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Google Inc is an extraordinarily successful company. In 2008, Google earned about US$22 billion in revenue. But, how does Google work? What is Google's business model? What strategy does Google use? Can Google's performance be managed and monitored using a single page? This document helps to provide answers to those questions. Also, the document contains information which businesses can use to develop Google-like strategies and business models.
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BLUE OCEAN‐PERFORMANCE DASHBOARD
FOR GOOGLE’S SEARCH ENGINE
Dr. Rod King
Consultant & Trainer on Business Model Analysis, Design, and Innovation
[email protected] & http://businessmodels.ning.com
General Information on the Tool of BLUE OCEAN DASHBOARD
WHAT?
The Blue Ocean‐Performance Dashboard is a tool that seamlessly integrates the three most powerful tools for business management: Value (Supply) Chain; Blue Ocean Strategy; Balanced Scorecard
WHO?
• Business executives; managers
• Business planners; strategic planners
• Small, medium, and large enterprises
• Practitioners of Blue Ocean Strategy
• Practitioners of Balanced Scorecard
WHERE?
• Online: http://businessmodels.ning.com
• Talks; Seminars
• Workshops; Training
• Consulting
WHY?
• ‘One‐Page Business Management’
• Simpler; Faster; Free; Holistic
• Integrated approach to managing value (supply) chain, strategy, performance, and business model
BLUE OCEAN DASHBOARD: A Simpler and More Profitable Way to
Manage Strategies and Business Models
WHEN?
• Starting a business (from idea stage)
• Generating more revenue
• Further reducing cost
• Facing competition in the ‘Red Ocean’
• For uncontested customer experience
HOW?
• “Where currently are you (in the industry?)”
• “Where do you want to go?”
• “How will you get to the Blue Ocean? What strategy and business model?”
HOW MUCH?
• Free online (open innovation): http://businessmodels.ning.com
• Otherwise, contact Dr. Rod King: [email protected]
WHAT NEXT?
• iPhone application for the Blue Ocean‐Performance Dashboard
• Software/social network for Blue Ocean‐Performance Dashboard
• Partners for Collaborative Projects
BOBM8B. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
Company Overview of GOOGLE INC. – Search Engine Date: April 4, 2009
Author(s): Dr. Rod King ([email protected]) Ref.: …………………………………..…………………….
COMPANY BACKGROUND
• Location: Mountain View, California
• Founder(s): Sergey Brin; Larry Page
• Revenue: US$21.79 billion (2008)
• No. of Direct Competitors:
BUSINESS/INDUSTRY
• Industry: Computer (Software); Advertising
• Niche: Internet Search; Online Ads
• Model: Business to Consumer (B2C); Business to Business (B2B); Platform
PRODUCTS/SERVICES
• Internet Search Engine: Google Search
• Online Bidding Platform: Adwords
• Online Syndicated Ads: Adsense
• Complementary Apps: Maps, etc.
CUSTOMER VALUE PROPOSITION
• Uncluttered, fast, free, accurate search engine results and experience
• Monetization of web page/site
• Targeted, measurable, cost‐effective, and relevant online advertising
CUSTOMER BENEFITS/EXPERIENCE
• Simple interface/Easy to use
• Fast, accurate, and relevant results
• Free search service
• Unobtrusive ads; Site monetization
• Targeted ads based on page’s content
COMPANY OVERVIEW OF:
GOOGLE – Search Engine
MAIN GOAL/OBJECTIVE/STRATEGY
Blue Ocean Strategy: to provide a highly desirable and uncontested customer experience while making the competition irrelevant
VISION
• Search engine platform; Software‐as‐a‐Service (platform)
• Advertising platform
• Gateway to world’s knowledge‐base
MISSION
• “To organize the world's information and make it universally accessible and useful”
BOBM8A. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
Blue Ocean Map for GOOGLE’s Search Engine (vs. Classic Search Engines/Portals): Strategic Journey to the Blue Ocean
Fractal Market Segmentation of Knowledge/Ad Management Tools IDEAL BLUE OCEAN (FINAL RESULT)
∞
BLUE OCEAN Experience: Google’s Search Engine/Ad Platform
Classic Internet Search Engines/Portals
Revenu
e
Highly differentiated and
premium-priced/free business model
Lowly differentiated and low-cost business model
(+): DELIGHT
Blue
Ocean
Strategy
(‐): PAIN
RED OCEAN Experience: Traditional Knowledge/Ad Management
Strategic Choice Red Ocean Strategy
(Uncontested Experience, Market Space, or New Category) No. of Competitors
BOBM1.1. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
Blue Ocean Dashboard for GOOGLE INC. Date: April 4, 2009
Name of Product/Service/Facility: Google Search Engine/Ad Platform Functionality: Search Engine/Advertising Platform
Customer Value Proposition: Accurate results; Targeted ads; Monetization Business/Industry: Computer (Software)/Advertising
Goal/Objective: To create an uncontested customer experience and uncontested business model as well as make the competition irrelevant
BUSINESS SYSTEM (“SEMPORCE”) RELATIONSHIPS
Description of Best Current/ Future Resources
Performance Objectives: 2008 Blue Ocean Actions (Relative to Industry Standard) Initiatives/ Projects Cost
($) Revenue ($)
Other Criteria
Raise (+)
Create (+)
