A report on

Google

Prepared by

Vispute Monali
(MMS 2018 – 2020)

General Management Project Report

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 Table of Contents

Introductiton to “Google.Inc”.............................................................................................. 3
PESTLE Analysis ............................................................................................................... 13
SWOT Analysis .................................................................................................................. 16
Marketing Mix .................................................................................................................... 24
Segmentation....................................................................................................................... 29
Targeting ............................................................................................................................. 32
Positioning ........................................................................................................................... 35
Ansoff’s Matrix ................................................................................................................... 37
BCG Matrix ........................................................................................................................ 42
Porter’s 5 Forces................................................................................................................. 46
Value Chain ........................................................................................................................ 52
Blue Ocean Strategy ........................................................................................................... 58
Global Impact/Strategy...................................................................................................... 62
Bibliography ....................................................................................................................... 64

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 INTRODUCTION TO “GOOGLE.INC”

Google is an American multinational technology company that specializes in Internet-related

services and products, which include online advertising technologies, search engine, cloud
computing, software, and hardware. It is considered one of the Big Four technology companies,
alongside Amazon, Apple and Facebook.

Google was founded in 1998 by Larry Page and Sergey Brin while they were Ph.D. students at
Stanford University in California. Together they own about 14 percent of its shares and control
56 percent of the stockholder voting power through supervoting stock. They incorporated
Google as a California privately held company on September 4, 1998 in California. Google
was then reincorporated in Delaware on October 22, 2002. An initial public offering (IPO) took

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place on August 19, 2004, and Google moved to its headquarters in Mountain View, California,
nicknamed the Googleplex. In August 2015, Google announced plans to reorganize its various
interests as a conglomerate called Alphabet Inc. Google is Alphabet's leading subsidiary and
will continue to be the umbrella company for Alphabet's Internet interests. Sundar Pichai was
appointed CEO of Google, replacing Larry Page who became the CEO of Alphabet.

The company's rapid growth since incorporation has triggered a chain of products, acquisitions,
and partnerships beyond Google's core search engine (Google Search). It offers services
designed for work and productivity (Google Docs, Google Sheets, and Google Slides), email
(Gmail/Inbox), scheduling and time management (Google Calendar), cloud storage (Google
Drive), instant messaging and video chat (Google Allo, Duo, Hangouts), language translation
(Google Translate), mapping and navigation (Google Maps, Waze, Google Earth, Street View),
video sharing (YouTube), note-taking (Google Keep), and photo organizing and editing
(Google Photos). The company leads the development of the Android mobile operating system,
the Google Chrome web browser, and Chrome OS, a lightweight operating system based on
the Chrome browser. Google has moved increasingly into hardware; from 2010 to 2015, it
partnered with major electronics manufacturers in the production of its Nexus devices, and it
released multiple hardware products in October 2016, including the Google Pixel smartphone,
Google Home smart speaker, Google Wifi mesh wireless router, and Google Daydream virtual
reality headset. Google has also experimented with becoming an Internet carrier (Google Fiber,
Google Fi, and Google Station).

Google.com is the most visited website in the world. Several other Google services also figure
in the top 100 most visited websites, including YouTube and Blogger. Google was the most
valuable brand in the world as of 2017, but has received significant criticism involving issues
such as privacy concerns, tax avoidance, antitrust, censorship, and search neutrality. Google's
mission statement is "to organize the world's information and make it universally accessible
and useful". The company's unofficial slogan "Don't be evil" was removed from the company's
code of conduct around May 2018, but reinstated by July 31, 2018.

Corporate identity
The name "Google" originated from a misspelling of "googol", which refers to the number
represented by a 1 followed by one-hundred zeros. Page and Brin write in their original paper
on PageRank: "We chose our systems name, Google, because it is a common spelling of
googol, or 10100 and fits well with our goal of building very large-scale search engines."

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The original Google logo was designed by Sergey Brin. Since 1998, Google has been designing
special, temporary alternate logos to place on their homepage intended to celebrate holidays,
events, achievements and people. The first Google Doodle was in honor of the Burning Man
Festival of 1998. The doodle was designed by Larry Page and Sergey Brin to notify users of
their absence in case the servers crashed.

Google has a tradition of creating April Fools' Day jokes. Its first on April 1, 2000 was Google
MentalPlex which allegedly featured the use of mental power to search the web. In 2007,
Google announced a free Internet service called TiSP, or Toilet Internet Service Provider,
where one obtained a connection by flushing one end of a fiber-optic cable down their toilet.

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Some Facts about Google

Google wasn’t always the world’s second most valuable brand. Long before it was a go-to
verb, it was an obedient digital dog, merely finding and retrieving stuff, playing fetch for
internet users over and over again.

Eventually the little G -- which started in 1995 as a Stanford University Ph.D. research project
-- grew into the big, $367 billion-dollar we know and love-hate today. No longer satisfied to
fetch links alone, the global tech colossus now chases meatier, more meaningful bones, like
nailing the fastest internet speeds on the planet, rendering human drivers obsolete and, NBD,
ending death.

Here are 19 surprising facts about Google:

1. Sergey Brin and Larry (Lawrence) Page met by chance:

Page, 22 at the time, having recently earned a computer engineering degree from the University
of Michigan, considers attending Stanford University for his Ph.D. Brin, then 21, already a
Ph.D. candidate at the prestigious institution, is assigned to show Page around campus. That
was back in 1995 and, as fate would have it, quite the momentous meeting of the minds.

2. Google was originally named BackRub:

In 1996, Page and Brin collaborated on a pioneering “web crawler” concept curiously called
BackRub. Some speculate that the early search engine’s nomenclature was a nod to retrieving
backlinks. BackRub, which linked to Brin’s and Page’s '90s-tastic original homepages, lived
on Stanford’s servers for more than a year, but eventually chewed up too much bandwidth.

3. Google is a play on the word “googol”:

On Sept. 15, 1997, over the BackRub title, Page and Brin registered the domain name of their
mushrooming project as Google, a twist on “googol,” a mathematical term represented by the
numeral one followed by 100 zeros. The name hinted at the seemingly infinite amount of data
the brainy pair code their fledgling search engine to mine, make sense of and deliver. Many
wondered if Google is a misspelling of Googol.

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 4. Google’s first doodle was a Burning Man stick figure:

The inaugural doodle was an out-of-the-office message that Page and Brin created in August
of 1998 to let people know they’d shipped off to the Burning Man festival. The future
billionaires positioned the iconic Man behind the second “o” in Google’s logo.

5. Google’s first office was a rented garage:

So stereotypical Silicon Valley start-up, right? Starting in September 1998, the company’s first
workspace was Susan Wojcicki’s garage on Santa Margarita Ave. in Menlo Park, California
Wojcicki, sister of 23 and Me founder Anne Wojcicki, is Google employee number 16. She
was Google’s first marketing manager and is now the CEO of YouTube. As for the house that
built Google, the tech titan bought it, because of course it did. Then it filled the suburban ranch-
style dwelling with candy, snacks and lava lamps.

6. A former caterer for The Grateful Dead was Google’s first chef:

In 1999, chef Charlie Ayers won a cook-off judged by Google’s employees, then only 40 in
all, to clinch the position, which he held for seven years. Ayers initially cooked for the Grateful
Dead in exchange for free admission to their legendary shows, but later took over catering for
the jam band. At Google, he eventually served 4,000 daily lunches and dinners in 10 cafés
throughout its Mountain View, Calif., global headquarters.

7. Google New York began at a Starbucks on 86th Street:

In 2000, Google unofficially kicked off its New York arm at a Starbucks in New York City. It
was helmed by a one-person sales “team.” Now, thousands of “NYooglers” clock-in at its
swanky, 2.9 million-square-foot New York office, a former Port Authority building on 111
8th Ave.

8. Swedish Chef is a language preference in Google search:

Gurndy morn-dee burn-dee, who knew? Yes, it’s true. In 2001, Google got in touch with its
inner yodelling Muppet and opened the gates for search queries and results in Swedish Chef
Lingo (called Bork Bork Bork, to be technical). Other “joke” languages you can tickle Google’s
algorithm with include: Elmer Fudd, Pirate, Klingon, Pig Latin and, of course, Hacker (a.k.a.
1337sp34k).

