Google Case Study

Julia Sheridan Prof. Omansky Business Policy September 27, 2015 Google Problem: In 1995, Stanford University graduate students Sergey Brin and Larry Page founded the popular search engine, Google. The main function for Google was to connect its users with their desired information through web searches. A company that began as an algorithm, has grown into the most successful search engine across the world. While Googles’ main source of revenue comes from supplying pertinent, cost effective, online advertisements they continue to expand their product line into other aspects of technology. Google has developed applications such as Google Earth, Google Video, Google Maps, and Gmail while also creating products such as the Google Glasses and a self-driving car. Google has also ventured into the world of mobile phones and tablets with the acquisition of Android. This has enabled Google to turn a small firm into one of Apple’s biggest competitors. Even though Google successfully remains in control of their market, competition is always an issue to be aware of and concerned with. Though Google has endless amounts of funding and resources, they are not left without concern. The primary issue facing Google is the question of what should they do next. Facts: Google is already the number one search engine Confusion of Paid Listing Privacy Google Books, Videos, Maps, Earth Acquisition of Android in 2005 Google Cloud Competitors: Microsoft, Yahoo!, eBay, Apple, Amazon Google Glasses, self-driving car Alternative Solutions: Technology is a world of constant improvement and transformation, and with its ever-changing property comes new competing parties hoping to break into the market. Because of this, it is difficult for Google to eliminate the competition completely. In order to keep control over the market they must continue to keep their services user friendly while improving them with the help of new, intelligent, motivated employees. The simplicity of Google is what initially attracts users to their pages. However, the complexity of the cost per click and its accuracy has turned off companies from using Google for advertisement purposes. It would be in the best interest of the company to deliver more accurate costs to their potential advertisers for their listings. Along with issues regarding paid listing Google has also been criticized for their disregard to privacy. Advertisers and online publishers have reported feeling that Google has used their content improperly, which has ultimately led to many lawsuits. Respecting the privacy of advertisers, publishers, and users will keep a positive reputation with all shareholders and lead to even greater success. Fixing simple internal issues will continuously keep the separation between Google and their competitors. Deciding to focus on the original mission of Google, to develop search solutions through advertisements, or to continue to branch out into new areas of technology are the areas were Google must make a decision. They must do so keeping in mind new ways to stay a step above their competition. If Google decides to stay in the same markets they have already branched into and limit further expansion, they must perfect the things they already have their hand in. If Google were to decide to expand into new areas, they will need to start by researching, questioning, and testing the markets in which they want to enter. A slow expansion will be more likely to lead to success. Google can start with each competitor’s most successful product, begin to develop similar more advanced tools, and then surpass the current technological experience for users. The competitors Google faces, such as Microsoft and Yahoo!, have different markets and products than other competitors, such as eBay and Amazon . Google will have to keep in mind that expansion and development solutions are going to vary based on each competitor. Pros and Cons: Pros of Google staying focused on developing solutions through advertisement Stay in control of their share of the market Focusing on existing products does not require new employees or extensive research Less risk Less likely to become a Monopoly Further separation between competition in certain areas Cons of Google staying focused on developing solutions through advertisement Stagnant, no growth Passing up more revenue Letting competitors gain new markets Potential loss of employees for lack of growth Pros of Google emerging into new markets Potential for new revenue Greater market control Eliminate competitors Bring a new technology experience to consumers Cons of Google emerging into new markets High Risk Potential for loss in revenue Trying to enter to many markets losing focus of their strengths Failure and losing already gained market share Decision: In order to keep up with the ever-evolving field of technology, Google will need to try and expand into other markets with the creation of new products. While it is the safer option to stay within their comfort zone and focus on what they are already successful at, it will not lead to future success – Google will become stagnant. Google is known for their ability to keep up with social trends and in the world of technology, if you’re not constantly looking for the next big idea, you’re falling behind. Google has large amounts of cash and resources allowing them to make the transition into new markets. The ability to pull out and reevaluate is always an option. The rapid success rate of Google is a good indicator that they will continue to be successful with the release of new products. Evaluation: The timeframe for Google to produce new technologies isn’t very long. The successes or failures of Google will be apparent quickly after the new technologies are introduced. Due to the fact that things like revenue, asset turnover, overhead costs, and other financially based evaluations are easy to determine, I would evaluate changes on a quarterly basis. If profitability is decreasing without any indication of a projected increase in the next quarter there is a high probability that the project at hand should be reevaluated and possibly even eliminated. Google is also very concerned with the culture of their employees so feedback from employees on a four-month basis gives them a chance to adjust and take on new projects. Changes in a company should constantly be evaluated and tracked to ensure success but the product also needs to be given enough time to develop before making a terminating decision.