Google Inc

Agenda

Overview of Google Inc

Situational Analysis Industry Analysis

PESTLE

PORTERS

SWOT

Google 2015 Objectives

Strategies

Tactics

Action based on the problem

Controls

OVERVIEW OF GOOGLE INC

Google started as a project of Larry Page in 1996, joined by Sergey Brin.

It was previously named “Back-Rub”

It was incorporated firstly as privately held company.

Over a billion of search requirement daily

Google extended its website beyond the search functionality

The business model (advertising based revenue)

Adword and Adsense generate majority online advertising revenue

Google

The Vision

Make search engines so powerful they would understand “everything in the world”

The Mission

Organiz World’s information and make it universally accessible and useful

To FOCUS on

Innovation on the user experience

People Behind Google

Building great products depends on great people. There are more than 40,000 Googlers behind the tools that you use every day—from search to Chrome. Find out more about what it’s like to work at Google, where we work and who drives our company strategy below.

Uniqueness of Google

The search is Speed, Accuracy, Objectivity and Ease of Use

The search should also fit the tech and the consumer behavior

Positioned as “ the fastest Crawling Tech”

Keeps the Search uptodate

Trade off between speed and compression

1st to get it rite

Situational Analysis

Industry Analysis:

Internet services and Technologies

The Core source of revenue is advertising

Major Sectors

Cloud computing

Advertising

Search engine

Porters Five Forces

Jean Cler

Entry Barrier

Suppliers Bargaining Power

Substitution Threat:

Buyers bargain power

Rivalry Factors

PESTLE

Political

• Suspected of Political Agenda - Chinese state media accusing Google of “playing an active role in exporting culture, value and ideas”

• Government stability – Government help businesses and the latter's advertise on Google.

• Censorship – e.g. China adding regulations to forbid google from operating on their terms.

• Copyright - An author sued Google when the company’s cached search results provided copies of copyrighted works

• Government Regulations on internet sector - Governments around the world regulate Internet content e.g.. child pornography and defamation

Economical

• Inflation – Increase in inflation cause companies to advertise more.

• CPC Inflation – in an auction market like the one AdWords uses, increased competition can be negative.

• Interest Rates – Google relies on investment

• Exchange Rates – 50% of revenue derived in 2014 from outside the United States.

• GDP - Google’s internal and external investments will always be high in numbers

• Economic Crisis – Still making profit due to growing trend to business advertising online.

• Competition – Could take away customers –e.g Yahoo, MSN etc…

Social

• Work-life balance and popularity of alternative working patterns

• Not limited to demographic changes – strong advantage. Everyone with access to the internet.

• Changes in consumer attitudes and opinions - towards consumer electronics products and services

• Education – relates to economic performance

• Social Trend/Lifestyle changes - Google always strive to keep up with the social trends and lifestyle changes

Technological

• Rate of technological development – Google’s success is mainly due to its innovative concepts and technologies e.g. PageRank in their search engine, AdWords in advertising system.

• Access to technology

• Basic infrastructure

• New discoveries and development

SWOT

Strength

• “HAPPY”EMPLOYEE-emotional and physical well being as well as financial and social benefits

Strength

HUGE CASH FLOW-the Google stock analysis shows positive net income cash flow of 14.44B for 2014

Strength

•FAITHFUL CUSTOMER-3 billion searches daily with a 64.5 % market share in US only

Strength

VERY ACCESSIBLE AS AVAILAIBLE IN MULTIPLE LANGUAGES-123 languages

LEADS THE SEARCH ENGINE INDUSTRY BY CONSTANT INNOVATION /HIGH ADAPTABILITY OF PRODUCTS-Google has invested massively in RND and is second on the list of technological innovators -the “Google Voice Search , Google Goggles for smart phones or the Knowledge graph.

Strength

Excellent relationship with partners-Google partnership with Samsung allows it to be present on latest smart phones

NEW MANAGEMENT SYSTEM -a “more common corporate structure” and decisions flow will be faster and better.

Management- Android + YouTube purchased were turned into mega hits, and were both forward thinking. They now dominate their respective areas, and benefit each other. They comprise a large part of Google's ecosystem.