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 9. Gmail was launched on April Fool’s Day, no joke:

Toying with Silicon Valley’s longstanding tradition of pulling April Fool’s Day pranks, Google
unveiled Gmail on April 1, 2004, in a wackily-worded announcement that was widely
misconstrued as a hoax. It wasn’t Google Gulp. It was a brilliant double fake and the precursor
to a Google staple that now serves millions of users across the world every day.

10. Googlers ride colorful “gBikes” around the Googleplex:

Launched in 2007, Google’s Googleplex campus commuter bike program began as a modest
fleet of bright blue Huffys. Then came the goofy “clown bikes.” Now Googlers ride more than
1,000 primary-colored, basket-equipped beach cruisers, dubbed “gBikes,” around the two-mile
expanse that is Google Mountain View. Interestingly, none of the bikes have locks. Employees
simply “borrow” the nearest set of wheels. When they’re done, they drop them off conveniently
close to office entryways for other Googlers to use.

11. Google negotiated its acquisition of YouTube’s at Denny’s over mozzarella sticks:

“We didn’t want to meet at offices,” YouTube co-founder Steven Chen said, “so we were like,
‘Where’s a place that none of us would go?’” That place turned out to be a Denny’s in Palo
Alto, Calif. Mozzarella sticks were nibbled, hands were shaken. The 2006 landmark acquisition
was a Grand Slam for Chen and co-founders Jawed Karim and Chad Hurley. Not bad for the
time. Google doled out $1.65 billion for what would explode into the Internet’s most-watched
-- and most uploaded-to -- video platform.

12. Its leaders are in it for the long haul:

In 2008, Eric Schmidt, then the CEO of Google and currently the executive chairman of
Alphabet, told Fortune before the company went public in 2004 that the trio of Schmidt and
co-founders Larry Page and Sergey Brin agreed to work together for 20 years.

13. The early days of Google were not super glamorous:

Schmidt told LinkedIn co-founder Reid Hoffman during an interview for Hoffman’s Masters
of Scale podcast that the former CEO's first office at the company was an 8-by-12-foot space
that he shared with the company’s then VP of engineering, Amit Singhal.

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 14. The company helped fight fictional vampires:

The first instance of Google being used as a verb -- “to Google” something -- on television
occurred during an Oct. 15, 2002, episode of Buffy the Vampire Slayer.

15. Google has had a pet-friendly office since the beginning:

One of the company’s earliest employees was a friendly Leonberger named Yoshka, who came
to work with his owner, Google’s senior vice president of operations Urs Hoelzle.

16. It speaks many languages:

In 2000, French, German, Italian, Swedish, Finnish, Spanish, Portuguese, Dutch, Norwegian
and Danish were the first 10 language versions of the site to be available to the public.

17. Google image search launched in a big way:

The company rolled out Google Image search in 2001 with a whopping 250 million images for
users to peruse. Not bad for day one.

18. When it went public, Google was valued as much as General Motors:

The company sold 19,605,052 shares of stock for $85 per share. It was valued at $27 billion.

19. Google gave Mountain View the gift of free Wi-Fi:

In 2006, the company decided to provide Mountain View, the California town where its main
headquarters is located, with free city-wide Wi-Fi. While certainly generous, it likely just
meant that even more people were free to jump on the web and use the search engine.

20. Google consists of more than 450,000 servers racked up in clusters located in data
centres around the world.
21. Google processes approx. 20,000 Terabytes (TB) of data, which is growing every day.
22. Google hopes to index around 100 Petabytes (PB) of data in near future which would
be equivalent to half of all materials ever printed in the history of mankind.
23. Google’s storage capacity is bound to hit 1 Exabyte, the same as 50,000 years of DVD
quality video.
24. “Google” as a verb was added to the Merriam Webster and Oxford Dictionaries in 2006.

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Google’s Future Prospects

Google CEO Larry Page just published his annual founder’s letter for shareholders and, as
usual, it’s a fascinating glimpse into where Page thinks Google is going, how it’s going to get
there, and what the company will conquer in the future.

Sure, he mentions the usual things: search and email and being always logged in through
Chrome so that your stuff can be seamlessly accessed on a laptop, phone or even on your TV.

But there are also a couple of surprises in there. Here we quote five of them:

 Same day delivery:

“We’re excited about our new Google Shopping Express service, which is a great way to get
deliveries the same day you order them.” Shopping Express hasn’t been rolled out nationally
yet. It looks like a straight-up threat to Amazon.

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  Curing death:
“In healthcare we have Calico — a new company led by the former CEO of Genentech, Art
Levinson, that’s focused on health, well-being and longevity — and Iris, a smart contact lens
designed to transform the lives of people with diabetes.” The keyword there is “longevity.”
Page really believes that there is no need for humans to start dying “naturally” once they hit
their 80s.

 Good design:
“Now, none of this matters without good design. I remember taking a class at the University
of Michigan on usability. Students had to pick a program they knew really well (I chose an
email program) and estimate how long it would take experts to perform different tasks. It really
helped me understand that building good, efficient interfaces is hard, and a bit more like
engineering than you might think.

Another tab here, another drop-down menu there. The more choices you throw at people (even
if they never use them), the longer it takes them to get stuff done. People still talk about the
simplicity of the Google homepage, and that was a huge part of our original success. There’s
no reason the same principles can’t apply across our products, especially now, with so many
devices and options, and so much opportunity for distraction.” This is interesting because often,
Google’s products are ugly (think about Drive for instance). It’s also a page from Apple’s book.
When people think about tech design, they tend to think about Apple rather than Google —
Page seems to be aware design is an area Google needs to improve.

 Conversational, artificially intelligent search:

“Improved context will also help make search more natural, and not a series of keywords you
artificially type into a computer. We’re getting closer: ask how tall the Eiffel Tower is, and
then when ‘it’ was built. By understanding what ‘it’ means in different contexts, we can make
search conversational” For most people this isn’t going to seem like much, but making
computers handle human-style search requests in natural language patterns would be a huge
step forward in artificial intelligence and machine learning.

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  The 5 billion people who are not online:
“Of course, this all assumes you are one of the 2 billion people who have access to the
Internet. That leaves five billion other people. It’s a tragedy that with so much information
available today, two-thirds of the world’s population lack even the most basic Internet
connection.”

Google is a $60 billion-a-year company. To move that needle, it needs to find new businesses
that will generate billions, not millions, of new dollars. And that seems to mean finding billions
of new customers in developing countries where the internet doesn’t yet exist.

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 PESTLE ANALYSIS

A PESTEL analysis or PESTLE analysis (formerly known as PEST analysis) is a framework

or tool used to analyse and monitor the macro-environmental factors that may have a profound
impact on an organisation's performance. This tool is especially useful when starting a new
business or entering a foreign market.

Google’s PESTEL/PESTLE analysis

provides insights on the most
significant external factors in the
company’s remote or macro-
environment. These external factors
serve as opportunities or threats. Thus,
in using the PESTEL/PESTLE model,
this analysis of Google yields
information on the opportunities and
threats most important in the
company’s strategy formulation. To
keep its position as one of the world’s
most valuable company, Google must
address the biggest threat in its
remote/macro-environment.
Effectively doing so can boost the
company’s performance. Competitors can
also exploit the same opportunities identified in this PESTEL/PESTLE analysis. Thus, the
company must take action to use these opportunities for its competitive advantage. This
PESTEL/PESTLE analysis also helps investors understand the value of Google and the firm’s
position in the remote business environment.

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 1. Political Factors:

The political external factors influencing Google involve the activities of governments. In the
PESTEL/PESTLE analysis model, political factors partly determine the effect that
governments have on businesses. The following political factors are significant in Google’s
remote/macro-environment:

 Globalization (opportunity)
 Stable political climate in most of the major markets (opportunity)
 State-sponsored online companies (threat)

The political factors in Google’s external environment are mainly opportunities. Globalization
increases the demand for online advertising. The stable political climate in major markets
minimizes obstacles to the firm’s expansion. However, state-sponsored online companies pose
a threat against Google, as in the case of the Chinese government’s control of large firms in
China.

2. Economic Factors:

Google’s business is subject to economic changes. In the PESTEL/PESTLE analysis model,

economic external factors can change the market opportunities available to businesses. In
Google’s case, the following economic external factors are the most significant:

 Economic stability of most major markets (opportunity)

 Rapid growth of developing countries (opportunity)

These economic external factors present opportunities for Google. The economic stability of
major markets and rapid growth of developing countries create new momentum that Google
can exploit. The company can use these opportunities for global expansion.

