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Mikey,
Michael,
Meredithe,
Jake,
Charly,
Virginie,
Natalie
MGT 4380 – Strategic Management
Instructor: Dr Kimberly Boal
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Google’s History

In 1998 current CEO Larry Page an undergraduate student at
Stanford launch Google

In 2000 Google enter the foreign market and provide 10
different languages of their search engine

As 2010, Google offers over 100 languages
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Information Revolution
Google has introduced revolutionary changes in the way that
any kind of information is managed, shared and made useful.
Google has created these products over a period of time.
Google
Search
Google
Earth
Google
Desktop
Google
Maps
Google Video
Google
Groups
Google
Mail
Google Trends
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Innovation

Google’s top goal in 2006 was to increase the scale of
innovation

Google search engine,is the largest search engine on the
Web.

“bottom up”/mass collaboration capability: which is
Internet, personal messaging systems, and social networks

Google keeping up with Apple introducing the Android.
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Continual Change
 Google
 Google
was a Web-based search engine
now has changed and is capable of doing
many more things
 Google maps: interactive
 Follow trends: finances
 Newest change it is now possible to get satellite
images of Earth at any point
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Creativity
 Creativity-
is the ability to combine ideas in a
unique way or to make unusual associations
between ideas.
 Google's
new marketing unit- Google Creative Lab
 Still in its developing stage
 Small teams
 Find new ways to communicate the company’s
innovations, intentions and ideals
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Google's Vision and Mission
Statements

Google's Vision Statement: an open web benefits all users
and publishers.


“Open” does not be free
Google’s Mission Statement: is to organize the world’s first
information and make it universally acceptable and useful
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Leadership

Level 5 leaders

Modest and Willful, Humble and Fearless

Set up their successors for even greater success for the next
generation.

Many Google offices- Googlers work in small, focused teams and
high- energy environments.
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Top Executives

Larry Page- Co-founder/ CEO

Sergey Brin- Co-founder

L. John Doerr- Board of Director
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Eric E. Schmidt- Executive chairman

Nikesha Arora- Senior VP, Corporate development & Chief
legal officer

Patrick Pichette- Senior Vice President
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Internal Analysis

Google’s mission statement:
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Strengths

Weaknesses
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Internal Analysis
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Google’s Value Chain

Raw material: web users

Finished goods: “conversion” or click
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SWOT Analysis
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External Opportunities and Threats
Two examples of Google's SWOT
Analysis
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Opportunities

New Products along with increased positive outlook for
Android

Nexus One and Nexus S
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Android OS
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Opportunities continued

New Products

Google Chrome and Chrome Book
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Threats

Microsoft & Yahoo!


Search engines like Bing and Yahoo! Search
Vertical Search Engine
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Financials

Current Ratio


Gross Profit Margin


Short term assets and short term liabilities
69.7
Net Revenue
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Two-Sided Market
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Global Market Share
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Time Line Trend
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Global Relations Crisis Drops Stock
Prices
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Yahoo
Competitive
Analysis
Bing
Baidu
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
Operating in 50 countries and 25 different languages
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They have good brand recognition

Losing Revenues in the past three years have cause layoffs
through out the company.
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30% of the revenues come from business outside the U.S.
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Differences

They receive income from mobile products, royalties, licensing,
premium e-mails, and advertising
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
Yahoo and Microsoft collaboration started in 2009 effective till 2015.

Currently powering both Yahoo and MSN searches.

Advantages:


Best Resources from each company:
 Combines Microsoft’s new search technology, and Yahoo’s video
and advertising capabilities.
Disadvantages:




Cultural differences
Takes away traffic from their own websites.
Lacks brand recognition compared to Google
Enhanced search capabilities that Google has had for long time.
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 Have
80% of China’s Market Share
 Advantages:
 Better
knowledge of Chinese language
 Better relationship with Government
 Filters
 Similarities:
 Revenue
comes from advertising
 Recently made an investment in Travel Search
Engine
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Google
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What’s Google doing to Combat?
 Investing
in other interests
 Diversifying
 AOL
their product line
partnership
 Helps
AOL with advertising
 Gives Google better video technology
 New

purchase of ITA Software
Enhances Google’s travel tab
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
Low Cost and
Differentiation
Strategy
Low Cost Advantages:

Low operating costs
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Same technology used for all aspects
of the business
Differentiation Advantages:
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Unique formula
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High customer utility
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Strong Brand Value
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Current Industry Standing (Visual
Awakening)

Awareness of Comparable factors (compared to Yahoo)






Cost – less overhead for operations and promotion, search
engine is promotion in itself
Brand Awareness – Google has higher brand loyalty than Yahoo
Views to site annually – Google=82.8% while Yahoo=6.42%
Convenience of Information
Accessibility and ease of use
By Google leading the industry in these key factors, we will not
need to adjust corporate strategy as aggressively.
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Doing What Google Does Best…
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Google does very well at adhering to the hedgehog concept
and follows the three determining factors
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Passion – Google hires employees who strive for innovation in R&D
and enjoy creating new globally accepted, innovating ideas.


Executives allow free time for Google employees to work on
their own projects they are currently passionate about
This helps result in the greatest effort towards new product
ideas and is the reason some of the most innovative ideas are
formulated
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Doing What Google Does Best…
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What Google is the best at is also their mission statement:
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
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Mission – Organize the worlds information and make it universally
accessible and useful
We have best search engine online today (most viewed)
We must continue to have best search engine because 97% of our revenue
is from advertisements
Advertising expenditures for this industry have rose:
 11% in 2008
 3% in 2009
 12% in 2010 for US internet companies ( 1/3 came from American
companies
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Reaching Beyond Current Demand

More people are naturally migrating to online materials for their
information research.

