Table of Contents

1.0

Case summary.......................................................................................................................2

2.0

Background of Google..........................................................................................................2

2.1 Core Business........................................................................................................................3

2.2 Companys mission statement...............................................................................................3
2.3 Companys Vision statement.................................................................................................4
2.4 Values.....................................................................................................................................4
3.0

Internal Analysis...................................................................................................................5

3.1 SWOT Analysis of Google....................................................................................................5

Strengths......................................................................................................................................5
Weaknesses..................................................................................................................................6
Opportunities...............................................................................................................................7
Threats.........................................................................................................................................8
4.0

External Analysis..................................................................................................................9

4.1 Porters 5 Forces Analysis.....................................................................................................9

5.0

Value Chain Analysis..........................................................................................................11

6.0

Resources, Capabilities & Core Competencies..................................................................12

6.1 Resources.............................................................................................................................12
6.2 Capabilities..........................................................................................................................12
6.3 Core Competency................................................................................................................13
7.0

International Business Strategy of Google.........................................................................14

7.1 Factors Determining the Business Strategic Level..............................................................15

7.2 The International Business Level Strategies used by Google..............................................18
8.0

Mergers & Acquisitions......................................................................................................19

9.0

International Corporate level Strategy................................................................................20

10.0

Strategic Challenges Of Google.........................................................................................23

10.1 Androids Strategic Challenges..........................................................................................23

10.2 Strategic Challenges in China............................................................................................24
10.3 Strategic Challenges for Privacy.......................................................................................24
11.0

Recommendations...............................................................................................................25

12.0

Conclusion..........................................................................................................................26

13.0

Bibliography.......................................................................................................................27

1.0 Case summary

Google has been one of the top search engines ever since they came into the field. This case
study mainly focuses on its acquisitions and innovation over the past years. Products and various
diversification strategies they practice in order have the edge over their competitors (Hanson,
Hitt, Ireland, &Hoskisson, 2011). Furthermore it also emphasizes on Googles company structure
and its continuous innovation which was consistent enough to survive in the Digital market. The
case study also statues the facts that Google faced when they entered the Chinese market.

2.0 Background of Google

PhD student, Larry Page and Sergey Brin from Stanford University initiated the Google project
as a research at the University. After few years of testing the Google Guys were induced by
their project and got into the conclusion that it was the best search engine which would provide
everything people are going to look for. Later they decided to recruit new investors and on
September 7, 1998 the company was incorporated under the name Google Inc.
(Google
Portal, 2006)
Moreover Google began to get loyal users to their site simply with their clean and clear design,
which also satisfied customers with top results and giving them what exactly they were looking
for, since then over the years Google has evolved to provide quality service.
Furthermore, after years of successful existence, by then end of year 2008 Google became one of
the most powerful brands in the world. Growth of Google solely was because of its smart
decisions, a few would be acquisitions, new product development, continues research. Google
was always up in the Digital Market. Google also made it a point to launch something creative
more often so the customers would always count on Google for something innovative. Google
has now positioned itself as a top search company, making them the best search engine in the
internet space. Moreover Google also is strong in its financial side of the business.

2.1 Core Business

The core business of Google can be put into three main categories. Google once explained its
main principles behind its three core businesses: search, ads and apps. "Search is our core
technology; ads are our central business proposition; and apps are the umbrella over our webbased software that you can access anywhere, any time," according to Google.
Googles search works in the following manner. Google returns the most appropriate answer by
evaluating and taking information form an algorithm system, it also returns in less than half a
second.
Google's search ads operate in the following manner: Google allows ads to appear on top of the
search list by ranking each ad depending on its importance. Most Google ads are for commercial
queries and business purposes.
Google Apps works in the following manner: Google apps allow users to store information
which includes pictures, documents etc on a cloud system, which means its not linked to any
specific computer, yet it could be accessed from anywhere using a computer or a smart phone
with a security code of course.
(Google Explains its Core Businesses, n.d.)

2.2 Companys mission statement

To organize the worlds information and make it universally accessible and useful.
(Tart,
2010)

2.3 Companys Vision statement

To develop the perfect search engine.