3. Social/Sociocultural Factors:

Social or sociocultural external factors affect the way customers respond to Google’s products.
The PESTEL/PESTLE analysis model shows that these factors can present threats and barriers
to business. The following social/sociocultural external factors are the most significant in
Google’s remote/macro environment:

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  Increasing use of social media (threat)
 Rising diversity of users (opportunity)

The rise of social media usage is a threat to Google because it strengthens companies like
Facebook, which also offers online advertising services. The increasing diversity of users is an
opportunity for Google to improve its services to match individual preferences.

4. Technological Factors:

The technological nature of Google’s business means that technological external factors have
a major impact on the firm. The PESTEL/PESTLE analysis model considers technological
changes as potential makers or breakers of business. The following are the technological
external factors significant in Google’s remote/macro environment:

 Growing Internet access in developing countries (opportunity)

 Rapid adoption of mobile devices in the global market (opportunity)

Google faces significant opportunities based on these technological external factors. The
company can expect higher advertising revenues as developing markets become more
connected online. Also, Google can improve the mobile-friendliness of its online products to
exploit the mobile trend.

5. Ecological/Environmental Factors:

Even though Google generates most of its revenues online, the firm is subject to ecological or
environmental external factors. In the PESTEL/PESTLE analysis model,
ecological/environmental trends influence business strategic direction. The following are the
ecological external factors significant in Google’s remote/macro environment:

 Global spread of environmentalism (opportunity)

 Growing interest in sustainable business (opportunity)

Google has opportunities to address these ecological/environmental external factors. The main
idea is to improve the firm’s ecological/environmental impact. In this way, Google can expect
improved customer responses based on positive perceptions of the firm’s
ecological/environmental contributions.

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 6. Legal Factors:

Google must operate within legal limits. In the PESTEL/PESTLE analysis model, legal
requirements influence what firms can do. The following are the significant legal external
factors in Google’s remote/macro environment:

 More regulations on online privacy (opportunity)

 More regulations on intellectual property rights (opportunity)

Google can exploit the opportunities based on these legal external factors. For example, the
company can improve its privacy measures to protect individual users. Also, Google can
develop innovative measures to discourage people from violating intellectual property rights.

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Recommendations Based on Google’s PESTEL/PESTLE Analysis:

Google’s PESTEL/PESTLE analysis shows that most of the external factors in the firm’s
remote or macro-environment are opportunities. The company must focus on exploiting these
opportunities to maintain the company’s competitive advantage.

For example, Google can use its culture of innovation to develop capabilities, such as improved
responsiveness of Google products on mobile devices. In effectively addressing the
opportunities identified in this PESTEL/PESTLE analysis, Google can expect stronger
competitiveness and influence in the industry.

Applicability of the factors

The model's factors will vary in importance to a given company based on its industry and the
goods it produces. For example, consumer and B2B companies tend to be more affected by the
social factors, while a global defence contractor would tend to be more affected by political
factors. Additionally, factors that are more likely to change in the future or more relevant to a
given company will carry greater importance. For example, a company which has borrowed
heavily will need to focus more on the economic factors (especially interest rates).

Furthermore, conglomerate companies who produce a wide range of products (such as Sony,
Disney, or BP) may find it more useful to analyse one department of its company at a time with
the PESTEL model, thus focusing on the specific factors relevant to that one department. A
company may also wish to divide factors into geographical relevance, such as local, national,
and global.

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 SWOT ANALYSIS

SWOT analysis (or SWOT matrix) is a strategic planning technique used to help a person or
organization identify strengths, weaknesses, opportunities, and threats related to business
competition or project planning. It is intended to specify the objectives of the business venture
or project and identify the internal and external factors that are favourable and unfavourable to
achieving those objectives. Users of a SWOT analysis often ask and answer questions to
generate meaningful information for each category to make the tool useful and identify their
competitive advantage. SWOT has been described as the tried-and-true tool of strategic
analysis, but has also been criticized for its limitations.

Strengths and weakness are frequently internally-related, while opportunities and threats
commonly focus on the external environment. The degree to which the internal environment
of the firm matches with the external environment is expressed by the concept of strategic fit.
Identification of SWOTs is important because they can inform later steps in planning to achieve
the objective. First, decision-makers should consider whether the objective is attainable, given

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the SWOTs. If the objective is not attainable, they must select a different objective and repeat
the process.

The usefulness of SWOT analysis is not limited to profit-seeking organizations. SWOT

analysis may be used in any decision-making situation when a desired end-state (objective) is
defined. Examples include non-profit organizations, governmental units, and individuals.
SWOT analysis may also be used in pre-crisis planning and preventive crisis management.
SWOT analysis may also be used in creating a recommendation during a viability study/survey.

SWOT analysis can be used effectively to build organizational or personal strategy. Steps
necessary to execute strategy-oriented analysis involve identification of internal and external
factors (using the popular 2x2 matrix), selection and evaluation of the most important factors,
and identification of relations existing between internal and external features.

For instance, strong relations between strengths and opportunities can suggest good conditions
in the company and allow using an aggressive strategy. On the other hand, strong interactions
between weaknesses and threats could be analysed as a potential warning and advice for using
a defensive strategy.

Following is Google’s SWOT Analysis Report:

The global search engine has revolutionized the digital world. It has made life easier. All it
takes to gather information now is a click of the mouse. Google has continued to demonstrate
evolutionary strides with its game-changing operations.

It has completely transformed the global economy. Corporations, customers, consumers and
just about anyone can now easily access business information anytime and anywhere.

Strengths:

1. King of the Online Search: Google is the undisputed king of the online search engine
department. It processes nearly 2% of world queries.
2. Vast Market share: Currently, Google has over 28% of the market share of desktop
searches worldwide.
3. Unbeatable: Till Now, No competitor has come close to challenging its position let
alone reaching its shares.

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 4. Biggest Traffic Generator: Every month, this powerful brand produces more than 1.2
billion hits. It is the biggest traffic generator and has a clear advantage over its
competitors such as Bing, Yahoo, Baidu.
5. High Revenue: The huge revenue (2017) of 65 billion dollars that Google has garnered
through multiple partnerships with different sites has ensured its growth.
6. Adaptability: Google’s has successfully adapted mobile and android technologies,
giving it potential to compete directly with Apple’s iPhone.

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Weaknesses:

1. Privacy policies: Google has been slammed by many experts for its excessive reliance
on privacy, especially when it comes to hiding information about algorithms. The
company has since taken steps to address the allegations.
2. Decline in market shares: According to data gathered from e-marketer, Google’s
digital ad revenue is expected to see a decline in market shares of about 37.2% in 2018
38.8% in 2017. This is because of the ongoing economic recession and growing
competition from Facebook.
3. Excessive Advertisement: Google’s overdependence on advertising has increased
speculations regarding the company’s future. The company made 86 % of total revenue
from its advertisement related projects. Experts suggest that a potential change in
revenue would damage the company significantly.
4. Boycott of Google and Youtube by Major Advertisers: Major brands boycotted
against Google and Youtube when they discovered that their ads were running
alongside extremist, hate-filled content. It has negatively affected Google’s image. The
companies that boycotted against the search engine and video platform included
Johnson & Johnson, AT&T, and Verizon in the U.S, L’Oreal, HSBC, RBS, the BBC,
the Guardian newspaper, British retailer Marks & Spencer, Lloyd’s of London in U.K,
and Audi, Havas, Tesco, Volkswagen, Sainsbury. In addition to these brands, even the
British government boycotted.

Opportunities:

1. Android OS: The most substantial opportunity for Google is its noticeable efforts in
the Android Operating System provision. This has strengthened its prospects to directly
compete with Apple iOS.
2. Non- Ad Business Model: Google needs to undertake a diversification process and aim
to build a non- Ad Business Model accordingly. It needs to pursue adaptability by
committing itself to more commercial transactions. It will ensure sustainable revenue.
3. Google Glasses and Google Play: Google is prepared to market its newly introduced
Google Glasses and Google Play. It can boost Google’s progress and development.
4. Cloud computing: With its storage and cloud solutions, cloud computing can play a
vital role in Google’s marketing enterprise. In January 2018, Google introduced a new
digital store, which offers cloud-based software to all organizations. In line to this, the

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 company collaborated with MobileIron, Inc., to integrate its cloud Orbitera commerce
platform with MobileIron’s app distribution, security, and analytics capabilities.

