Topic Name:
Google Inc. (2010): The
Future
of the Internet Search Engine
1
Current Situation
Current Performance:
1995
1. Founded by Larry
exceeded
Page and Sergey.
Brin.
2. Google.com was
registered
On 15 of Sept 2997.
2006
2010
1. Revenue
$29 billion
1.Net revenue becomes $10.6
billion
Cont
Mission:
1. Google's mission is to organize the world's information
and make it universally accessible and useful
Vision:
1. Organize Worlds Information & make it universally
accessible and useful.
2. Make it useful from desktop, laptop and even through
from mobile.
Corporate Governance
A. Board of Directors:
Alan Eustace
Senior Vice President, Knowledge
Salar Kamangar
Senior Vice President, YouTube & Video
Sridhar Ramaswamy Senior Vice President, Ads & Commerce
B. Top Management:
Larry Page
Eric E. Schmidt
Sergey Brin
CEO and Co-Founder
Executive Chairman
Co-Founder
External Environment
General Environment:
Political
Economic
Socio-cultural
Technological
Cont.
Political:
The bad political relations between US and the other
world have bad outcomes for the company.
7
Cont...
Economic:
Average age of internet users is about 25.
There is a gap on Internet connectivity in Urban
and rural areas.
Cont...
Socio-cultural:
Most users were young age group.
Internet users were the well-educated group.
Most of internet usage was concentrated around cities.
Cont
Technological:
Technology is obviously always improving and
Google has taken specific measures to make sure
it does not fall behind.
10
Cont
Industry Environment:
Threats of New Entrants .
Threat of Substitutes .
Rivalry among existing competitors.
Bargaining Power of Suppliers .
Bargaining Power of Customers.
11
Threats of New Entrants (Low)
Due to high barriers it is more difficult for new
competitor to enter into the market.
For a new company it will be very difficult to take
over such customer loyalty.
12
Threat of Substitutes (High)
A search engine would be based on the speed and
accuracy of the searching tools.
If skilled labor moves from one search generating
company to another so it can create huge losses.
13
Rivalry among existing
competitors(High)
Yahoo and Microsoft they are getting faster in
reaching the standards.
For the laws of online businesses have not yet been
defined properly so, the exploitation and
manipulation is easy.
14
Bargaining Power of Suppliers (Low)
Suppliers are different from different sectors so
competition level is too low.
High availability of supply.
15
Bargaining Power of Customers (Low)
89% of Googles revenues are derived from
advertising. However, no single account contributes
more than 3% to net revenue, and less than 5% of the
revenue is generated by any given network partner
site.
16
External Factor Analysis Summary(EFAS)
External Factor
Weight
Ratting
Weighted Score
O1. Growing number
of mobile internet users
20
100
O2. Obtaining patents
through acquisitions
15
60
O3. Google fiber
cables.
15
60
T1. Growing number of
mobile internet users
20
100
T2. Unprofitable
products
15
60
T3. Competition from
Microsoft
15
60
total
100
Treat
440
17
Comments
Internal Environment
Corporate Culture
Focus on global internet service provider.
Cost Efficiency.
Strong research and development department.
18
Internal Environment
Sales and Marketing
Reasonable Pricing : Introduce their product with
reasonable price.
Brand Loyalty : Always make it as a different
products compared to others
19
Internal Environment
Finance:
Total assets is USD $ 57,851 in million.
Annual revenue in USD $ 29,321 in million
Net income USD $ 8,505 in million.
20
Cont
Research and Development:
1. Google gives more focus on R&D to develop new products
and services each year.
2. Only R&D budget is $6.8 billion.
21
Core Competency
Unique to the enterprise.
Result from a mix of skill, resources and processes.
Invisible to competitors.
22
Internal Factor Analysis Summary(IFAS)
Internal Factor
Weight
Rating
Weighted Score
S1. Open source
products and services
20
100
S2. Financial situation
15
60
S3. Strong patents
portfolio
15
60
W1. Relies on one
source of income
20
100
W2. Unprofitable
products
15
60
W3. Patent litigations
15
60
Total
100
strengths
Weaknesses
440
23
Comments
(SFAS Table)
Strategic Factors
WEIGHT
RATING
WEIGHTED
SCORE
S1. Open source products and services
20
100
S2. Financial situation
15
60
W1. Relies on one source of income
20
100
W2. Unprofitable products
15
45
O1. Growing number of mobile internet users
20
100
O2. Google fiber cables.
15
60
T1. Growing number of mobile internet users
20
100
T2. Competition from Microsoft.
15
45
Total
610
SHORT
TERM
SHORT
TERM
LONG
TERM
Identification of strategic Issues(Tows Matrix)
Internal factors
Strength (S)
1. Open source products
and services
2. Financial situation
Weakness (W)
1. Relies on one source of
income
2. Unprofitable products
Opportunities (O)
1. Growing number of
mobile internet users
2. Google fiber cables.
SO Strategies:
Use financial position to
partner with more web
consoles and develop
mobile application.
WO Strategies:
Fiber industry can be another
source of money for the
company.
Threats (T)
1. Growing number of
mobile internet users.
2. Competition from
Microsoft.
ST Strategies:
WT Strategies:
Firm try to develop their
technology to catch the new
internet users.
External
factors
The firm must emphasize
efforts against the threats
of competition and
imitation
25
Strategic Alternatives & Recommendation
1. Use financial position to partner with more
web consoles and develop
mobile application.
Pros: Due to having innovative ideas they can capture more customer in the
market.
Cons: When they will work together then their believability will reduce and
it can be more harmful for the company next time.
2. The firm must emphasize efforts against the threats of
competition.
Pros: Help to beat the competitor and growth.
Cons: May effect in legal issue.
26
Cont
3. Fiber industry can be another source of money for the company.
Pros: Company can give more appearance to develop their technology.
Cons: Fiber industry has also many competitors.
4. Firm try to develop their technology to catch the new internet users.
Pros: Helps to enter the new market.
Cons: May effect on tradition.
27
Evaluation and Control
Mass-market portals can be harmful for Google's
independent growth.
They have a lot invest at R & D and have to be proactive in
order to compete with their competitors in the industry.
Google Should keep updating its technology and services
with the Same simplicity and comprehensiveness as it has
been since
28
