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STRATEGY MANAGEMENT GOOGLE

Submitted to : Dr. R J Masilamani

GROUP NO: 2
SECTION - A






Submitted by:

Abhinav Bajpai (13DM007)
Aditya KV (13DM013)
Animesh Taneja (13DM027)
Ankita Gupta (13DM031)
Ayyanat Syamnath (13DM050)



Birla Institute of Management Technology, Greater Noida
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TABLE OF CONTENTS
1. Introduction....................................................................................... 3
2. Business Definition ............................................................................ 3
3. Vision and Mission ............................................................................. 4
4. Transition .......................................................................................... 4
5. Source of Competitive Advantage ..................................................... 5
6. Environment Analysis ........................................................................ 7
6.1 Internal Environment ................................................................... 7
6.2 External Environment................................................................... 8
7. SWOT Analysis ................................................................................. 10
8. Universal Growth Path .................................................................... 10
9. Conclusion ....................................................................................... 13











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Strategic management has many benefits to an organization. A companys vision, mission and
future goals are set from the strategic process. In addition, strategic management gives
managers an advantage in allocating resources efficiently. Moreover, these strategies help give
the firm a competitive advantage in the market. Statistics show that, on average, companies
using strategic management are more successful.
1. Introduction
Google has changed the way people look at and share information. This has made them a
leading search engine on the web and a global technology leader. Back in the mid 90s, Stanford
University graduates, worked on developing this unique technology. Since then, Google has
grown to become one of the most recognized brands in the world as well as one of the top
Internet destinations. As of 2013, Google has 16800 employees working in more than 70 offices
in more than 40 countries around the globe. Their headquarters is located in Mountain View,
California, USA.
Google is the world's most popular search engine. It began as a search project in 1996 by Larry
Page and Sergey Brin, who were two Ph.D. students at Stanford University. They developed a
search engine algorithm that ranked Web pages by content and keywords and by how many
other Web pages linked to each page. This strategy produced more useful results than other
search engines and led to a rapid increase in Google's Web search market share. The Google
ranking algorithm was later named "PageRank" and was patented in September of 2001. In only
a short time, Google became the number one search engine in the world.
2. Business Definition
According to Google's website, the company's mission is to "organize the world's information
and make it universally accessible and useful." While the Web search remains Google's primary
tool for helping users access information, the company offers several other services as well.
Some of these include:
Image Search - search for images on the Web
Google Groups - online discussion forums
Google Answers - answers to questions based on a bidding system
Google Maps - maps and directions
Google Toolbar - a downloadable search tool
Blogger - a free blogging service
Gmail - Web-based e-mail with several gigabytes of storage
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AdWords - Advertising services for advertisers
AdSense - Advertising services for Web publishers
Google Inc. has a record of $22.9 billion in advertising revenues in 2009 and is an indisputable
leader in Internet search. In October 2013, Google's shares surged to a record high of more
than $1,000 per share. By comparison, it's initial public offering in August 2004 was at $85 per
share.
3. Vision and Mission
4. Transition
Product Development Philosophy
Google divides its product investments three ways, following a formula of 70-20-10. Seventy
percent targets its core search and advertising products, 20 percent focuses on related products,
and 10 percent centers on the most experimental products190. These projects would include ones
where the company remains unsure if users will adopt the service or if it would make money, but
such experiments are critical for the long term. Products can move among the categories as well.
For examples, Google News, a service for searching news articles, and Froogle, a product search
service, are both beta products that fall into the category of adjacent products
The users often see some of products logo indicates that the product is beta version and this is
about Google's beta policy which Google keeps products and services in beta as long as its
engineers expect to continue to make major changes to them. Google's betas also are central to
its identity. Google itself was in beta for a very substantial number of years. Part of Googles
brand is that we under-promise and we over-deliver, and being in beta is part of that. It's part of
our branding strategy As Google provides more and more services, it can gather an increasing
amount of information about users. Therefore, users are also worried that Google tracks all of
searches, and it might then easily create a personal profile of a user and sell the results to the
highest bidder. Indeed, when a user visits a Google website or does a search in Google, Google
servers record information about that visit, including the IP address of the visitor, the URLs, and
the date and time of request
The Classification of Products and Services
Based on available public information, Google has various product classifications for its
products. For example, in 2005 annual report, Google described its products and services by
categories of Google.com, Web and content search, Communication and collaboration,
Downloadable applications, Mobile, Labs, Google AdWords, Google AdSense, and
Google Enterprise.
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Yet on its website, categories are Search, Explore and innovate, Communicate, show &
share, Go mobile, and Make your computer work better. In short, in order to allow the
readers of this research to easily understand , this research adapts the latter classification.
Also, Google does not provide a direct-meaning link to a central page that includes all of its
products, instead of the direct word products Google uses more and About Google
Accordingly, users know about Google as a web search tool, but do not easily to realize there are
abundant products and services that can be applied. For example, users want to check out the
newest launch, a Web-based spreadsheet, Google Spreadsheets, users certainly cannot find it
anywhere through links on the index page of the Googles website, then if they type-in the
keywords to search and try several links which may provide a trial-out opportunities finally. Yet
it already costs time and makes an impression.
5. Source of Competitive Advantage
Google owe its success to the following aspects. They have helped them maintain a sustainable
competitive advantage, over their competitors viz Yahoo!, Microsoft, eBay, Amazon.
Superior Infrastructure
Google operates in a very competitive environment. With its plenty of products and services,
Google faces competition from different industries. Googles sustained competitive advantage
is evident in its superior infrastructure.
In the 3rd quarter of 2013, it was revealed that the Internet giant spent $2.3 billion on
infrastructure. This is a stark increase of nearly 50% as compared to a year ago.
Powerful Search Engine
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Googles search engine received critical acclaim with PC Magazine naming it in its list of Top
100 Web Sites and Search Engines for 1998. Between the year-end 1998 till early 1999, the
number of queries increased from 10,000 to 500,000 queries daily. Since then, the search
engine has been refined and enhanced with newer features. In 2010, there were 516
improvements to search such as Instant Search that provides dynamic results.
It's the best search engine available that edges all its competitors, the biggest competitors
being Microsoft's Bing and Yahoo Search. Google handles more than 3 billion searches daily,
which is a market share of about 67% in 2012. By comparison, Bing and Yahoo search holds a
market share of about 16% and 13% respectively in 2012.