Threats:

1. Gender Bias: A Google memo published by its employer James Damore highlighting
its diversity policy has sparked a strong debate regarding the issue of gender bias and
free speech in the company.
2. Alteration of Information: Google has received considerable criticism over its alleged
collaboration with China over a censored search engine project (Dragonfly).
3. Antitrust Controversies: Google has been involved in antitrust controversies for years
by both US and EU lawmakers. The EU antitrust regulators imposed a 5 billion Euro
fine which Google has sought to challenge.
4. Censorship Policy: Google has not managed to protect itself from backlash over its
censorship policy. Many whistle-blowers have begun leaking formation over its
political, ideological leanings.

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Conclusion:

The SWOT analysis of Google shows the strengths, weaknesses, opportunities, and threats of
the biggest online search engine. The popularity of Google allows it to enjoy huge profits.

The search engine keeps on growing every year and keeps on improving its technology. If
Google addresses its weaknesses and threats, no other competitor can outperform or even
match this company.

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 MARKETING MIX

Google’s search engine indexes billions of pages and gives the search speedy results. The
engine ranks websites organically regarding links into a page as a positive endorsement or vote.
So if people like your pages they will link to them and the page will get a better rank than sites
with fewer in-links.

Larry and Sergey are now worth an estimated $6 billion. Their story is synonymous with
Google’s history. They were brilliant computer science students. They met when Sergey was
helping out at a student open day and Larry was one of the prospective students. They became

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good colleagues although rumour has that they used to debate quite a lot. Eventually they
worked together to build some software that could be used to search the internet. They touted
it around the early search engine companies of the time but none of them had the enthusiasm
that matched that of Larry and Sergey. So they decided to start their own company called
‘Google.’ Their competitive advantage was that the search engine would give objective and
useful results – quickly.

Google Marketing Mix

Google is a search engine. Search engines are used to search the Internet. However Google is
much more than a search engine – it’s a global company that specializes in innovation and
technology. The business focuses on information made up mainly from web pages, although
today all information is absorbed by the Google sponge including books, videos and music.
Let’s not take the search engine for granted – masses of information is available to everyone
and we all have the potential to develop our own knowledge and learning.

1. Product:

 Google’s income is made through advertising. When a consumer types in a keyword

such as ‘contact lenses’ the search engine will display natural or ‘organic’ results – as
it would for any search term. However you will notice that at the top and/or along the
right hand side of the results, there are a series of advertisements. These advertisements
are paid for by companies. The advertising program is called Google AdWords. See
‘price’ below.
 Google has a relationship with a number of libraries around the world. One of its goals
is to digitize as many books as possible and to include them in search result. This could
mean that all books are available to everybody. The key problem with this initiative
(apart from the enormity of the task) is that Google does not own the rights to all books
– the writers and the copyright owners do, and they are not happy. One of those
participants is Stanford University.
 Google is the world’s most popular search engine.
 Google Earth enables users to view the world from space. That’s a real opportunity for
you and me to experience something that our ancestors never did. However there could
be security implications. Like any information – it can be used for good or bad. Anyway
you’ll notice that the pictures are often dated and taken some time ago. Privacy is also

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 an issue – do you want a satellite taking pictures of your home for the world to see? In
2009 they launched a revised version of Google Earth which includes the opportunity
to view 3D oceans.
 Critics argue that Google is a tool for plagiarism. Plagiarism is essentially cheating by
passing off the work of others as your own when submitting assessments at school,
college and university. It is the same as copying and is often punished.
 Google Scholar – which supports a broad trawl of material such as peer reviewed
journals, thesis and other academic material.
 iGoogle – a personalized Google page.
 The ever evolving list of products includes Google finance, Google news, Google blog
search, Google video, YouTube, Google sites, Blogger, Orkut, Google Reader, Google
Groups, Google Calendar and Google Docs.
 In 2008 Google Chrome was launched. Google Chrome is an open source browser.

2. Price:

 How does Google make money? Through a special advertising program called
AdWords. AdWords (see ‘product’ above) are keyword-based advertisements that are
bought by companies. So if you have a company that distributes contact lenses, you
would bid against other distributors of contact lenses for the highest place (or nearby).
By bidding for lucrative keywords this raises the price and Google make money. It’s
rather like selling a rare item on eBay; the rarer it is the more money you make; the
more bidders that compete for the item the more money you make. Hence the more
valuable a keyword the more it will make. Advertisers are making more than their
investment in advertising, and this makes it an appealing program for business. It is
measurable using basic software so advertisers can work out how much they are making
on their investment, which is more complex to do with traditional advertising media.
 Click fraud is a potential problem with AdWords. Every time you click on an advert
Google gets paid by the advertiser. Sometimes competitors will fraudulently click on
your advert and this is theft, or fraud. Google has many ways of tackling this and click
fraud is less of a problem today.

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 3. Place:

 The company is located at Mountain View in California. The site looks very much like
a university campus with gyms and cafes. The environment enables employees to
maximize their time. The Googleplex is the name given to its HQ.
 Another way of looking at place is that Google is an online business i.e. it distributes
using the internet as its channel.

4. Promotion:

 Google uses AdWords itself. Often you’ll see adverts with a link to Google’s own
services.
 They include flyers inside business magazines.
 They use money off promotions to incentivize advertisers to use AdWords e.g. free $20
worth of advertising.
 Google Chrome has its own TV advert.
 Google has a Public Relations function that it uses to proactively manage media.
 Google will sponsor a $30 million competition for an unmanned lunar landing. The
winner must land a rover on the moon; the rover should travel 500 metres, and then
send back a video to Earth.

5. Process:

 Google retains your search term. It collects data on searches to help to refine the search
algorithm. So don’t think that you search anonymously. Google keeps your search
terms and can link them to the address of your computer, and then to you. Whilst Google
may not wish to spy on you, governments may take an interest in searching habits and
this is a civil liberties issue.
 If you use Google mail (Gmail) or Google calendar then you are giving even more
information about yourself to Google.
 Google co-operates with the Chinese government in its censorship of certain search
terms and results. Is it becoming a political animal, or just maximizing a business
opportunity?

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 6. Physical Evidence:

 The name Googol means a number followed by 100 zeros. However the founders
mistakenly registered Google as their domain name.
 The company is located at Mountain View in California (see ‘place’).

7. People:

 In 2008, Google employed 20,000 people.

 Many of the original employees of Google came from Stanford and other elite US
universities. It employs the top brains, and people like working together Google’s
innovative business culture. Employees are encouraged to take advantage of 20% time
– that’s one day every week working on their personal pet project. They play sports at
lunchtime, with Larry and Sergey enjoying roller hockey in the early days.
 Its motto is ‘Don’t be evil.’ This comes from its informal, collegiate origins. Google
can be a success without losing its integrity. However search engines are based upon
algorithms which are loaded with choices about what to value and what to
include/exclude.

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 SEGMENTATION

Market segmentation is the activity of dividing a broad consumer or business market, normally
consisting of existing and potential customers, into sub-groups of consumers (known as
segments) based on some type of shared characteristics.

The overall aim of segmentation is to identify high yield segments – that is, those segments
that are likely to be the most profitable or that have growth potential – so that these can be
selected for special attention (i.e. become target markets).

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Market segmentation is not only designed to identify the most profitable segments, but also to
develop profiles of key segments in order to better understand their needs and purchase
motivations.

Market Segmentation, also known as customer segmentation, is a strategy that separates an

immense target market into consumer subsets who all share similar priorities and needs. It
allows companies to pinpoint their advertising towards specific groups of people, which in
turn, allows for the sensible allocation of marketing resources. There are an array of factors
surrounding customer segmentation. Google Analytics and Facebook Audience Insights are
amazing tools that allow you to better use these factors by understanding the interests,
demographics, and geography of your target markets.

In 2013, much to the delight of marketers across the world, Google Analytics was created. The
data that Alphabet, Google’s parent company, provides is advertising gold and a great
beginning point for customer segmentation. The platform includes many helpful metrics, such
as:

 Bounce Rate:

Helps you identify which group of people continues leaving your site in herds.

 Pages/Session:

Similar to Bounce Rate, this metric allows you to identify which pages are causing customers
to leave.

 Percent New Sessions:

Determine whether you have successfully targeted a new demographic.

 Average Session Duration:

Uncover which demographic of customers spend the largest amount of time on your website.