Reduce (‐)
Eliminate (‐)
Other
S: Suppliers/Materials Defects Defects
E: Employees/Know‐ledge Assets/Culture
Highly productive/ creative workers
ProductivityInnovation
No. of filed patents/IP
Fun/playR & D
AbsenteeismWaste
TurnoverDelays
M: Machinery, etc. Efficient data centers Defects Defects
P: Processes/Activities PageRank; etc. Quality; ROI Revenue Customers Cost Defects (Six Sigma)
O: Outputs ‐ Product
Google Search Engine/ Bidding & advertising platform/Other Apps
Free search Sale of ads (appliance)
Customer Experience Quotient (EQ)
Ease of use Speed Relevance
Unobtru‐sive ads Other apps
ClutterComplexity IT costs
Purchasedranking for websites
(Blue Ocean Strategy/ Innovation)
‐ Service Search platform; Adwords; Adsense
Free searchSale of ads
Service EQ
R: Retailers/Channels Website owners Sale of ads Channel EQ
C: Customers/ Consumers
Web users; Website owners; Advertisers; Enterprises (Search)
Sale of ads: Cost Per Click Sale of product
Customer EQ & Retention
Retention Loyalty Psychological Inertia/ Friction
Exit/Entrybarriers
E: Environment Env. quality
‐ Competitors Yahoo/AOL/AltaVista/ Lycos/MSN
(Cost PerImpression)
Market share Exit/Entry barriers
Entry/Exitbarriers
Bargaining power; Risks
Threat of substitutes
(Competitive Strategy)
‐ Non‐customers Users of classic search engines/portals
No. of prospects
Entry barriers
‐ Partners Website owners/Affili‐ates/Content providers
Sale of ads: Cost Per Click
Partner EQJoint ventures
AlliancesAffiliates
‐ Investors Share price
‐ Community/Gov. No. of Projects (Local)
BUSINESS MODEL: Google Inc. – Search Engine (How does the organization work to deliver its value proposition to customers?)
US$21.79b IDEAL BLUE OCEAN STRATEGY (How to create an uncontested customer experience and uncontested business model as well as make the competition irrelevant?)
Blue Ocean Program
ROI (%):
BOBM5.1. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
Checklist on 4 Perspectives and Questions for Balancing a Blue Ocean Dashboard
INVESTOR PERSPECTIVE
• How will the business make more money (extraordinary profit)?
EMPLOYEE PERSPECTIVE
• What attributes, skills, resources, and outputs should employees have in order to sustain a workflow and culture that deliver extraordinary value to customers and investors?
4 PERSPECTIVES AND
QUESTIONS FOR BALANCING A BLUE OCEAN DASHBOARD
CUSTOMER PERSPECTIVE
• How will customers experience the greatest delight and least pain?
PROCESS PERSPECTIVE
• What processes and strategies will generate extraordinary profit as well as deliver the organiation’s value proposition to customers/consumers?
BOBM6.1. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM5.3. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM5.3. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM8.2. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM5.3. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM5.32. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
TOMCAT (Trade‐Off) Matrix: Categories of trade‐offs that are resolved by Google’s Search Engine/Opportunities for Blue Ocean Products
Customer’s Intent/Job: Accurate search results; Targeted ads; Monetization (Non‐)Customers/Industry: Search Engine/Advertising
Focus of (Non‐)Customer: Product/Service/Facility; Purchase/Delivery/Usage/Supplements/Maintenance/Disposal
Breakthrough Question: HOW TO MAKE (THE PRODUCT/ENTERPRISE/INDUSTRY OF) CLASSIC SEARCH ENGINES/PORTALS IRRELEVANT?
(Non‐)Customer Needs (‐) 1 2 3 4 5 6 7 8 9 10 (+)
Reduce/Eliminate (Relative to Industry Standard) Raise/Create
Cost Mainten‐ance/ Upgrade
Time (Delivery/ Aging)
Defects/ Complaints/ Waste
Weight/ Size/ Tool
Effort/ Friction/ Energy
Staff Depend‐ency
Complexity/ Information Overload
Rigidity/ Inaccess‐ibility
Pain/ Barriers/ Pollution
1 Value/Functionality Google Google Google Google2 Quality/Automation Google3 Performance/Productivity Google4 Differentiation/Novelty/… Google5 Speed/Agility Google6 Aesthetics/Visual Appeal/Color 7 Ease of Use/Simplicity Google8 Convenience of Use Google9 Customer Service/Support 10 Fun/Entertainment/Adventure (MySpace)11 Star Performers/Celebrities 12 Prestige/Legacy/Amenities 13 Wide Choice/Versatility Google14 Hygiene/Cleanliness 15 Integration/Connectivity Google16 Power/Strength/Wisdom 17 Accuracy/Reliability Google Google Google18 Security/Safety/Health 19 Collaboration/Communication (Facebook) (Facebook)20 Customization/Personalization (MySpace)
Eliminated trade‐off (other trade‐offs are partially resolved and therefore present opportunities for innovation)
BOBM7. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
REFERENCES
1. Battelle, J. (2005) The Search. New York: Portfolio Trade. 2. Jarvis, J. (2009) What Would Google Do? New York: Collins Business. 3. King, R. (2009) The Infinitely Zoomable Page: The Ideal Tool for Blue
Ocean Thinking, Design, and Innovation. Fresno: Ideal‐Solution Management.
4. Ross, E.; Holland, A. (2006) 100 Great Businesses and the Minds Behind Them. Illinois: Sourcebooks, Inc.
Consultant & Trainer on Business Model Analysis, Design, and Innovation
[email protected] & http://businessmodels.ning.com
Dr. Rod King
