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Historical Analysis on Google, Case Study Example

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Case Study

A. Businesses in

Google Inc. provides services and products that are related to Internet and is a multinational corporation based in USA. Their product range includes cloud computing, advertising technologies, software and internet search. Company generates most of the profit from AdWords (Google).

Google Inc. was founded by Larry Page and Sergey Brin in 1998 and in 2004 on August 19 company made its initial public offering. Brin and Page together now holds only 16 percent of stake of company. Mission of Google Inc. was “to organize the world’s information and make it universally accessible and useful” and with its slogan “Don’t be evil” which is unofficial. Headquarters was moved to Mountain View, California in 2006 (Google).

Apart from search engine company also offers various products and they are listed below.

  • Online productivity software’s like office suite, email and social networking.
  • Desktop products include applications for instant messaging, editing and organizing photos and web browsing.
  • Android operating system for mobiles and browser-only operating system Google Chrome OS found on Chromebooks, which is specialized netbooks.
  • Acquired Motorola Mobility in 2012 and with Nexus high end series devices and partnership with manufacturers of electronics, Google Inc. became a hardware company.
  • Broadband Internet service project Google fiber manufactures fiber-optic infrastructure.
  • Owns websites like YouTube and Blogger(Google).

Advertising

Advertising programs contributed to 96% revenue of Google in 2011. In 2006 $10.492 billion was gained from advertising and only $112 million from other revenues.

  • DoubleClick technology helps website owners to track how and where people are using their website by examining click rates.
  • AdWords advertisement can be placed in websites that form part of Google content network. With AdSense website owners can display advertisements on their website and gain money per click.
  • Demo Slam is a website for advertising products of Google (Lawrence).

Search engine

Most popular service of Google Inc. is the web search engine Google Search. Market share of Google Search during 2009 in US was 65.6%.

  • \indexing of web pages is used to search by users using operators and key words.
  • Criticisms of copy right violation, relationship with Central Intelligence Agency (CIA) and National Security Agency (NSA) and failure to search certain words.
  • Google Search is offering several services like facility to search images, news, books, Google Map etc.
  • Google Patents is created in partnership with the United States Patent and Trademark Office enabling free access to trademarks and patents information (Google).

Productivity tools

Other than web search services, online productivity tools are also provided by Google.

  • Gmail comes with storage of one gigabyte and similarity to Internet forum. Free storage is over 7600 MB and additional storage of 20 GB to 16 TB available at the rate of US$0.25 per 1 GB per year.
  • Google Docs helps to create, edit and collaborate documents as in a Microsoft word document but in an online environment (Lawrence).

Enterprise products

Google Search Appliance, targets larger organizations and provides them with search technology. Mini targets smaller organizations.

  • Google Site Search is Custom Search Business Edition, where customers gets an advertising-free window into Google.com’s index.
  • Google Apps provides the facility to bring Google Docs and Gmail into the domain of organizations. There are several editions for this service and they are free edition, Google Apps for Education, Google Apps for Business, and Google Apps for Government. There is more disk space, premium support, a service level agreement (SLA), API access and additional apps in special edition.
  • Google Postini Services helps to integrate security technologies of companies into Google Apps.
  • Google Maps, Google Earth and Chromebooks for education and for business are other enterprise offerings of Google Inc(Google).

Other products

  • Google Translate can translate 35 languages and is a machine translation service that is server-side.
  • Google news was launched in 2002.
  • EarthLink is the Internet service provider of Google providing wireless broadband access freely at the city of San Francisco. Free Wi-Fi access is provided by Google in Mountain View, California.
  • Google Fiber offers free ultra-high-speed broadband network and along with that 1Gbit/s internet at $70/month and television service at $120/month is also available.
  • Google Nexus 10 was launched by Google in competition to Apple iPhone.
  • Android operating system for mobiles.
  • Google wave is a service for collaborative communication helping users to collaborate and communicate on web.
  • Google Goggles helps image recognition in Android and iOS mobile.
  • Google wallet helps wireless payments through mobile. Google+ is a social networking service (Google).

Revenue of Google grows every year

Revenue of Google grows every year and it has reached $50.18 Billion USD in 2012 where as it was $0.40 Billion USD in 2002. Bottom line growth became $10.7B USD in 2011 from $9.7B USD in 2010 (Statista).

NAICS Code

519130 – Search engine

518210 – Youtube

518210 – Picassa web

541930 – Google translate

561410 – Google Docs

334220 – Google Mobile phone (United States Census Bureaue)

 

B. Goal clarification and the strategies used to fill these goals

Goal# 1- improved infrastructure to help engineers to be more productive.

Goals of Google are impossible and bodacious but they achieve them. It is the engineering mindset to solve problems that are impossible that forms the part of Google culture. For tough engineering questions solution is to be invented and not optimization of some thing that is already existing will help. Goals are set for quarterly period and are called OKRs (Objectives and Key Results). OKRs are set at impossible levels and then methods to achieve them are figured out (Lawrence).