WEAKNESS

Privacy issues-compilation of data that might violate other’s privacy , censorship of search content and results , consumption of energy of the servers, illegal competition such as monopolizing the industry and stealing ideas

Censor information -Germany and France extremist sites have been removed from the German and French +Google Auto Complete feature does not

Adaptability issues faced by new comers

WEAKNESS

Lack variety of profit sources -High dependence on advertising-to 59 billion USA dollars and accounted for 89.5 %

WEAKNESS

No access to google in some countries-RUSSIA AND CHINA “Great Fire.Org”

Mozilla replaced Google with the Yahoo as it's default search engine for its Firefox browser, costing Google market share to decrease

Opportunities

•Innovation : GLASS /DRIVERLESS CAR

Opportunities

High adaptability on mobile new market shares in emerging markets

Ensure privacy-new privacy policies installed

Google news- new medium to display information

Threats• Difficulty to manage such as huge company

Threats

Exchange rates-50% of its revenue from outside of the U.S. 2014, Google reported revenue of $16 billion, out of which 58% was derived from outside of the United States

Amazon- people going directly to the e-commerce vendor to BUY takes away from Google and their most lucrative searches.

Apple is considering replacing Google as the default search engine in the iPhone, This, though expected by many, would have deleterious affect on Google's short term price.

OBJECTIVES

Google Objectives

Google’s mission statement is “to organize the world’s information and make it universally accessible and useful.”

Google’s main focus is to push the limits of existing technology to provide a fast, accurate and easy-to-use service that anyone seeking information can access. Google has been focusing on providing the best user experience possible. Its key ingredients are relevance, comprehensiveness, freshness and speed providing users with best possible result.

Google wants to have an improved infrastructure to make their engineers more productive. They wants to expand the workforce for anticipated growth, expand further into international markets, and continue developing new products

Google wants to push their add system since they take it very seriously. In addition, support thousands of advertisers to use Google’s AdWords program advertising.

It also focuses on innovation and make sure that their tools are running everywhere. Similarly, competitor like Apple, Facebook has been attacking Google from all side so they focus on development and research to bring new products to users. Financial Objectives to promote their products and services on the web with targeted

Google has been investing a lot these past years. Therefore, one of its financial objectives is to increase its Return On Capital Employed.

Google main source of income is advertisement where a company’s website pays google certain amount of money whenever their website are clicked. Therefore, Google has to increase the cost per click in order to increase their revenue

STRATEGIES

STP analysis

Competitive

Growth

STP Analysis

Google Inc

Segment –Mass

Does it Matters who users the web?

The only common denominator is the search itself.

The Targeted audience is Users all over the world

Google Core Business which is advertising

Advertisers who uses the internet frequently

Local and World wide advertisement

Positioning

Google as an Advertising Media

Very User Friendly

Metrics Traceable (Google Analytics)

Credible

Advertiser, Host and Viewer - Reward

Google Company to Users

Solution centric

Innovative

Socially Responsible

Entering New Markets – e.g. Google Compare platform US & UK. Compare car insurance quotes from up

to 120 providers.

Diversification – e.g. Acquisition of YouTube which was an existing product in Google's portfolio on an

existing market i.e. Google Video. Or showing intention of tapping into the auto industry with the

driverless-car technology.

Organic Growth – Expansion of a firm's operations from its own (internally generated) resources, without

resorting to borrowing or acquisition of other  e.g. Google Earth and Gmail are developed internally.

Inorganic Growth – Grow by acquiring new businesses by way of mergers, acquisitions and take-overs

e.g. Google acquiring Motorola on the 22nd of May 2012

Positioning- Branding Strategy

Google is positioned as :

Solution centric

Innovative

Socially responsible

Vast networks, deep knowledge

Positioning- Branding Strategy

Household name

Verb in Webster’s dictionary

Interbrand Brand of the year, 2003

Quantifying Brand Value

$55B (Interbrand, 2011)

$111B (Brandz, 2011)

Google offerings are largely free

Customer feelings - Love, Loyalty, Share of heart

Competitive

Superior Structure

Plethora of products

Powerful Search Engine

Google handles more than 3 bn search daily

Extensive Portfolio of Products and Services

Google always pursuing to extend its portfolio of services and tools (SCA)

RBV

Valuable, Rare, imperfectly imitable and non substitutable

Growth

TACTICS

RECOMMENDATION

CONCLUSION