(Tart,
2010)

2.4 Values
Ten things we know to be true! When Google was a few years old, since then they kept adding
up values to their business.

Since Day one Google has made it a point to provide the best user experience even if it means to
develop a new home page or a site.
Google wants to do what theyre best at! Solving problems!
Google wants to be as efficient as possible! They also quoted We may be the only people in the
world who can say our goal is to have people leave our website as quickly as possible.
Democracy on the web works, Googles search results are based on a PageRank algorithm.
This allows pages to stay on top of the search results depending on the relevant information it
provides.
Google not only wants to provide web solutions but also mobile. To me Googles information
accessible through mobile phones too.
Make money without doing evil. Google earns money by allowing Google ads, 1000 of users
worldwide use Google ad sense to promote their business, which makes Google earn money
without being evil.
Theres always more information out there. This might need a bit more creativity when looking
up for things on Google.
The need for information crosses all borders. Google wants information provided to everyone
around the world, in every language.
You can be serious without a suit, Google makes work fun for their employees so they would
work for effectively and efficiently when the work culture is fun.
Great just isnt good enough, Google wants to make sure if something works well they always
want to improve it in every possible way.
(Company, n.d.)

3.0 Internal Analysis

3.1 SWOT Analysis of Google

A SWOT analysis is comprehended as an essential tool which supports an organization to match

its internal strengths to external opportunities. It can be described as an assessment of the
strategic position of an existing organization by evaluating its strengths, weaknesses,
opportunities and possible threats (Griffin, 2012). A SWOT analysis was conducted on the
company Google to recognize the internal factors that would affect its performance.

Strengths
Financially strong situation with growing revenue - Google is one of the most profitable
companies in the world and as the preeminent of the world-wide-web in the year 2013, it
embraces a profit of US11 billion and a market capitalization of about US$ 392 billion (Google
Inc, 2014).
Most used search engine Google has access to an enormous market that it can use in order to
promote and sell its products and services, that is; 89 percent of the mobile search market users
and 79 percent of the world desktop search market users globally therefore it is clearly much
ahead of other search engines.
Large scale business growth strategies - Google owns many world popular eminent labels
such as the Google search engine, YouTube , Google plus, Gmail, Google docs ,Google nexus
and various other software associated to internet and mobile computing comprising the Android
operating system which dominates the worlds market share. (Google Inc., 2014).
Innovative work culture and strong patents range - Every year Google provides numerous
unique products and in 2012 the Boston Consulting Group (BCG) states Google as the second
most innovative business in the world while the company was also the second most patented
product creator in the world. Therefore Google demonstrates its innovative work culture to be
one of its main competitive advantages (Strategic Management Insight, 2012).

A skilled and dedicated workforce - the staff at Google are given abundant up keeping by its
management and they are also fundamentally offered with all they need at their working
premises. Consequently since the workforce is aware that the company is dedicated to their
employee well-being they have good productivity the work done is more effective and efficient
(Girard, 2009).
Good product integration and excellent customer satisfaction Relevancy of search results
and speed causes customers to be well satisfied while almost all the Google products are
integrated together to work in a complementary mode to a high level unlike any other tech
organization that enhances customer experience . Moreover most of their products are of high
quality and are open source and can be freely used on many devices. This further boosts
customer satisfaction which is another competitive advantage of the company with added
demand for its services (Strategic Management Insight, 2012).

Weaknesses
Relying on a single source of income - Googles main income which is about 90 percent is
generated from online advertising. Online advertising is expected to have a very rapid growth in
the short term but it might not be stable in the long run due to a few reasons like the deterioration
in the desktop search engine market and there will be high competition for its main income
source. Insignificant or very low incomes are predicted to come from emerging economies since
they pay less for online advertising when compared to developed economies (Singel, 2011).
Unprofitable products - Google comprises some products that do not add value to the
companys profits and consequently leading the company to lose money. Examples for such
products are Google reader, Google labs and Google health (Thomson, 2013).
Patent litigations - Google has frequent involvements in lawsuits over the penetrated patents
and other intellectual property and these proceedings tend to be time consuming and expensive
while it diverts the company towards litigation when the main focus should be innovation
(Finley, 2014).