Understanding your clients’ interests beyond your own niche is a crucial part of market
segmentation. Through Google Analytics Interests section, three primary categories are
provided help you group users:

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  In-Market Segment:

Allows you to see what other items your customers are likely to buy, such as cutlery.

 Affinity Category:

Categorizes users based on an array of activities.

 Other Category:

Visualizes which categories users are additionally interested in.

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 TARGETING

Targeting refers to choosing certain groups identified as a result of segmentation to sell

products and services.

A target market is a group of customers within a business's serviceable available market at

which a business aims its marketing efforts and resources. A target market is a subset of the
total market for a product or service.

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The target market typically consists of consumers who exhibit similar characteristics (such as
age, location, income or lifestyle) and are considered most likely to buy a business's market
offerings or are likely to be the most profitable segments for the business to service.

The choice of a suitable target market is one of the final steps in the market segmentation
process. The choice of a target market relies heavily on the marketer's judgement, after carrying
out basic research to identify those segments with the greatest potential for the business.

Occasionally a business may select more than one segment as the focus of its activities, in
which case, it would normally identify a primary target and a secondary target. Primary target
markets are those market segments to which marketing efforts are primarily directed and where
more of the business's resources are allocated, while secondary markets are often smaller
segments or less vital to a product's success.

Highlighting the importance of booming Indian internet market, global giant Google has
announced three goals that will drive its services in India. Google made the announcement
during Google for India Event today.

The three goals are -- "Making internet work for more Indians; Making Google's products
relevant to Indians; and Taking the best of India to the rest of the world". The goals are part of
Google's plan to target every Indian.

Here are some of the key points from Google’s three goals plan:
1. Making the internet work for more Indians:

 Moving from keyboard to smartphone internet:

After internet at railways stations across India, Google will now provide high-quality internet
access to secluded areas. Google Station will collaborate with Andhra Pradesh to cover over
12,000 villages covering 1 crore population.

 Cheaper Android Go:

Google has partnered with phone makers like Micromax, Lava, Nokia and Transsion to create
Android (Go edition) at suitable prices. Samsung will launch its first ever Android (Go edition)
device, the J2 Core early next month.

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  Read webpage feature:

Google will launch a new feature in Google Go that will let people listen the webpages. It will
support 28 languages including Hindi, Bengali, Malayalam, Marathi and Tamil — even on
slow 2G internet.

2. Making products relevant to Indians:

 Editable PDF:

Under project Navlekhā, a tool will render any PDF containing Indian language content into
editable text with the help of AI. It will make it easy for print publishers to create mobile-
friendly web content. They will be able to also monetise their content as Google aims to provide
publishers with free web hosting with AdSense support.

 Enhanced Language support:

Search feed will now display one's favourite news from both English and Hindi sources, using
AI that learns what type of stories one likes the best.

 Turn by turn navigation on Google Maps:

With turn-by-turn navigation functionality, Google Maps will now also give better guidance to
public transport riders, informing them of upcoming stops and sending alerts when to get off.
It also partners with RedBus to add more than 20,000 inter-city bus routes in 1,500 cities.

3. Taking the best of India to the rest of the world:

 Google Tez is now Google Pay:

The relaunched app will allow users to avail pre-approved loans without any documentation.

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 POSITIONING

Positioning refers to the selection of the marketing mix the most suitable for the target customer
segment.

Positioning refers to the place that a brand occupies in the minds of the customers and how it
is distinguished from the products of the competitors. In order to position products or brands,
companies may emphasize the distinguishing features of their brand (what it is, what it does
and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian
or luxurious, entry-level or high-end, etc.) through the marketing mix. Once a brand has
achieved a strong position, it can become difficult to reposition it.

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Primarily, positioning is about "the place a brand occupies in the mind of its target audience".
Positioning is now a regular marketing activity or strategy. A national positioning strategy can
often be used, or modified slightly, as a tool to accommodate entering into foreign markets.

The positioning concept became very influential and continues to evolve in ways that ensure it
remains current and relevant to practising marketers.

Google uses the following types of positioning:

 Multi-segment positioning:

The company offers a wide range of products and services such as Search, Android, Maps,
Chrome, YouTube, Google Play, and Gmail that target multiple customer segments

 Standby positioning:

Certain products within Alphabet portfolio such as robotics, Waymo self-driving cars, Lunar
XPRIZE space exploration program, 3D mapping and others may not have a clear target
customer segment at this stage. Nevertheless, these products and projects are awaiting changes
in the market for the demand to emerge.

 Imitative positioning:

Google has used imitative positioning in a few instances. The launch of Chrome browser to
imitate then-market leader Internet Explorer and the launch of G+ social networking site to
imitate Facebook.

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 ANSOFF’S MATRIX

The Ansoff Matrix is a strategic planning tool that provides a framework to help executives,
senior managers, and marketers devise strategies for future growth. It is named after Russian
American Igor Ansoff, an applied mathematician and business manager, who created the
concept.

Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on
whether it markets new or existing products in new or existing markets. The output from the
Ansoff product/market matrix is a series of suggested growth strategies which set the direction
for the business strategy.

Growth strategies

Ansoff, in his 1957 paper, provided a definition for product-market strategy as “A joint
statement of a product line and the corresponding set of missions which the products are
designed to fulfil”. He describes four growth alternatives for growing an organization in
existing or new markets, with existing or new products.

Each alternative poses differing levels of risk for an organization:

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 1. Market penetration:

In market penetration strategy, the organization tries to grow using its existing offerings
(products and services) in existing markets. In other words, it tries to increase its market share
in current market scenario. This involves increasing market share within existing market
segments. This can be achieved by selling more products or services to established customers
or by finding new customers within existing markets. Here, the company seeks increased sales
for its present products in its present markets through more aggressive promotion and
distribution.

This can be accomplished by:

 Price decrease
 Increase in promotion and distribution support
 Acquisition of a rival in the same market
 Modest product refinements

This is the least risky growth option.

2. Market development:

In market development strategy, a firm tries to expand into new markets (geographies,
countries etc.) using its existing offerings and also, with minimal product/services
development.

This can be accomplished by:

 Different customer segments

 Industrial buyers for a good that was previously sold only to the households;
 New areas or regions of the country
 Foreign markets.

This strategy is more likely to be successful where:

 The firm has a unique product technology it can leverage in the new market
 It benefits from economies of scale if it increases output
 The new market is not too different from the one it has experience of

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  The buyers in the market are intrinsically profitable.

This additional quadrant move increases uncertainty and thus increases the risk further.

3. Product development:

In product development strategy, a company tries to create new products and services targeted
at its existing markets to achieve growth. This involves extending the product range available
to the firm's existing markets. These products may be obtained by:

 Investment in research and development of additional products;

 Acquisition of rights to produce someone else's product;
 Buying in the product and “badging” it as one’s own brand;
 Joint development with ownership of another company who need access to the firm's
distribution channels or brands.

This also consists of one quadrant move so is riskier than Market penetration and a similar risk
as Market development.

4. Diversification:

In diversification an organization tries to grow its market share by introducing new offerings
in new markets. It is the most risky strategy because both product and market development is
required.

 Related Diversification— there is relationship and, therefore, potential synergy,

between the firms in existing business and the new product/market space.
 Unrelated Diversification- This is otherwise termed conglomerate growth because the
resulting corporation is a conglomerate, i.e. a collection of businesses without any
relationship to one another. A strategy for company growth by starting up or acquiring
businesses outside the company’s current products and markets.

Diversification consists of two quadrant moves so is deemed the riskiest growth option.

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 Google’s Ansoff’s Matrix:

1. Market penetration:

Market penetration strategy is centered on the existing product is already established market.
It aims at stimulating growth and increase the market share. Market penetration uses minimum
resources and thus provides minimum risk of penetration.

Initially, Google entered the US market with search engine and it used the penetration strategy
and has already captured a big market share. The products allowed business to put
advertisement on Google search. Since then the company has introduced numerous other
product thus creating a strong brand, with the aim of attracting more customer. By simply
maintaining their market share, will lead to growth.

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40 | P a g e s t s
s
 2. Market development:
To this end Google has opened offices in other places. Google continue to use market
development strategy by opening their offices in a different part of the world. Google
understand that by increase in number of internet users will in turn bring more users to them.
The company has thus encouraged free internet access with citywide Wi-Fi. Also, it has
developed many product to attract the users to use Google, this in turn promote their
advertisement space thus increase their revenue. Most of these products are offered for free.
Their products are more about gathering information from their customers. This enables the
company to give relevant search and eventually it will able to personalize it advertisement
according to customer’s hobbies and interest. Personalized advert is the dream of every
advertising company. This will give them a competitive edge and increase their market share.

