1

Topic Name:

Google Inc. (2010): The Future

of the Internet Search Engine

3

Current Situation

Current Performance:

1995 2006 2010

1. Founded by Larry 1. Revenue

exceeded

Page and Sergey. $29 billion

Brin. 1.Net revenue becomes $10.6

2. Google.com was billion

registered

On 15 of Sept 2997.

4

Cont…

Mission: 1. Google's mission is to organize the world's information

and make it universally accessible and useful

Vision: 1. Organize World’s Information & make it universally

accessible and useful.

2. Make it useful from desktop, laptop and even through from mobile.

 

4

Corporate Governance

A. Board of Directors:Alan Eustace Senior Vice President, Knowledge

Salar Kamangar Senior Vice President, YouTube & Video

Sridhar Ramaswamy Senior Vice President, Ads & Commerce

B. Top Management: Larry Page CEO and Co-Founder

Eric E. Schmidt Executive Chairman

Sergey Brin Co-Founder

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External Environment

General Environment:

Political

Economic

Socio-cultural

Technological

7

Cont….

Political: The bad political relations between US and the other

world have bad outcomes for the company.

8

Cont...

Economic: Average age of internet users is about 25.

There is a gap on Internet connectivity in Urban and rural areas.

9

Cont...

Socio-cultural:• Most users were young age group.

• Internet users were the well-educated group.• Most of internet usage was concentrated around cities.

10

Cont…

Technological:

Technology is obviously always improving and Google has taken specific measures to make sure it does not fall behind.

11

Cont…

Industry Environment:

Threats of New Entrants .

Threat of Substitutes . Rivalry among existing competitors. Bargaining Power of Suppliers . Bargaining Power of Customers.

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Threats of New Entrants (Low)

• Due to high barriers it is more difficult for new competitor to enter into the market.

• For a new company it will be very difficult to take over such customer loyalty.

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Threat of Substitutes (High)

• A search engine would be based on the speed and accuracy of the searching tools. 

• If skilled labor moves from one search generating company to another so it can create huge losses.

14

Rivalry among existing competitors(High)

• Yahoo and Microsoft they are getting faster in reaching the standards.

• For the laws of online businesses have not yet been defined properly so, the exploitation and manipulation is easy.

15

Bargaining Power of Suppliers (Low)

• Suppliers are different from different sectors so competition level is too low.

• High availability of supply.

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89% of Google’s revenues are derived from advertising. However, no single account contributes more than 3% to net revenue, and less than 5% of the revenue is generated by any given network partner site.

Bargaining Power of Customers (Low)

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External Factor Analysis Summary(EFAS)

External Factor Weight Ratting Weighted Score Comments

O1. Growing number of mobile internet users

20 5 100

O2. Obtaining patents through acquisitions

15 4 60

O3. Google fiber cables.

15 4 60

Treat

T1. Growing number of mobile internet users

20 5 100

T2. Unprofitable products

15 4 60

T3. Competition from Microsoft

15 4 60

total 100 440

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Internal Environment

Corporate Culture Focus on global internet service provider.

Cost Efficiency.

Strong research and development department.

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Internal Environment

Sales and Marketing Reasonable Pricing : Introduce their product with reasonable price.

Brand Loyalty : Always make it as a different products compared to others

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Internal Environment

Finance: Total assets is USD $ 57,851 in million.

Annual revenue in USD $ 29,321 in million Net income USD $ 8,505 in million.

21

Cont…

Research and Development:

1. Google gives more focus on R&D to develop new products and services each year.

2. Only R&D budget is $6.8 billion.

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Core Competency

• Unique to the enterprise.

• Result from a mix of skill, resources and processes.• Invisible to competitors.

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Internal Factor Analysis Summary(IFAS)

Internal Factor Weight Rating Weighted Score Comments

strengths

S1. Open source products and services

20 5 100

S2. Financial situation 15 4 60

S3. Strong patents portfolio

15 4 60

Weaknesses

W1. Relies on one source of income

20 5 100

W2. Unprofitable products

15 4 60

W3. Patent litigations 15 4 60

Total 100 440

Strategic FactorsWEIGHT RATING WEIGHTED

SCORESHORT TERM

SHORT TERM

LONG TERM

S1. Open source products and services 20 5 100

S2. Financial situation 15 4 60

W1. Relies on one source of income 20 5 100

W2. Unprofitable products 15 3 45

O1. Growing number of mobile internet users 20 5 100

O2. Google fiber cables. 15 4 60

T1. Growing number of mobile internet users 20 5 100

T2. Competition from Microsoft. 15 3 45

Total 610

(SFAS Table)

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Identification of strategic Issues(Tows Matrix)

Internal factors External factors

Strength (S) 1. Open source products and services2. Financial situation

Weakness (W)1. Relies on one source of income2. Unprofitable products

Opportunities (O)1. Growing number of mobile internet users2. Google fiber cables.

SO Strategies:Use financial position to partner with more web consoles and develop mobile application.

WO Strategies: Fiber industry can be another source of money for the company.

Threats (T)1. Growing number of mobile internet users.2. Competition from Microsoft.

ST Strategies:The firm must emphasize efforts against the threats of competition and imitation

WT Strategies:Firm try to develop their technology to catch the new internet users.

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Strategic Alternatives & Recommendation

1. Use financial position to partner with more web consoles and develop mobile application.

Pros: Due to having innovative ideas they can capture more customer in the market.

Cons: When they will work together then their believability will reduce and it can be more harmful for the company next time.

2. The firm must emphasize efforts against the threats of competition.

Pros: Help to beat the competitor and growth.

Cons: May effect in legal issue.

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Cont…

3. Fiber industry can be another source of money for the company.

Pros: Company can give more appearance to develop their technology.

Cons: Fiber industry has also many competitors.

4. Firm try to develop their technology to catch the new internet users.

Pros: Helps to enter the new market.

Cons: May effect on tradition.

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Evaluation and Control

Mass-market portals can be harmful for Google's independent growth.

They have a lot invest at R & D and have to be proactive in order to compete with their competitors in the industry.

Google Should keep updating its technology and services with the Same simplicity and comprehensiveness as it has been since