Opportunities
Entry into new markets (Electronics, home automation etc.) While Google started as an
online search technology provider gaining revenues from online ads, Google has now stepped
foot in the electronics industry with devices such as the Nexus smart phones and tablets as well
7

as the new Motorola smart phones after the acquisition of Motorola. With acquisition of
companies like Nest, Google is now stepping into the home automation sector of the market
along with NFC technology, which greatly helps in the process. Google could strengthen its entry
into electronic devices industry by introducing more products for more customer groups and cut
out its market share. This would result in tighter integration of its software products and
diversified income.
Increasing acquisition of patents - For Google to grow and to compete successfully, it has to
obtain more new patents. One way of doing that is to acquire companies that have strong patents
portfolio. Google has acquired Motorola in 2012, obtaining more than 17,000 patents from the
business (Lumsden, 2014).
Driverless cars and Google fiber as means of improving ad sales With driverless cars,
drivers can focus the time spent on concentrating while driving on surfing the web, and hence,
can increase the ad revenue for Google. The company could also sell licenses for car
manufactures for using their technology and IP. Google fiber on the other hand, increases the
speed of browsing, hence increasing the number of ads served per day. Google is currently
testing their new fiber cables that can deliver Internet content at astonishing 100 times as fast as
current providers. It is wise for Google to invest in such infrastructure that virtually would have
no competition and would integrate the company vertically (Bilger, 2013).
Growing number of mobile Internet users - Google has an opportunity to create a platform
that could be used to better display ads for mobile device users and increase firms income.
Ability to capitalize on offline ads market with products such as Chrome cast While the
main revenue source for Google remains as online ads; online ads only make up 18% of the total
advertisements. With products like Chrome cast, Google is looking to enter the home
entertainment market and capitalize on the huge offline ads sector.

Threats

Competition from rivals such as Microsoft and Apple at both hardware and software fronts
With Google stepping into the Smartphone industry, it faces stiff competition from Apples
flagship Smartphone and tablet products such as the iPhone and iPad. In addition, Microsoft has
also emerged as a worthy competitor in the already crowded Smartphone market through its
8

windows phone 8 mobile operating system and its acquisition of Nokias devices and services
division of the business.
General public distrust in company after leaks showing Google worked with the
Government and compromised personal data security Leaked documents showed that
Google along with other major companies had complied with the Government and provided huge
amounts of data that includes both personal information and preferences and patterns to the
government. This has decreased the public trust in Google and if more such scandals were to
arise, the public due to security concerns would shun both Googles products and services
(Sahagian, 2013).

Growing number of mobile Internet users - Google finds it hard to monetize mobile Internet
users, as there is less space to place ads on a mobile device and the ads costs less than usual. The
growing number of mobile users means fewer searches made on the personal computers and
lower income growth or even decline for Google.

4.0 External Analysis

4.1 Porters 5 Forces Analysis
Porters 5 forces analysis was used on the company Google to recognize the external factors that
would affect its performance and in order to understand the industry attractiveness and
profitability.
Bargaining Power of suppliers : Low

Partners and programmers can be considered as Googles suppliers and at present their
bargaining power is low and should remain low for Google to maintain their market dominance.
Google also introduces an attractive package for employment and retaining. Phones with
Android operating systems are a success and have great sales hence all mobile phone companies
who are suppliers are put to a very low power position.
Bargaining Power of Buyers : Moderate
Both the advertisers and the receivers are Googles clients. There are numerous search engines
with high competition and people are able to use alternative search engines although Google has
a greater consumer awareness or popularity because it provides free linked user friendly services
into a range with better and faster performance. Google relies on advertising to generate revenue,
so clients can choose not to use Google services therefore buyers have a moderate potential to
control pricing.
Threat of New Entrants: Low
Google has gained the current level of strong market control with several years of investments
and expansions by segmenting into different extents. Due to high level of entry barriers and the
immense initial capital and research that need to be done over time which is needed to shape a
competitor for all the online services and products of Google the threats of new entrants would
be low.
Threat of Substitutes: Low
The internet is the prime source for gathering information and making queries and Google is the
search engine that has the most relevant and quickest results consequently with a market share of
70% from all search engines Google has positioned itself for long term success on the internet. If
there is a threat of a substitute it obliged to offer something additional with significant value for
potential consumers to switch into using the substitute .At present customers prefer Google and
there is a low threat of new substitute.
Competitive Rivalry: High
The main competitors of Google are Bing (Microsoft), Yahoo and Baidu (Chinese) but Google
controls the majority of internet services. Google is the most used by consumers and its
competitors currently cannot par with innovations such as Google Earth and Street View. Yahoo
10