3. New Product development:

New Product development focuses on bringing a new product to existing business market. Over
the years, Google has improved their search engine technology. They have added more features
that will make their engines more users friendly. Google has developed more products such as
maps, Picasa, earth, docs, etc. by making such products available cheaply they meet wide range
of customers wants. This will make them dominate the world markets.
4. Product Diversification:
Another strategy put forward by Ansoff, is diversification. The strategy in evolves developing
new products for completely new and unfamiliar market. The company does this by
diversification, alliance and acquisition. Through acquisition, Google has diversified to other
product such as docs, earth and Youtube. The company then launched AdWord; this was a new
product for new market.

These products have expanded the company’s brand and brought the previous user of such
company to Google. Organization such as open social aims to capitalize on alliance. Open
social allow developers to create applications that will work on all the member companies. By
allowing all the developer to use API, Google aims to compete with social networking site such
as Facebook.

Google understood the benefit of diversification. It is always ready to explore new

opportunities has invested in research.

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 BCG MATRIX

BCG matrix is a framework created by Boston Consulting Group to evaluate the strategic
position of the business brand portfolio and it’s potential. It classifies business portfolio into
four categories based on industry attractiveness (growth rate of that industry) and competitive
position (relative market share). These two dimensions reveal likely profitability of the
business portfolio in terms of cash needed to support that unit and cash generated by it. The
general purpose of the analysis is to help understand, which brands the firm should invest in
and which ones should be divested.

The growth–share matrix (aka the product portfolio matrix, Boston Box, BCG-matrix, Boston
matrix, Boston Consulting Group analysis, portfolio diagram) is a chart that was created by
Bruce D. Henderson for the Boston Consulting Group in 1970 to help corporations to analyse
their business units, that is, their product lines. This helps the company allocate resources and
is used as an analytical tool in brand marketing, product management, strategic management,
and portfolio analysis. Some analysis of market performance by firms using its principles has
called its usefulness into question.

Relative market share: One of the dimensions used to evaluate business portfolio is relative
market share. Higher corporate’s market share results in higher cash returns. This is because a
firm that produces more, benefits from higher economies of scale and experience curve, which
results in higher profits. Nonetheless, it is worth to note that some firms may experience the
same benefits with lower production outputs and lower market share.

Market growth rate: High market growth rate means higher earnings and sometimes profits
but it also consumes lots of cash, which is used as investment to stimulate further growth.
Therefore, business units that operate in rapid growth industries are cash users and are worth
investing in only when they are expected to grow or maintain market share in the future.

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There are four quadrants into which firms brands are classified:

1. Stars:
 It has a large market share in a fast growing industry.
 Stars generate large amounts of cash because of their strong relative market share, but
also consume large amounts of cash due to their high market share.
2. Question mark (Problem child):
 It has a small market share in a high growth market.
 Question marks are growing rapidly and thus consume large amounts of cash, but
because they have low market shares they do not generate much cash.
 It has the potential to gain market share and become a star and eventually a cash cow
when the market growth slows.
3. Cash Cows:
 It has a large market share in a mature, slow growing industry.
 As leaders in a mature market, they exhibit a return on assets that is greater than the
market growth rate and thus, generate more cash than they consume.
 Such business units should be “milked”, extracting the profits and investing as little as
possible.
4. Dogs:
 It has a small market share in a mature industry.
 A dog may not require substantial cash because dogs have low market share and a low
growth rate and thus neither generate nor consume a large amount of cash.

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 BCG Matrix for Google:

1. Google’s Star:
The aim of all the acquisitions is clearly to become Stars, those businesses that surpass the old
business and Google into new areas. Gmail or Google Docs and YouTube are the current
successes – but none of them make any money, in fact YouTube would be spectacularly
bankrupt if it wasn’t for massive subsidies.
Stars have to make money eventually – very large services that lose money are a milestone
around any company and may well attract regulatory attention for being anti-competitive.
So right now, these aren’t real Stars given their unprofitability they are more like black holes.
So, Google has to engineer something more.
2. Google’s Cash Cow:
The Search-Ad business and at the moment makes all the profit earns – they have a very large
(dominant) market share, but over the time it is a slowing market (relative to the rapid growth
of technology sectors and under increasing competitive pressure).

They are thus doing what every company is advised to do in this position, i.e to invest their
surplus in faster growing industries and so keep up the pace. To this end their rate of acquisition
has been phenomenal, not leat because – by and large – their ability to launch teir own
successful products has so far been pretty lacklustre.

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 3. Google’s Question Mark:
Most of Google’s acquisitions tend to be in the Question Mark camp – small market shares but
in rapidly growing markets. No doubt the strategic thinking is that the Google infrastructure
will be able to rapidly ramp up to growth of these small companies. In the past, Google has
been quite good at this and refined the offerings before finally launching – problem is that by
and large it hasn’t worked more recently and many of the acquisitions have withered.

4. Google’s Dogs:

These are plays that lose market share and/or the sector declines. Google places some bets early
so the sector fizzles out, which is fine – low cost option plays are a creditable achievement.
The problem is when too many Google acquisitions look like Jaiku – it was a decent competitor
to Twitter but died as Twitter exploded, forcing Google into some far more high cost/high risk
plays (such as Buzz) later in the day. Chrome could be a dog – the browser market is mature,
they have a low market share – if eth current consumer Ad campaign doesn’t massively
increase market share then it’s likely to be another failure.

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 PORTER’S FIVE FORCES

Porter five forces include three forces from ‘horizontal’ competition–the threat of substitute
products or services, the threat of established rivals, and the threat of new entrants–and two
others from ‘vertical’ competition–the bargaining power of suppliers and the bargaining
power of customers.

 Profitable industries that yield high returns will attract new firms. New entrants
eventually will decrease profitability for other firms in the industry.
 A substitute product uses a different technology to try to solve the same economic need.
 The bargaining power of customers is also described as the market of outputs: the
ability of customers to put the firm under pressure, which also affects the customer’s
sensitivity to price changes.
 The bargaining power of suppliers is also described as the market of inputs. Suppliers
of raw materials, components, labour, and services (such as expertise) to the firm can
be a source of power over the firm when there are few substitutes.
 For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry.

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 1. Competitive Rivalry:
 Sustainable competitive advantage through innovation.
 Competition between online and offline companies.
 Level of advertising expense
 Firm concentration ratio
2. Bargaining power of buyers/customers:
 Buyer switching costs
 Buyer information availability
 Availability of existing substitute products
 Buyer price sensitivity
3. Bargaining Power of Suppliers:
 Supplier switching costs relative to form switching cost.
 Degree of differentiation of inputs.
 Impact of inputs on cost and differentiation.
4. Threat of Substitutes or Substitution:
 Buyer propensity to substitutes
 Buyer’s switching cost
 Number of substitute products available in the market
 Ease of substitution
5. Threat of New Entrants:
 The existence of barriers of entry
 Cost disadvantages independent of size
 Economies of scale
 Product differentiation
 Brand equity

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The Five Forces in Google’s external/industry environment can be summarized as follows:

1. Strong competitive rivalry or competition

2. Weak bargaining power of buyers
3. Weak bargaining power of suppliers
4. Moderate threat of substitutes or substitution
5. Moderate threat of new entrants or new entry

1. Competitive Rivalry or Competition:

Google experiences the strong force of competitive rivalry or competition. Under Porter’s Five
Forces model, competitive rivalry limits the growth capabilities of firms. Google must consider
the following external factors that contribute to such strong competitive rivalry:

 Large number of firms (strong force)

 High diversity of firms (strong force)
 Low switching costs (strong force)

Google has many competitors, such as Yahoo, Bing, Apple, Comcast, and others. Because of
the diversity of its products, Google also has a diverse set of competitors. The company now
offers Google Glass, Google Fiber and Chromecast, while the Google driverless car is under
development. This condition exerts a strong force on Google’s business. Customers experience
low switching costs because it is easy for them to move from Google to other companies. Thus,
the low switching costs exert a strong force on the firm.

There are also vertical search engines and e-commerce websites, such as Amazon and eBay (e-
commerce), Kayak (travel queries), LinkedIn (job queries), and WebMD (health queries).
Some users will navigate directly to such content, websites, and apps rather than go through
Google.

