantages. While Google has many competitive advantages, it possible to narrow Google’s
competitive advantages into three main categories consisting of infrastructure, innovative
services, and market share.

1. Technology Infrastructure

First, Google has an incredibly powerful infrastructure is not easily replicated. Just like Wal-
Mart is known for having highly efficient supply chain infrastructure with a massive
investment in plant assets and equipment including transport vehicles, enormous warehouse
facilities, and high tech inventory systems, Google has a vast technology infrastructure.

Google does not disclose the number of data centers or servers they operate, but based on
energy usage, the dollar amount of Google’s capital expenditures, and other factors, estimates
can be made on the size and efficiency of Google’s infrastructure. Royal Pingdom, a
technology company whose clients include Microsoft, Amazon.com, IBM, and McAfee,
among many others, has complied information to locate the 36 data centers they believe
Google was using as of 2008 (Pingdom AB, 2008). According to information provided by
Google on their data centers page, most of their locations cost between $300-600 million to
build and equip (Google). A 2011 article from Data Center Knowledge reported that Google
was probably using somewhere around 900,000 servers. If went on further to note that,
despite Google’s massive operations which use .01% of the entire world’s electricity,
Google’s data center’s are incredibly efficient as they use less than 1% of the power used by
data centers worldwide (Miller, 2011).

Google’s services would not be possible without their infrastructure which makes it very hard
for competitors to copy or even try to rival Google. Even if they had the computing know-
how, they would have to spend billions building from the ground up to establish the backbone
of their operations. This makes Google’s infrastructure a sustainable competitive advantage.
2. Innovative Services

The next competitive advantage that Google boasts is all of its innovative services. While the
case lists 40 different Google services, a Wikipedia article lists well of 100 Google services
including the renown “Google Search,” Gmail, Blogger, Google Finance, Google Docs,
Google Apps, Adsense, and Google Chrome, just to mention a few. While many of these
services were developed in-house, Google has also greatly expanded its services through
acquisitions, with YouTube, being a classic example.

The incredible value of Google’s services lies in the fact that Google can offer nearly all of
their services at zero cost to web users. Because of the number of services and users, Google
is able to offer an attractive advertising model and make billions of dollars every year.
Because of its infrastructure, Google is able to offer an incredible range of services. While
similar services may be used by competitors, Google gives its users the chance to enjoy a
“one-stop-shop” for all their Internet and computing needs. This is a hard advantage for
competitors to overcome, however, Google must continue to innovate in order to make this
advantage sustainable.

3. Market Share

Google’s last major competitive advantage is market share. Comscore, a well known leader
in technology monitoring, issues monthly reports on market share for a number of digital
services. The results from Comscore’s search engine rankings and market share reports are
almost always published through major media outlets such as Reuters or Bloomberg.
According to Comscore’s March 2012 report, Google Search currently holds 66.4% of the
market share in Internet searching (2012). Google’s closest competitor is Microsoft with
15.3%. Google has held this strong majority of search market share for quite some time. The
January 2010 report from Comscore listed Google at 65.4%, with Yahoo!, the next closest
competitor, at 17.0% (2010). Clearly, Google has a significant foothold in the search
industry, but that is not the only service in which Google leads the way in market share.

Comscore’s February report for US mobile subscriber market share revealed Google has
having 50.1% of market, nearly 20 percentage points above Apple who had 30.2% of the
market (comScore, 2012). Unlike Google Search, which has historically dominated the
market, just two years ago in January 2010 Google only had 7.1% market share in mobile
phones while Research in Motion lead the industry with 43.0% (comScore, 2010). This
proves that Google can preserve market share in one industry while having the ability to gain
a huge market share in a completely different market.

Google’s market share in various industries is not only a sign that the company’s strategies
are paying off, but also creates a strong competitive advantage. Because so many people use
Google, it has become more than a household name. In fact, the word “Google” has even
become noun as people often say “I’ll just Google it,” as a reference to searching the Internet.
This is not only good for Google’s brand, but it also gives Google an edge for any new
products or services they wish to launch. Customer loyalty also plays a role because
individuals using Google’s services are less likely to try other competitors since they may
feel comfortable using and understanding Google’s products such as their search engine or
Android operating system.

These three competitive advantages place Google in a very strong position for the future. A
recent article featured on Seeking Alpha, an investment website, argued that Google stock is
likely to increase $140 in the next year (ValueMax, 2012). The evidence presented by these
strategic advantages certainly lends creditability to the previously stated conclusion.
 CORE COMPETENCY

"Google's core competency is based on the technology used in the search service, which is
capable of building and organizing a database that makes it possible for the Internet user to
find practically any piece of information he may be looking for." (Sugano, Gonçalves and
Figueira. 2009). Arnold (2005) explains the Google's core competencies as, "Google's
competitive advantage comes from its core competencies in computer hardware and software
engineering. Search is simply the most visible application running on the Googleplex."