Extensive Portfolio of Products & Services
Googles constant pursuit to expand its portfolio of services and tools is also evidence of its
sustained competitive advantage. Google has also acquired over 100 companies to expand its
services, notably the popular video sharing web site, YouTube in October 2006 and Motorola
Mobility in August 2011. YouTube serves more than 800 million unique visitors a month and
holds a leading market share of more than 40% in online video. This figure is 20 times greater
than it's nearest competitor, Youku in China.
Google also encourages its staff to exercise their creativity and innovation, that can contribute
to the formation of new products and ideas.
Resource Based View (RBV) of Google
Based on Resource Based View (RBV), an organization is able to gain sustained competitive
advantage if its resources fulfil the following criteria of being valuable, rare, imperfectly
imitable and non-substitutable. This is commonly known by the acronym "VRIN".
Valuable Resources Google is best known for its search engine. The search engine has
been Googles most valuable resource, driving advertisements which accounts for a 96% of
Googles $37.9 billion revenue. Employees are also one of Googles valuable resources. The
lively and creative company culture has been important in the high-efficient operations,
resulting in the creation of the many innovative services and tools.
Rare Resources Google has a large portfolio of patented technology and the numbers of
patents held have been increased with the acquisition of Motorola Mobility in 2013. It is
reported that the acquisition has provided Google with an extra 24,000 patents.
In-Imitable Googles scale of its infrastructure cannot be easily imitated.
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Substitutability With its clean, minimalist user interface, Google Search offers an
unparalleled way of retrieving information quickly that is difficult to substitute.
Using RBV, it can be determined that Google sustained competitive advantage is achieved
through the resources that it has. These resources are in-imitable and difficult to substitute.
6. Environment Analysis
6.1 Internal Environment
Its relatively short life as a company, Google quickly became a role model for its culture of
innovation. Software writers and engineers were attracted to Google not just for its famous
perks such as free meals and laundry facilities but also for a climate in which they were
encouraged to let their imaginations roam free, dreaming up ideas just might be the next big
thing on the Internet.
During a long-running business boom, that culture served Google well. The best engineers were
thrilled to work for a company that let them spend one-fifth of their time on new projects of
their own choosing. But when the economy slowed and the stock market nosedived, Googles
managers had to cope with a new reality in which money was tight. Google could no longer
afford its free-spending culture. Managers had to figure out how to maintain the best of the
culture while innovating at a more prudent pace.
Googles modified culture now values setting priorities. New ideas are still welcome if they are
focused on core businesses of search, advertising, and Web-based software applications.
Managers are reassigning employees away from teams working on unrelated projects and using
them to staff teams working on profitable ideas in the core areas. Employees who have an idea
that can improve the computer users experience are asked to consider also what impact that
idea might have on Googles bottom line. Similarly, hiring has slowed, because managers must
not only justify the talent of a candidate but also target hiring to particular business needs. The
challenge will be to keep employees as excited about targeted innovation as they have been
about freewheeling innovation.
Googles IPO prospectus announced dual-class equity, giving 10 votes per share to holders of
Class B stock versus one vote per Class A share. Assuming that the founders retained their Class
B shares, Googles top management trio would own roughly one-third of the shares but control
over 80% of the votes. This prevented hostile takeovers and quick decision making.
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6.2 External Environment
Googles competitors are constantly innovating in web search, online advertising, wireless
mobile devices, and web-based products and services. To counter that, in 2011, the company
spent $6.8 billion in R&D efforts.
Demographic Trends
Google.com reaches over 195 million people every month. According to a Gallup
study conducted in 2011, sixty percent of Americans visit Google in a given week. The
demographics, based on this study, skews towards young, affluent and college educated
Americans, with more than half of those under 50. Since the rise in smartphones, one can only
expect the number of users to rise.
Socio-cultural influences
Googles primary cultural influence has been in terms of making information accessible. It has
empowered its users to ask a question, usually in the form of keyword-based searches and
receive a various possible answers. With products like Google Books and Google Translate,
information that would normally not be available to each individual has become more
accessible.
Google is a leader of society that is more and more global because its mission is to organize the
worlds information and make it universally accessible and useful to everyone. Socio-cultural
factors include traditions, values, societal trends, and society expectation of businesses. These
society expectations can be grouped into: population demographic, income distribution,
lifestyle change and level of education.
Google is not limited to a certain demographic population, it is a global company that offers
global users with global services and global knowledge for free with only one condition of being
connected to the Internet. Therefore there is no restriction on any specific demographic,
culture or specific income distribution. This gives Google a very strong advantage in the market.