Social networks, such as Facebook and Twitter also belong to the list of Google competitors.
Some users are increasingly relying on social networks for product or service referrals, rather
than seeking information through traditional search engines. Providers of digital video services,
such as Facebook, Netflix, Amazon, and Hulu also compete with Google’s YouTube. As

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illustrated in figure below, despite the fierce competition in Google’s core search business, the
company has a market share of over 85% and maintains a clear leadership in the global scale.

2. Bargaining Power of Buyers:

The bargaining power of buyers is weak in influencing Google’s business. In Porter’s Five
Forces analysis model, such a weak external force is only minimally considered in strategic
decisions. The following external factors contribute to the weak bargaining power of buyers on
Google:

 Small size of individual buyers (weak force)

 High and increasing demand from buyers (weak force)
 Moderate quality of information (moderate force)

Each buyer makes only a small contribution to the revenues of Google, thereby exerting only
a weak force on the company. Because of the high and increasing demand for products from
Google and other competing firms, individual buyers exert only minimal influence on the
company. The moderate quality of information refers to the limited knowledge of customers.
For example, advertisers may access Google’s analytics data but such data is still limited in

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informing the advertisers about the dynamics and complexity of the online advertising
environment.

3. Bargaining Power of Suppliers:

Google experiences the weak power of suppliers. In Porter’s Five Forces analysis model, the
bargaining power of suppliers is weak when there are many suppliers to choose from. The
following external factors are the ones that contribute to the weak effect of suppliers on Google:

 High availability of supply (weak force)

 Large population of suppliers (weak force)

The high availability of supply in combination with the large population of suppliers minimizes
the effect of the bargaining power of any single supplier on the business of Google. This means
that it is relatively easy for the company to move from one supplier to another. Google’s
suppliers are diverse because the company has a diverse array of products, such as Google
Search, Google Glass, and Google Fiber, among others.

4. Threat of Substitutes or Substitution:

Google experiences the moderate threat of substitutes or substitution. These substitutes include
other advertising channels, such as television, radio, and print media. Google must consider
the following external factors that contribute to the moderate threat of substitutes/substitution:

 Low switching costs (moderate force)

 Moderate to high availability of substitutes (moderate force)

The low switching costs make it easy for customers to move from Google’s advertising services
to the substitute services. In Porter’s Five Forces analysis model, this condition exerts a
moderate force on the company’s business. Also, the moderate to high availability of
substitutes means that customers have considerable options in case they want to move away
from Google. The overall impact of these external factors is the moderate threat of substitution
against Google’s products.

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 5. Threat of New Entrants or New Entry:

The threat of new entrants (new entry) is moderate in influencing Google’s business. These
new entrants can be new ventures or investments of large technology companies, as well as
start-up companies offering products similar to Google. In Porter’s Five Forces analysis model,
the following external factors contribute to the moderate threat of new entrants/new entry
against Google:

 Moderate cost of doing business (moderate force)

 High cost of brand development (weak force)
 Easily fulfilled regulatory requirements (strong force)

The moderate cost of doing business means that a considerable number of start-up companies
and other firms can enter the market and directly compete against Google. Also, it is easy to
satisfy regulatory requirements, thereby also making it easy for new entrants to get established
and compete against Google. However, the cost of brand development is high. As a result,
many start-up companies might find it difficult to sustain their operations in the long term,
especially because Google already has one of the most valuable brands in the world.

Recommendations:

Based on the Porter’s Five Forces analysis on Google’s business, competitive rivalry or
competition exerts the strongest force on the company. The external factors of the threat of
substitutes (substitution) and the threat of new entrants (new entry) are only moderate
considerations in Google’s industry environment. The bargaining power of buyers and the
bargaining power of suppliers are minimally significant external factors. This Five Forces
analysis shows that Google should focus on addressing the strong force of competition.

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 VALUE CHAIN ANALYSIS

A value chain is used to describe all the business activities it takes to create a product from
start to finish (e.g., design, production, distribution, etc.). And a value chain analysis gives
businesses a visual model of these activities.

With this analysis, you can take steps to create a competitive advantage, improve efficiency,
and increase profit margins.

Value Chain Analysis:

Value chain analysis is a way for businesses to analyze the activities they perform to create a
product. Once the activities are analysed a business can use the results to evaluate ways to
improve its competitive advantage.

Competitive Advantage

Competitive advantage is what sets your business apart from competitors. And to develop an
advantage, you'll need a clear idea of your target market, the benefit your product provides to
the target market, and a solid understanding of your competitors and their offerings.

A business can gain a competitive advantage in one of the following areas.

1. Cost Leadership:

The goal of a cost leadership strategy is to become the lowest-cost provider in your industry or
market. Companies who excel with a low-cost strategy have extreme operational efficiency
and use low-cost materials and resources to reduce the overall price of their product or service.

2. Differentiation:

With a differentiation strategy, the competitive advantage is gained by offering a unique or

highly specialized product or service. The business needs to dedicate time and resources to
innovation, research, and development. A successful differentiation strategy allows the
business to set a premium price for its product or service.

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It's best to pick a single competitive advantage to focus efforts on. Depending on which
competitive strategy you choose the goal of your value chain analysis will be to either reduce
costs or differentiate to improve margins. Then you'll have a clear idea of your business' goals,
how you plan to provide value, and it narrows the scope of changes that might need to be made
to improve efficiency.

Google’s Value Chain Analysis:

Google value-chain analysis is an analytical framework that assists in identifying business

activities that can create value and competitive advantage to the business. Figure 1 below
illustrates the essence of Google value chain analysis.

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 1. Google’s Primary Activities:

 Google Inbound logistics:

It can be argued that Google generates the greatest value in inbound logistics activities
compared to other activities. Google’s core business is search. Internet users use Google’s
search to find information they need, therefore the list of content generated as search results
can be specified as ‘product’ provided by Google. The content Google generates as search
result is created by private and organizational internet users and it comes to Google free of
charge. Therefore, due to unique aspects of Google’s business model there is no inbound
logistics costs for its core search business.

Google also uses an extensive range of hardware, technological equipment’s and tools to
conduct its business operations. The internet giant does not reveal the details of its supply-
chain management and inbound logistics to the public. Google maintains a dedicated supplier
site, where suppliers can submit invoice for payment, check invoice status and deal with a range
of other administrative aspects of their cooperation with the company in a convenient manner.

 Google Operations:

Google operates via more than 70 offices in more than 40 countries internationally. Google
offices are famous for their creative design and the presence of distinctive features such as
sharing cubes, video games, pool tables, pianos, cafes and others. Google headquarters in
Mountain View, California consists of about 4.8 million square feet of office and building
space, along with about 15 acres of land that can be ground for more office space in the future.

The major source of value in Google’s operations can be specified as the company’s
technological capabilities in general and its advanced search algorithm in particular.

All spheres of Google’s operations are guided by its organizational culture based on
challenging the status quo and adopting an unconventional approach in getting things done.
However, there are views that due to its rapidly increasing size, Google has to develop more
policies and procedures and become more bureaucratic with negative implications on the level
of entrepreneurial spirit in the company.

Alphabet Inc. operations, Google’s parent company are divided into two segments:

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  Google: This segment includes company’s main internet products such as Search, Ads,
Commerce, Maps, YouTube, Google Cloud, Android, Chrome, and Google Play as
well as its hardware initiatives. Main sources of revenues in this segment include
advertising, sales of digital content, apps and cloud offerings, and sales of hardware
products.
 Other Bets: This segment includes businesses such as Access, Calico, CapitalG, GV,
Nest, Verily, Waymo, and X. Major revenue sources in this segment include the sales
of internet and TV services through Google Fiber, sales of Nest products and services
and licensing and R&D services through Verily.

 Google Outbound logistics:

Online search and integration of advertisements into search results represents Google’s core
business and there is no outbound logistics associated with running this business. Google also
sells physical technological products such as Smartwatches, Nexus Phones, Chromecast,
Chromebooks, technological accessories and other products via its website
www.store.google.com.

In 2015 Google also opened its first fully-branded physical store in London, the Currys PC
World store on Tottenham Court. “In addition to showcasing Google merchandise—
Chromebooks, Chromecasts, Android phones, and so on—the space includes a “Doodle Wall”
for customers to scribble on with digital spray paint, a “Chromecast Pod” for movie viewing,
and a “Portal” for touring the planet via Google Earth.”