and MSN both constantly update their services while Google also faces rivalry from social media
like Twitter and Facebook. The Android operating system that was introduced by Google is also
in high competition with Apples iOS therefore the competitive rivalry can be comprehended to
be high. (SGiarrosso, 2012)
(Market Share Statistics for Internet Technologies, 2013).

Search engine market share

12%
Google
Yahoo
Microsoft

25%
63%

11

5.0 Value Chain Analysis

The primary activities in the value chain of Google differ from a traditional value chain since
Google does not engage in producing physical products. Raw materials at Google, generally take
the form of human assets such as programmers and designers and complete products (apps and
other services), which are then available to be purchased to a client directly. Google accumulates
all the web clients it can by tempting them to utilize its stellar search engine with very relevant
results being conveyed quickly. Google increases value not just by running an amount of web
clients to particular sites, but also by additionally sorting the qualified guests utilizing essential
keyword associations and search history to perceive clients, Google guarantees that the clients
who are coordinated to a partner site are more prone to buy an item there.
(Morrow,
n.d.).
Google's primary activities in its value chain are forcefully subject to the supplementary
activities of organization and human assets. Google has constantly attempted to contract the most
qualified and capable people to guarantee that it exceeds expectations at the innovative work of
its engineering and frameworks. The organization regularly gives tests and challenges to help
recruitment specialists filter through the enormous amounts of resumes they get.
(Morrow, n.d.)
Googles infrastructure and systems come in as the second biggest amount in its expenditure.
Google's servers and interior programming permit it to lead operations, appropriation, deals, and
administration. Every action helps the value chain by expanding the benefit of the firm. Google
has areas everywhere throughout the world to limit appropriation, promoting, and administration
which thusly guarantees most extreme benefit on a worldwide scale. Benefit is augmented by the
organization's social mindfulness and social ability to tailor products to the local needs of its
clients. By moving exercises topographically, Google can likewise exploit differing qualities
from a human resources point of view furthermore maybe lower pay rates in nations other than
12

the United States. Google has even started outsourcing some of its copy writing with firms in
India.
(Morrow, n.d.)

6.0 Resources, Capabilities & Core Competencies

6.1 Resources
A resource can be classified as anything that a company has which can be bundled together in a
productive manner in order to produce an output that is favorable and profitable to the company.
Resources generally take on two forms; Tangible resources which includes machinery,
equipment, raw materials etc. Intangible resources refer to those, which cannot be touched such
as ideas, brand image, goodwill etc. While tangible resources are easier to replicate by
competitors, intangible resources are harder to do so and provide a firm edge over the
competition.
In the case of Google, its resources lie dominantly in its intangible resources such as innovation
through creative ideas and innovative products and as such are difficult to recreate by
competitors. Tangible resources play a part of supplementing the intangible resources to perform
at their optimum level. However, with a fluid and changing core competency philosophy, Google
is slowly moving to a more hardware based company and as such its tangible resources will play
a more pivotal part in its operation in the future.

6.2 Capabilities
Capabilities are resources, which have been bundled together cohesively to perform a specific
task or set of tasks. These tasks can range anywhere from managing of the human resources in
the organization to producing and developing a new product.
Googles capabilities firstly include the ability to recruit the best and the brightest in order to
work on their creative ventures, be it selling ads or perfecting the effective search engine. Later
on, Google will use its technological prowess and cutting edge software to become a more
hardware oriented firm as well.