Its tools are offered to everyone and hence anyone, anywhere in the world can advertise on
Google and increase their profits.
Technological developments
Google was not the first to devise search or email or advertisements. But its market leadership
was due to the fact that it did all of those things better than others. Google pioneered cloud
computing for the general public Google docs and was in fact years ahead of any other
company in that area. With Android and Chrome OS, Google has branched out to operating
systems and browser.
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In analyzing the technological factors affecting Google, the key aspects to consider are the level
of basic infrastructure, rate of technological change, new discoveries and development,
government spending on research, access to newest technology, technology incentives and
technology legislations.
Google's IT infrastructure is a closely guarded secret because it is one of the companys
competitive advantages. Google has up to 450,000 servers spreads over at least 25 locations
and it uses a customized version of Linux operating systems to give them control and flexibility
in finding new discoveries.
The success of Google is mainly due to its innovative concepts and technologies such as
Pagerank in their search engine, Adwords as advertising system, AdSense program, Gmail,
Google Spreadsheets & Docs, Google Map, Google Froogle, Google Analytics, Google Desktop,
Google Earth, Google Gear, Google Page creator, Google groups, Google talk, Picasa and more.
In order to remain the best in the field of technology, Google has bought a great number of
start-up companies (131) that allows it to benefit from the dynamism and creativity that these
companies bring. These companies range in variety of fields such as security, advertising, video,
file sharing, shopping, mobile technology and many more.
Global Pressures
Google faces various types of political and legal pressures, most notable among them being the
ability to address privacy concerns while balancing requests from government institutions.
Google also faces risk of fluctuations in foreign currency exchange rates as well as increased
regulatory scrutiny especially with the EU.
Political Factors
Government stability is one of the major aspects in Google's strategy. If the market is stable,
governments help businesses and so these businesses advertise more on Google, hence,
benefitting Google. In addition, most of the governments do not have identified laws for online
information sharing, thus, giving Google the opportunity to manipulate laws.
However, China has created a barrier for Google by adding regulations that forbid Google from
operating on their terms. For example, Chinese Government launched a surveillance system
called Golden Shield for monitoring civilian use of Internet.
On a positive note, most of the political factors affect Google negligibly. Some of these factors
are taxation polices, employment laws and environment protection laws.
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Economic Factors
Gross domestic products (GDP) have been on the rise since a very long time. They are
increasing annually at the average rate of 3.20% reaching a high level of 17.20% at times.
Countries like South Africa, India, China and United Kingdom have had increases in their
GDP each year since the 70s and this is a positive factor on Google. With the stable and
continued growth of those countries, Googles internal and external investments will always
be high in numbers. Users search more; hence more advertisements are put on Googles
search engines. The amount of users around those counters can impact on Google positively
and lead them to establish better services and more products for their users, strengthening
Google economically.
Interest rate can have a positive or negative impact on any organization. These impacts are
decided depending on a companys dealings. Google is a company that relies on
investments, this means when interest rates increase gradually in a country, Google
benefits. In UK, the rate average is set to about 8.2%, in USA it stands at 6.1%, in South
Africa at 13.3%, in India at 6.6% and in China at 6.4%. These numbers mean that companies
in that region of the world will be able to take out loans and invest or support their
company. The more companies have money, the more they will be willing to spend on
advertisements; hence doing that through Google. This increases opportunities for Google
in these markets.
Inflation rate is a problem for the customers or buyers. However, companies benefit from it
and it increases their overall income. In the past few years, USA, UK, India, China and South
Africa have all recorded an average increase in inflation rate of 2.5-9.5% annually. This
means that raw materials in these countries are becoming more expensive every year. This
causes the companies to increase the prices of their products and getting more cash out of
it. This causes Googles advertisements to increase as well as the number of clicks for each
ad. The result is more profits for Google from these countries.
7. SWOT Analysis
8. Universal Growth Path- The 4 Es of Google strategy
The companys new products and streamlining of old ones reveals an underlying logic,
discipline, and structure.
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1. Earn 95% of Googles revenue comes from advertising. Other than its minimalist ads,
Googles true nature is cleverly hidden from users. Its really a B2B network that lets a closed
loop of business customers target Google users through ads. Googles ad service pages waste no
time distinguishing between users and customers clear. Adwords support is loaded
with phone numbers to call. Youd have to hijack a truck full of Google Glasses to get someone
from Google to help you recover a Gmail password.
Google has never stopped trying to diversify its revenue streams by charging for storage,
business apps, and even YouTube channels. But none have made more than a 5% dent so far.