  • In 2000 Google announced Mentalplex: ability to read mind of users to visualize search results as they want.
  • Releases Google in several languages.
  • Became world’s largest search engine
  • Launched Adwords
  • Released Google tool bar
  • In 2001 Image search was launched
  • Index size became 3 billion web documents
  • In 2002 72 language interfaces
  • Launched Google News with 4000 news sources
  • Released Google labs
  • In 2003 acquired Blogger
  • Launched Google book search (Google)

Goal#2 – Failure is not an option: Google takes great risks and then pushes innovation to achieve it. At Google they are practicing Thomas Edison approach “I haven’t failed, I’ve just found lots of approaches that don’t work, and I am closer to the solution”. Various approaches are tries on setting a goal until they can reach the goal. Success is the only reason for them to stop and they never stop till they succeed (Lenssen).

  • Google video was running good but You Tube out performed Google Videos and so Google bought You Tube in 2006 (Lawrence).
  • Froogle was launched in 2002 but was a failure for the name confused users. Google relaunched Froogle as Google product search (Tsotsis).
  • Google wave was launched in 2009 but the company failed to market it properly. Though Google wave had good fan base Google decided to stop its functioning as a stand alone product in 2010(Fleit).
  • Google failed to outrun Facebook and Twitter with its social networking effort, Orkut in 2004. Though Orkut had some good number of members Google in its effort of advancement started Google + which also failed to establish Google in social networking. Now Google is experimenting with Google Hang Out for finding a position in social networking (Tsotsis).

Goal#3: Achieving 65% of a task that is impossible is better than achieving 100% of an ordinary task. Setting goals that are almost impossible and achieving them to a certain extent is entirely different from a safe route or achieving an ordinary goal by 100%. At times you are able to achieve the goal in a quarter. Even if you haven’t you are in a track fast enough to achieve some thing soon (Tsotsis)

  • Success is measured every quarter and higher goals are set for next time.
  • Google holds 72% market share of search engines where Yahoo has only 13.5% market share
  • Gmail was launched in competition to Yahoo mail, Hotmail and Rediff mail. During 2010 beginning there were 176 million users per month for Gmail (Google).
  • Google launched Chrome in 2008 in competition with Firefox and Internet explorer. With in two years it acquired third place among browsers and for this Google had to make plenty of updates for Chrome. (Fleit)

Goal#4 Rewarding success: If you are able to achieve any thing impossible it is significant to get rewarded. Bonuses for engineering are calculated with an algorithm with various multipliers. Google provides resources to best people available and support them for achieving the impossible. Thus they have the best persons in industry. Though financial rewards are given they are not considered to be primary motivator. Ultimate reward is to work with great people and achieve greatness (Allison).

  • In 2004 Google announced Google Anita Borg Scholarship winner for first time
  • Progress is measured every quarter and outstanding achievements are rewarded
  • Google employees are awarded for breaking a service of Google. Though this sounds weird it helps the company to improve its products every time. (Lynley)

 

C. Environmental Analysis

Political: Political environment of search engines are shaky with law suits regarding competition and intellectual property rights. Boundaries will be set in this regard. Spam law suits are another issue with increase of hacking and spamming and they becoming more sophisticated. Cultural phenomenon is also to be considered by search engines in its product development. Political environment of US is having very less impact on business of Smart phones (Kumar).

Social: Search engines and social media have revealed the trend of no face to its customers. Social media is viewed as a part and mainstay of industry development. Alternatives are provided to social media websites that were typical in form earlier. Google+ is the alternative provided by Google for Facebook and twitter. Laptop/desktop computing will be soon replaced by mobile devices. Competition is increasing among companies to heights that were not foreseen. Reliance of customers on products of various companies is a matter that need to consider (Kumar).

Economic: One of the positive sides of technology companies is growth at stock marker. But there is a chance for various products to be affected by economic recession and its impact on behaviour of consumer. New revenue streams are to be discovered for remaining relevant in an industry that is ever changing. Alliances with established industries are a good option (Kumar).

Technological: There are giants in internet search, advertising, portable applications and software. They have technological advances and innovations in this area. Such companies are also showing their technological power in other fields like smart phones and its applications, broad band connectivity etc. (Kumar)

Legal: It is important for companies to hear customer’s complaints which add to customer loyalty (Kumar).

D. Competitive analysis

Apple:  High end market of tablets and smartphones are owned by Apple. For their products they have a huge ecosystem. Product line of Apple was renewed recently and they are likely to gain market share in competition to Android very soon, in few months time itself (Singer).

Microsoft: Microsoft has come in terms with Yahoo! and is gaining their share of market in a very fast way. They are launching Windows 8 along with Surface products with an idea to enter mobile phone revolution and reinvigorating growth (Singer).