6.3 Core Competency

Google's core competency is tackling unpredictable and huge information issues. They utilized
this to make the best web browser, a dynamite map item and are applying it to other intriguing
13

issues interpretation and heading toward self-driving vehicles. The organization is truly
extraordinary for examining complex issue spaces, yet not all that solid as changing over their
answers into reasonable organizations. Google has now adopted a more fluid and changing
model of core competency which permits it to retain its roots of strength (The core competency
as a search engine with ads), while also moving towards a more product oriented future with
innovative products like driverless cars.
Simplicity and flexibility
One of the main characteristic of any site would be "KYC" or 'Know Your Customer's'
rationality. Taking into account the examination of client interest, Google can tweak its
administrations furthermore rapidly dispatch destinations in new areas. In testing times, Google
has ended up something of an image of success & achievement. Google proposes a "practically
blissful cure to average quality" by holding fast to some essential standards which other site
gathering were not equipped to hold in their procedures
Globalization
Google is available in 160 distinctive neighborhood nation areas and 117 languages all over the
world. While Google is accessible practically all over the place there is web get to however
worked in just 20 nations. Google is even now attempting to create huge business vicinity in
spots, for example, Middle East. As they are growing their operations and contract their first
representatives in alternate countries, that some think of Google feels like a startup. They have
begun Google.org with the thought of obscuring the effect of Google itself while concentrating
on more charitable reasons. Despite the fact that they are dealing with greatly intense issues in
troublesome areas, they have made critical pace. They have built a few principle center ranges,
including foreseeing and counteracting malady; enhancing open administrations by illuminating
and enabling individuals as per the areas; and expanding monetary development and occupation
creation through animating little and medium undertakings.

14

7.0 International Business Strategy of Google

International strategy is where a business trades its products of goods or services outside their
local market boundaries (Hanson, Hitt, Ireland, & Hoskisson, 2011) . Google has adopted many
strategies in order to run the business. Mainly Google was keen on business level strategies
where it shows a differentiation through innovation on its products and services. This strategy
involves focused differentiation and integrated differentiation strategies as well.
Google has become very strong with its unique customer base along with its usage of strategies.
Differentiated business strategies are used by Google to serve its customers with varieties of
products and services. This strategic move of Google makes the company t gain a competitive
edge over the rivals in the market.
Google is very well known for its service of search engine. Google has made some uniqueness in
its product by using a patent system called Page Rank. This system will make the users to find
the most reliable and better results according to their searches. Page Rank system used to get
constant update and the workers at Google use it confidentially as it will be very difficult for the
competitors to figure out how Google is doing better and having a competitive advantage among
rivals. (Business Level And Corporate Level Strategies Of Google, 2014)
Google has another product which helps the companys differentiation strategy and its been
known as Google Ad Words. This is been used as an advertising tool as in the Google search
engine. This tool focuses on reaching the qualified set of people effectively and efficiently as
much as possible. Google does not receive any upfront payment to advertise online by managing
and creating Ad texts for companies. (Business Level And Corporate Level Strategies Of Google,
2014)
Google also has segmented its product and services according to the willingness of customers.
So that Google has Gmail, Ad Words, Picasa, Google Chrome, Google Earth and G1 Phone.
15

These activities of Google created an added advantage through the establishment of Google Ad
Words. Google is a very common search engine and used by many people around the world due
to its delivery of information which very reliable for people. Along with that Google Ad Words
bring credit to the company as its the most surfed advertising platform and it does hold about 69
percent market share. (Business Level And Corporate Level Strategies Of Google, 2014)