It is obvious that Google has superior capability in software engineering in content indexing
and maintaining scalable hardware infrastructure, and this is a one of the major core
competency of Google Inc. Google has cultivated a culture of innovation from its inception
and it can be considered as one of the core competency (Google Inc, 2010).

The above core competencies have the features such as "essential to corporate survival in the
short and long term, difficult to imitate, unique to the enterprise, essential to the development
of core products and eventually to end products, result from a mix of skills, resources and
processes" etc.. which described by MacMillan and Tampoe (2000).
 ALTERNATIVES

Solutions to the Distinguished Issues

Ethical Issues and HR Management

The organization can solve the ethical issues impacting its functionality by developing and
enforcing well-informed protection procedures and policies. The procedures should focus
mainly on safeguarding the organization and consumers’ data across the data lifecycle. A
study conducted by Jeong and Kim (2020) showed that effective information protection
policies improve adherence to data protection and privacy laws. The company can still retain
its decentralized government even with its large employee size. A study conducted by
Andrews (2017) showed no relationship between organization size, social capital, and
decentralized decision-making. With capable leadership and management, the company can
still effectively operate under decentralized governance.

The Solution to Alphabet’s Unclear Strategy

Without a clear strategy, a company lacks identifiable objections and direction. A

straightforward business approach provides an organization with the focus and vision it needs
to achieve its corporate goals and plans. Alphabet has an unclear corporate strategy and has
failed to differentiate itself from Google. Alphabet needs to determine whether it needs to
specialize or diversify. Companies diversify for three significant reasons: growth, risk
reduction, and value creation. Collectively, these goals aim to create and maximize
shareholder value.

Michael Porter described three primary tests used to determine whether a company’s
diversification will indeed generate shareholder value. The tests include the attractiveness
test, cost-of-entry test, and better-off test (Grant, 2018). Loosely translated, the attractiveness
test aims to establish whether the industry to be entered is attractive. Alphabet is trying to
enter a market using a strategy that differs significantly from its traditional model. Schommer
et al.’s (2019) study showed that when firms diversify into unrelated business lines, their
diversification’s marginal benefits reduce and their performance declines significantly. Based
on the argument presented above, Alphabet’s strategy to enter the life sciences and healthcare
industry may be considered unattractive and unprofitable.
An industry’s attractiveness is not enough to ascertain whether the company’s diversification
will create value. The cost of entering the business may cancel out the industry’s
attractiveness. The better-off-test – the third test developed by Michael Potter – is the
ultimate diversification assessment; it is the most pertinent test for Alphabet’s situation. It is
instrumental in ascertaining whether incorporating two or more businesses within a single
organization will generate any profits. According to Grant (2018), a robust competitive
advantage makes an industry’s unattractiveness, e.g., low profitability, irrelevant in the long
run. Therefore, if Alphabet’s diversification strategy brings a competitive advantage to the
business, it would be okay for the company to venture into the healthcare and life-sciences
industry. Its competitive advantage would counter the unattractiveness associated with
entering an unattractive market.

However, business experts argue that creating value is not an adequate justification to
diversify. Michael Goold and associates posit that a parent company must always add value
for itself and its subsidiaries (Grant, 2018). From this perspective, Alphabet should have
parenting value to support Google and its other businesses. Currently, Alphabet does not have
the parenting value because it depends on its subsidiary company, Google, for revenue
generation. Alphabet’s strategy must also have parenting value to have a competitive
advantage.

It is imperative that Google deals with the aforementioned strategic issues to guarantee
sustained growth and dominance. First, it should develop measures to deal with security
breaches because customers are likely to move to other corporations that provide secure
services (Kourdi 64). The company risks losing loyal customers due to rampant security
breaches if amendments are not made.

Secondly, it should develop stringent measures to fight piracy that threatens its dominance
and uniqueness of products. Thirdly, it should invest heavily in innovation because of the risk
of disruption from new entrants (Kourdi 64). Lastly, Google should provide better
remuneration benefits and incentives for its employees in order to deal effectively with hiring
and retention issues.
 DECISION CRETARIA OF GOOGLE

We will take the that factor which is most important for the people to use google and will try
to make decisions regarding that factor to solve the strategic issue identified by us. For this
we have some alternatives from which we have taken one alternative to make Strategic
decision.

DECISIONS

1. INNOVATION COMES FROM ANYWHERE

It can come from the top down as well as bottom up, and in the places you least expect.
For example, a medical doctor on Google’s staff argued persuasively that Google had a
moral obligation to extend help to those typing searches under the phrase “how to commit
suicide.” He ignited the charge to adjust the search engine’s response so that the top of the
screen reveals the toll free phone number for the National Suicide Prevention Hotline. The
call volume went up by nine percent soon thereafter. The same change has been adopted in
many other countries.