Facebook: Facebook has a strong customer base than any other social networking sites. Facebook has entered online advertising and with a huge number of customers amounting to 1.01 billion and information about them in detail Facebook might find online advertising more profitable (Singer).

Yahoo: Yahoo is not having much market share now and their email service has also lost customers. But with their new tie up with Microsoft they are planning a come back in search business. Yahoo also has got plans to enter mobile business under Marissa Mayer’s leadership (Singer).

E. Strengths and Weakness

Strengths

Marketing –

  • Various products to satisfy customer needs
  • Try to understand customer demand and develop products accordingly
  • Updates products continuously for better performance
  • Advertising is least costly for this can be done through its own websites (Singer)

Finance-

  • Increases its gross profit every year consistently
  • Increasing customer base for search engine and Gmail
  • Stock price is high in share market and is considered as a safe stock by buyers (Statista)

Production and Operations-

  • Most innovative technology
  • Best engineers in the world
  • Setting goals that are difficult to achieve but tries to achieve it
  • Able to understand consumer mind and develop products accordingly (Lynley)

Human resource –

  • Employees are rewarded for all achievement
  • Every achievement even if its small is considered as stepping stone to success
  • Provides credits and rewards for those who are able to break Google’s own products
  • Encourages employees to give new and innovative ideas (Allison)

Accounting –

  • Increases profit every year and invests in innovation for developing new products
  • Gross profit increases every year at consistent rate

Research and Development –

  • Uses technology for developing innovative products
  • Technology is used for updating products continuously

E – Commerce-

  • Provides customers with best customer assistance
  • Helps customers to create awareness about products
  • It is according to customer demand that products are developed (Allison)

Weaknesses

Marketing –

  • Develops lots of products like android, search, Gmail, maps, video sharing, social networking and several other products
  • It is very expensive to market each product.
  • Products are to be withdrawn or killed due to lack of marketing

Finance –

  • Google depends on AdSense for major profit but competitors are entering into same field with lots of customer base.
  • Invests large amount to develop products and kill them after some time if they do not make profit according to expectations.

Production and Operations –

  • Cannot rely on products for company will stop or with draw products at any time
  • Best products for use but not for storage of data
  • Failed to succeed in social networking applications
  • Smart phone do not look attractive and has several technical issues (Lawrence)

Human resource –

  • Employees are to create goals that are not achievable
  • Only highly efficient and talented employees preferred
  • Hard to find apt employees for company

Accounting –

  • Most products are offered free of cost resulting in less profit

Research and development-

  • High investment in research and development leads to huge loss for company when a product is killed or fails
  • Brand reputation will also get damaged due to failure of products

E – Commerce –

  • Lack of marketing causes failure of products (Fleit)
  • Not efficient in many areas other than search engine business and few product line

References

Allison, Scott. Goals at Google. 17 November 2010. 8 March 2013 <http://teamly.com/459-goals-at-google>.

Fleit, Brittany. Google’s 5 Biggest Failures . 13 February 2012. 21 March 2013 <www.maclife.com/article/gallery/googles_5_biggest_failures>.

Google. Our history in depth . January 2012. 8 March 2013 <http://www.google.co.in/about/company/history/>.

Kumar, Neeraj. Iinsta search.com. 4 August 2009. 21 March 2013 <http://www.scribd.com/doc/14053893/search-engine>.

Lawrence, Anne T. “Google, Inc.: Figuring out how to deal with.” Raufflet and Mills. The Dark Side: Critical Cases on the Downside of. Sheffield: Greenleaf Publishing Limited, 2009. 250 – 267.

Lenssen, Philipp. Google’s Internal Company Goals. 26 October 2006. 8 March 2013 <http://blogoscoped.com/archive/2006-10-26-n80.html>.

Lynley, Matt. Googlers Get ‘Achievements’ For Accidentally Breaking Google Services. 14 May 2012. 20 March 2013 <http://www.businessinsider.com/there-is-an-achievement-inside-google-for-bringing-down-gmail-2012-4>.

Singer, Hal. Who Competes With Google Search? Just Amazon, Apple And Facebook. 18 September 2012. 21 March 2013 <http://www.forbes.com/sites/halsinger/2012/09/18/who-competes-with-google-in-search-just-amazon-apple-and-facebook/>.

Statista. Google’s global revenue from 2002 to 2012 (in billion U.S. dollars). January 2013. 20 March 2013 <http://www.statista.com/statistics/74364/revenueof-google-since-2002/>.

Tsotsis, Alexia. There’s No Success Like Failure: Google’s Biggest Product Flops. 18 August 2010. 21 March 2013 <http://techcrunch.com/2010/08/18/is-google-me-nex/>.

United States Census Bureaue. North American Industry Classification System. 2012. 20 March 2013 <http://www.census.gov/cgi-bin/sssd/naics/naicsrch?chart=2012>.

 

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