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There are only several Google physical stores around the world and the company relies on
online sales channel to generate revenues. Accordingly, the source of value in Google outbound
logistics refers to the cost saving due to the absence of physical outbound logistics and
avoidance of bills related to fixed and variable costs of physical shops.

 Google Marketing and Sales:

Google’s marketing strategy relies on integration of online and offline communication channels
to communicate the marketing message. Popular components of marketing communication
mix such as advertising, events and experiences and public relations are used by Google
extensively, whereas the company uses sales promotions and direct marketing sparingly.
Google sales are predominantly conducted via online sales channel and the company started to
utilize traditional offline sales channel only recently. For the years ended December 31, 2014,
2015 and 2016, advertising and promotional expenses totalled approximately USD3,004
million, USD3,186 million, and USD3,868 million, respectively.

Google’s source of value in marketing and sales is evident and it relates to its ownership of the
most popular online marketing platform.

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For example, it has been found that “a URL’s number of Google +1s is more highly correlated
with search rankings than any other factor” There are also many other ways Google uses its
own advertising tools for promote its products and services.

 Google Service:

Google forums play an instrumental role in terms of assisting customers to deal with a wide
range of technical and other issues. There are also customer service phone numbers for
Google’s various services. At the same time, exceptional customer services is not one of the
sources of competitive advantage for Google and the company does not create much value in
this specific type of primary activity.

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 BLUE OCEAN STRATEGY

‘Blue Ocean Strategy’ is referred to a market

for a product where there is no competition or
very less competition. This strategy revolves
around searching for a business in which very
few firms operate and where there is no
pricing pressure.

Blue Ocean Strategy can be applied across

sectors or businesses. It is not limited to just
one business. When there is limited room to
grow, businesses try and look for verticals or
avenues of finding new business where they can enjoy uncontested market share or 'Blue
Ocean'. A blue ocean exists when there is potential for higher profits, as there is now
competition or irrelevant competition.
The strategy aims to capture new demand, and to make competition irrelevant by introducing
a product with superior features. It helps the company in make huge profits as the product can
be priced a little steep because of its unique features.

Blue Ocean Strategy is a marketing theory and the title of a book published in 2004 that was
written by W. Chan Kim and Renée Mauborgne, professors at INSEAD. They assert that these
strategic moves create a leap in value for the company, its buyers, and its employees while
unlocking new demand and making the competition irrelevant. The book presents analytical
frameworks and tools to foster an organization's ability to systematically create and capture
"blue oceans"—unexplored new market areas.

Blue Oceans denote all the industries not in existence today – the unknown market space,
untainted by competition. In blue oceans, demand is created rather than fought over. There is
ample opportunity for growth that is both profitable and rapid. In blue oceans, competition is
irrelevant because the rules of the game are waiting to be set. Blue Ocean is an analogy to
describe the wider, deeper potential of market space that is not yet explored.

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The key to exceptional business success, the authors say, is to redefine the terms of competition
and move into the "blue ocean," where you have the water to yourself. The goal of these
strategies is not to beat the competition, but to make the competition irrelevant.

To discover an elusive Blue Ocean, Kim and Mauborgne recommend that businesses consider
what they call the Four Actions Framework to reconstruct buyer value elements in crafting a
new value curve. The framework poses four key questions:

 Raise: What factors should be raised well above the industry's standard?
 Reduce: What factors were a result of competing against other industries and can be
reduced?
 Eliminate: Which factors that the industry has long competed on should be eliminated?
 Create: Which factors should be created that the industry has never offered?

This exercise forces companies to examine every factor of competition, guiding leaders to
discover the assumptions they unconsciously make while competing. They can then search for
blue oceans within their industries and make the shift.

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Google’s Adoption of Blue Ocean Strategy:
Google is a wonderful company revolutionizing information technology. The success of the
networking company relies on Google's adoption of Blue Ocean Strategy. A BOS strategy
follows 4 steps in the sequence of buyer utility, price, cost, and adoption:

1. Buyer Utility:

Google Company followed those steps and made the buyer utility the major tool to attract new
customers. The buyer utility enclose the fastest and best quality searching engine and the Gmail
with unlimited free services. The search alone catapulted the company at the begging because
it is what customer wants. Google Maps with searching direction coupled with the GPS services
is also the best customer can get online. The GPS service is amazing and provides a live feed
of traffic and weather report! Google News and YouTube coupled with Google Docs and many
other applications such as “Android” software for cell phone are dazzling with better
performance. The buyer utility list is long and is growing every year.

2. Pricing:

Most of Google products are free and this is killing the competition of other companies. The
“free” services are making the competition irrelevant. Many companies are following the same
path because it is hard to compete against free services. From Adobe to Mozilla via Banking
or Pharmaceutical companies, they are all offering free services. The power of “free” services
is ruling today’s globalization market.

3. The Cost for the Service:

It is cheap since the company is using simple computer applications coupled with ingenuity to
create market genius strategy. Google generates it revenue from online advertising using
Google AdWords or AdSense. As it was reported: “While ads on its search engine service and
partner sites continue to be Google's primary source of revenues, Google has been venturing
into new initiatives in order to further boost its dominance. Aside from a social networking site
that would take on Facebook, the world's most visited site after Google, according to Alexa
rankings, Google now has a stake in mobile phones and personal computers.”(International

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Business, 2011). The Android operating system for mobile phones is revolutionizing the cell
phone industry.

4. The Adoption:

The adoption of most Google applications is just for fun, simplicity and result. People use it
and love it and most of the time it is free. The first time I used Google search and Gmail, I
never return back to MSN or Hotmail. The first time I use the friendly Android cell phone, I
went back to Sprint and changed my cell phone running Palm OS to Android phone. Many
have tried Google Maps and now Google Earth, Google+ and Google Ocean for better
exploration of the bottom of the Blue Ocean.

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 GLOBAL IMPACT OR STRATEGY

Google’s latest Economic Impact report finds the company contributing $165 billion of
economic activity for 1.4 million businesses and non-profits in 2015, up from $131 billion in
2014. Ads and search lead to clicks, and some clicks lead to business. The incremental revenue
gained has a not insignificant impact on job creation as well.

The Missouri Star Quilt Company, for instance, is now the largest employer in its rural county.
Its 250 employees “ship thousands of packages every day to customers around the world.” As
Al Doan, its founder and CEO says, “The Internet let us build a business that's changed our
town and changed our family.”

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According to global consulting firm McKinsey & Co., roughly three-quarters of the gains from
the internet itself are captured by traditional industries. It’s fair to assume that a portion of
Google’s search and ad traffic flows to these same corners of the economy. The internet’s value
is seen on Main Street as well as the Valley.

“The internet has been an integral tool this whole way,” Stuart Compton of Florida-based Auto
Customs, a local auto parts supply company, said in the report. “I see that becoming even more
important going forward.”

The internet and the broader digital economy will be a key part of the ongoing success of the
American economy. Digitization is expected to boost GDP by up $2.2 trillion by 2025. Within
a decade, cross-border information flows will add another $1 trillion to the global economy.
Competition and regulations are rising, which means ensuring an open digital economy is as
important as ever.

Of course, the real value of Google to you and me is Google itself. We search the world’s
knowledge for free and increasingly sync it with the physical world through Maps and even,
soon, driverless cars. Freely flowing data break down barriers of language or power
supercomputers in the palm of our hands. In the ongoing conversation between man and
machine, we are the ones who have the last say.

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 BIBLIOGRAPHY

 https://www.marketingteacher.com/google-marketing-mix/
 https://studentshare.org/business/1672344-google-products-ansoff-matrix
 https://vdocuments.mx/bcg-matrix-for-google.html
 http://panmore.com/google-five-forces-analysis-porters-model
 https://en.wikipedia.org/wiki/Blue_Ocean_Strategy
 https://www.12manage.com/forum.asp?TB=kim_blue_ocean_strategy&S=148
 https://www.uschamberfoundation.org/blog/post/googles-ever-growing-impact-
global-economy
 https://yourfreetemplates.com/porters-five-forces-template/
 https://research-methodology.net/google-porters-five-forces-analysis/
 https://research-methodology.net/google-value-chain-analysis/
 https://corporatefinanceinstitute.com/resources/knowledge/strategy/ansoff-matrix/
 https://www.entrepreneur.com/article/246477

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