2. FOCUS ON THE USER.

Worry about the money later, when you focus on the user, all else will follow. Google
improved the speed of its search capabilities with predictive analysis so search suggestions
come up after the user types a few keystrokes. This Instant Search feature saves the user a
few microseconds with each entry. Google sales reps were concerned that this shortened
the time customers would view ads, but the company went ahead and believed that it was
worth the risk.
3. AIM TO BE TEN TIMES BETTER

If you come into work thinking that you will improve things by ten percent, you will only
see incremental change. If you want radical and revolutionary innovation, think 10 times
improvement, and that will force you to think outside the box. For example, in 2004,
Google started its Google Books project and set forth a challenge to organize all the
world’s information and digitize all the books ever printed in history.

Google co-founder Larry Page built his own book scanner, and the initial process required
having someone manually turn its pages in rhythm, one at a time, according to the pace of
a metronome. Google has now scanned 30 million of the 130 million books they first set
out to scan, and dozens of libraries around the world are participating in the project.

4. BET ON TECHNICAL INSIGHTS

Every organization has unique insights, and if you bet on it, it leads to major innovation.
Google engineers, not the auto industry, came up with the idea of driverless cars after
seeing that millions of traffic deaths come from human error. Google already had all the
building blocks in place to build a self-driving car–Google Maps, Google Earth, and Street
View cars. Working with an artificial intelligence team at Stanford Universit y, Google
engineers have produced experimental cars that now have travelled to Lake Tahoe and
back to the Bay Area and have given the blind more independence by driving them to shop
and carry out errands.

5. SHIP AND ITERATE

Ship your products often and early, and do not wait for perfection. Let users help you to
“iterate” it. When Chrome was launched in 2008, every six weeks Google pushed out an
improved version. “Today, using that approach, Chrome is the Number One browser in
many countries,” says Kallayil, “You may not have perfection in your product, but trust
that your users will get back to you.”
6. GIVE EMPLOYEES 20 PERCENT TIME

Give employees 20 percent of their work time to pursue projects they are passionate about,
even if it is outside the core job or core mission of the company. “They will delight you
with their creative thinking,” Kallayil promises. At Google, engineers and project
managers have the freedom to set aside one day a week to work on a favorite idea. Many
can wind up as products or product improvements. Case in point: an engineer planning a
trip to Spain found that he could not get a close-up view of the hotel since the road was too
narrow for the Google Street View car to enter. He later adapted a Street View camera to
fit on a specially-made Google tricycle to go places too narrow for a car and tourist
locations that ban autos from approaching the premises.

7. DEFAULT TO OPEN PROCESSES

Make your processes open to all users. Tap into the collective energy of the user base to
obtain great ideas. When Google created the Android platform, it knew it could not hire all
the best developers on the planet. For that reason, it “defaulted to open,” and encouraged
developers outside of Google to create apps for the one billion people using Android
devices daily. In marketing, Google asked users how they would market its voice search
app, and children sent clever videos that rivaled the campaigns of the big ad agencies.

8. FAIL WELL

There should be no stigma attached to failure. If you do not fail often, you are not trying
hard enough. At Google, once a product fails to reach its potential, it is axed, but the
company pulls from the best of the features. “Failure is actually a badge of honor,” he
says. “Failure is the way to be innovative and successful. You can fail with pride.”

9. HAVE A MISSION THAT MATTERS

Everyone at Google has a strong sense of mission and purpose. We believe the work they
do has impact on millions of people in a positive way.
 IMPLEMENTATION

Most companies face significant challenges in terms of innovation. The products and services
that generate current income must be continually replaced by new and improved offerings to
customers. The advantage that many companies have in terms of skilled labor and a strong
market position is about to disappear as other nations, after radically increased investments in
education and research, are emerging not only as efficient goods producers but also as new
centers of knowledge and innovation.

We know with a high degree of certainty that the primary reason why large and previously
enviable companies lose steam and finally cease to exist is that they are not able to keep pace
with the rapid development that is now largely exponential rather than linear. To significantly
strengthen the capacity for innovation, it is necessary to take into account the increased
reliance on employees’ creative abilities and be prepared to challenge conventional
management and organisational models.

To summarize, the ability to be continuously innovative is critical for most companies today,
regardless of their industry. A management model that has shown to be both unorthodox and
successful in driving innovation is the Google model. The Google model is based on six
critical management principles, which have been applied to among other things Google’s
leadership, culture, HR/processes, and structure. These six principles, together with Google’s
practical applications of them could potentially be used as a platform for a totally new
management concept- not a Lean concept this time, but a concept for Management for
continuous innovation in a rapidly changing world.
 REFERENCES

1. Fitzpatrick, Alex (September 4, 2014). "Google Used to Be the Company That Did
'Nothing But Search'". Time.
2. ^ "When is Google's birthday – and why are people confused?". The Telegraph.
September 27, 2019. Archived from the original on January 10, 2022.
3. ^ Griffin, Andrew (September 27, 2019). "Google birthday: The one big problem with
the company's celebratory doodle". The Independent.
4. ^ Wray, Richard (September 5, 2008). "Happy birthday Google". The Guardian.
5. ^ "Company – Google". January 16, 2015. Archived from the original on January 16,
2015. Retrieved September 13, 2018.