Industry is naturally growing in customer base because online
business is the new status quo for profit and non-profit firms
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Even first time internet users are bound to use Google at some
point to explore the internet.

We should aim to attract soon-to-be customers, rather than
refusing customers or unexplored ones (three tier framework)
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Reaching Beyond Current Demand
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Unexplored customers:
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Refusing Customers:
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People who search information on non-internet resources
Not worth Google trying to attract
Already have loyalty with other search engine
Internet “cult followers” are hard to sway
Soon-To-Be Customers:
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Optimal group for Google to try to reach
These internet users may be unsatisfied with current search engine
Should advertise improvements in our search engine and pointing out
flaws of other ones.
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Google’s Corporate Strategy
“The corporate strategy is usually defined as those strategies
concerned with the board and long term questions of what
business(es) the organization is in or wants to be in, and what it
wants to do with those businesses”

Google is operating the Internet and Computer Software
industry

Google operates primarily in one and only industry

Google’s long term objectives are to move the organization
forward: Growth strategy.
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Google’s Organizational Growth
Strategy
The company implement that strategy through:
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Concentration strategy
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Vertical Integration
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Horizontal Integration
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Diversification
Google operates internationally as its main business support is
Internet.
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Concentration
Strategy
Google meets its growth objective
through increasing its level of
operation in this primary business
Google looks for ways to grow
through different combinations of
its present product(s) and
market(s).
Google’s options to grow:
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Product and Market exploitation
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Product development
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Concentration strategy
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Product and Market exploitation
The product/market exploitation strategy option describes
attempts by the organization to increase the sale of its current
product(s) in its current market(s) .
By developing its core product, Google uses incentives to get
current customers to buy more, or advertises other uses for the
product:
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Google Chrome
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Google Co-Op
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Google Labs
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Concentration strategy
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Product Development
Google focuses on complementary products and services that
are consumed alongside their products or services.
The company developed applications and solutions which
respond to their consumers’ full needs.
Google created new applications that provide a highest level of
product performance, of functionality, of product innovation
and the latest technology.
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Gmail
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Google Scholar
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Google News
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Vertical
Strategy

“Backward” Vertical Strategy:
occurs when a company decides to
merge with or acquire its suppliers

It is the ownership by the same
company of different functions in a
supply chain relating to the
provision of a particular good or
service

Through the years, Google:
 built its own server computers
 built and operated its own data
centers
 wrote much of its internal
operating software
 generates some of the electricity
for its buildings
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Strategy to increase your market share by
taking over a similar company.
This can be done through take overs,
mergers our buyouts.
Horizontal
Strategy
One of the biggest Google buyout was
Youtube,
The combined companies focus on
providing a better, more comprehensive
experience for users interested in
uploading, watching and sharing videos
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There is an ambiguity in either
Google is still operating in a single
business.

Google explores new opportunities
constantly through a solid base of
research and development
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Google use a “related
diversification” strategy as Google
moved into a new industry but
similar to the company’s current
business. Google tried to find a
strategic fit.
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Google Mobile Services
Diversification
Nexus One and Nexus S
Software development kit
for developers to create
applications for
Android-based phones
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Growth Strategy Implementation

Strategy implementation skills are not easily mastered.

Implementation is often defined as the most difficult aspect
of managers work, often more difficult than strategic analysis
or strategy formulation.

Google implemented its growth strategies through several
types of actions:
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Internal Development
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Acquisitions
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Strategic Partnering
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Internal
Development

The fact of growing by creating and
developing new business activities
itself, without the help and action of
other entities.
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Need for resources, distinctive
capabilities and core competencies.

Google has a strong willingness to
accept risks of starting new business:
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Time frame and development costs
associated with the creation of a new
business.
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Google’s 2nd quarter results for 2010
show a 22% increase in internal
development spendings
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Internal Development

One of the biggest internally developed projects of Google
is Gmail
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Initially the software was available only internally as an email
client for Google employees.
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Acquisitions

An acquisition is a corporate action in
which a company buys most, if not all,
of the target company's ownership
stakes in order to assume control of the
target firm.
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Since 2001, Google has acquired many
companies, mainly focusing on small
venture capital companies.
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Google has acquired over 90
companies.
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Today, several of Google’s products are
derived from acquisitions including
Docs, Earth, and YouTube.
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Acquisitions
Google’s biggest acquisitions:
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#1: DoubleClick display ad technology, $3.1 billion
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#2: YouTube video sharing site, $1.65 billion
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#3: AdMob mobile advertising, $750 million
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#4: Postini email security and services, $625 million
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#5: Android mobile platform, "up to" $50 million
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Strategic
Partnering

A partnership is an arrangement where
parties agree to cooperate to advance
their mutual interests.

Google has partnered with many other
organizations for everything from
research to advertising

Among all its partnerships, some were
particularly important and enable
Google to grow rapidly.
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#1: AOL
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#2: GeoEye for Google Earth
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#3: National Aeronautics and Space
Administration (NASA)
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Environmental
Initiatives
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Built the largest solar
panel
Investment in Wind
energy
Investment in enhanced
geothermal system
Operates on 50% less
energy
Recycle 100% of the
electronic waste leaving
Google
Buy food from local
farmers
Donations for bike riding