2. Entice & Defend Googles geeky magic comes from its non-stop inventiveness. Every
Google service is a exciting and addictive mix of free (or cheap) utilities that make our lives
easier or more productive. These utilities must accomplish one main goal to create the biggest
possible market to deliver ads. That means increasing the number of users, frequency of visits,
or duration of stay on a Google property.

So each Google property must accomplish at least one of three things:
Deliver ads to as many users as possible (like Gmail or Search)
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Bolster the earn by enhancing products, typically through data collection to improve ad
targeting. Products like Google+ and Maps soak up user preferences, behaviors, and
relationships. As this big data engine grows, the potential for new revenue streams and
apocalyptic privacy fears multiplies. Ill explore these in future articles.
Defend Google and its properties against competitors that might steal usagetime. Facebook,
Spotify, Netflix, iPhone and Twitter have forced Android, Google+, and Play into existence
to defend Googles its share of internet time.
Google accomplishes all this through a combination of organic products, non-stop upgrades, and
acquisitions. Each one must create deep roots (email, contacts, smartphone) and painful
switching costs.
The intended effect of all Google services is a lot like a casino. Google wants to envelop you in
its world until you cant find the exits. Once inside, youll tell the dealer your life story as he
takes your money
3. Expand the Pie This is probably the least understood part of Googles strategy. Google
knows its hard to find new customers and compete with every new service. So it does something
I spent a lot of time promoting at MasterCard and American Express expand the pie. In my
case, it meant, promoting conversion from cash and checks to digital transactions, regardless of
platform. With a bigger pie, everyones slice gets bigger. In Googles case, that means expanding
leisure time. Thats right, Google wants to make time. Google knows if youre online and near a
screen or smart device, theyll be making money.
The two best examples of this are Glass and self-driving cars. With Glass, Google wants to sit
on your face literally. Their glasses can deliver digital stimulation at times previously wasted
pretending to care about the people around you. Smart cars liberate you from your fear of
crushing skunks and navigating New Jersey. Now you can research stocks, listen to Google
music, and work on Google Docs.

4. Experiment Google has a culture that breeds experimentation. The experiments range
from Google X labs, which incubates top-secret R&D projects, to all employees who are
encouraged to use 20% of their time to work on anything they like.




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9. Conclusion
At present, Google is the most dominant search engine across the globe having a market share
of about 65%. Maintaining this competitive advantage in the dynamic search engine requires
Google to develop innovative competitive strategies against its rival firms. The first
recommended strategy for Google to maintain its competitive advantage in the search engine
industry is to strive always to be a technological leader through constant innovation.
The search engine industry is technology savvy and key players strive to invent products that
can constantly meet the changing needs of users (Sherman 2005). However, if Google can
manage to position itself as a technological leader rather than a technological follower, Google
will be capacitated to stay ahead of its competitors in terms of innovation.
Google should continue maintaining its competitive advantage is through product
diversification. Diversifying its product portfolio in the search engine industry will be
instrumental in ensuring that Google reaches a wider audience. For instance, Google offers
numerous search engine tools for various applications such as Google Maps, Google Earth,
GoogleMaps, Google toolbar among others. With a diversified product portfolio, Google will
continue will continue to expand its customer base. A case in point is that Google is the only
search engine company offering search applications for specific data types such as images,
books, maps and docs.
In order for Google to capitalize on its strategic initiatives, the company should be responsive
to change. It is apparent that Google operates in an extremely dynamic and turbulent industry
and therefore, being responsive to changes taking place in the industry is a critical success
factor for Googles business strategies to be effective.
For instance, the smartphone sector is typified by price wars and cloud-computing sector is
typified by constant innovations by key competitors such as Microsoft. This implies that Google
should be responsive to these changes in the industry.
Google has been acquiring small venture capital corporations since 2001. For example, Google
acquired Keyhole Inc, GrandCentral, and Aardvark. Apart from acquisitions, Google has
collaborated with several corporations to enhance the delivery of their services. For instance,
Google collaborated with DoubleClick to enhance its Google analytics service.
All in all, Google has won countless awards, has maximized on profits, improved services,
introduced new developments, eliminated most of the competition and dealt with their
weaknesses. It is safe to say that Googles business strategy is sophisticated but has come out
with fruitful results. Although the world is not perfect, Google has more strengths and
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opportunities than threats and weaknesses. This is even proven on the Internet as someone has
joked about Google by saying: Only thing Google has failed to do, so far, is fail.