7.1 Factors Determining the Business Strategic Level

Factors of Production
The factors of production are very helpful for an organization be stable in the market and enable
them to earn profits and create a competitive advantage over the competitors. The factors that
Google has used are such as Land, Labor, and Capital etc...
Land
Google has come a long way from working in a dorm room, garage and moving themselves into
a headquarters in California with all the latest technology equipments which is well known as the
Googolplex. According to Google in today contest they have more than seventy offices in forty
different countries around the world. Even though Google offices differ from each other yet they
share few similar features such structure, culture, interior and behavior (Google, 2014)
Labour
Google differentiates it company from other company because of its work force are determined,
very well experienced. Although the mission and vision are the same the culture and the
language differs in the contest of different countries. Google makes their employees feel
comfortable and a friendly environment with each other and furthermore there are several
activities for the employees to reduce stress such cycling, pooling etc. (Google, 2014)
Capital
There are many capital investment of Google's. They are as follow, Technology they use such as
their computers, the hardware of servers, and other electronic equipments that help them run the
organization and successfully compete in the market. The other investment of Google comes
from the stakeholders. (Google, 2014)

16

17

Demand Conditions
Google has generated a primary demand to consumers by providing goods to their customers by
giving the modern technology products to facilitate the customers in day to day life. Google
generates products and services which is widely available around the globe for free to reach and
attract customers. The main concern of Google is it that there an increase in the demand of their
products and services because it help their consumers to communicate to others easily such their
product Gtalk. In today's world contest Google has many improved features such to watch and
upload videos which is currently the most successful operating product by Google. (Google,
2014)
Related and supporting industries
It is well know that Google is a militia national and involves so many people talents and hard
work to deliver a better product and service to its consumers. Google has much subdivision there
are many departments for each of their products where they create new ideas using their talents
to improve and compete with its competitors. Google is been supported by the government, the
telecommunication industry and mainly the defense to protect their information without going
viral. (Google, 2014)
Firms Strategy, Structure and rivalry

18

7.2 The International Business Level Strategies used by Google

Google is following ten business strategies to remain in the market and meeting the changed face
of the web.
Googles one of the main concerns is to increase the level of comfort and happiness through
experiencing a simplified service. The home page is very simplified and gives a clear picture to
the audience. Rapid Change towards positivity: The search engine of google delivers best
possible and reliable results currently. But constantly working on to deliver much better results
for the browsers in the near future. Google always wants to deliver the results as soon as they can
to the people who are searching for information on Google. The team believes that the results
should be delivered fast and the users should leave the pas as quick as possible after the
requirement is satisfied. Google Chrome is the latest browsing tool of Google and which suits the
modern day requirements of people and which will make things better as its meant to be. Google
even uses the democratic approach in its achievements. Because Google depends on the
interactions happening between many individuals around the world though posting links and
blogs on websites. As mentioned earlier Google does provide simple and reliable results for the
users and the rivals are planning to do the same by providing reliable content. This process is
confidential and well qualified programmers are working on it. The even introduced source
software development to the team and taking the maximum use of it to give the best possible
results. Google makes browsing easier for people. During the past decade it was the concept of
using desktops and Google was only accessible on the table computers. Now a day's technology
has changed and Google provides applications to all the smart phones and other media devices.
Make legal money. Google help you to earn money by posting your ads using Ad Words and
taking advantage of Ad Sense program to deliver ads relevant to their site content. The Google
search engines provides so many search results on a certain topic browsed and makes it open for
the users to surf more on the results displayed. Google is accessible in many languages and can
be reached from any part of the world on its link. Provides various kind of information according
the request made. (Essays, 2014)

19

8.0 Mergers & Acquisitions

A merger or an acquisition can be defined as the amalgamation of two or more companies in to
one single company. The difference between a merger and an acquisition lies in the way it takes
place. Generally a merger occurs through a process of negotiations between companies in order
to generate synergy. In other words, two companies would come together with the intention of
using each others competencies to strengthen their stability in the market. An acquisition refers
to a situation where a company entirely buys another organization, where the company which is
acquired usually ceases to exist. This mostly occurs through the purchasing of shares.
Acquisitions can take place through friendly negotiations or through hostile means also referred
to as hostile takeovers.
(Roberts, Wallace, & Moles,
2012)
Organizations merge or acquire another company for a strategic value; it is due to advantages
such as the ability to increase market power, to overcome entry barriers, to minimize the cost of
new product development and to increase diversification. For instance, Google has incurred more
than $28 billion in acquiring companies since 2001, some of them have been able to generate
huge amounts of profits while others proving to be failures (Stunt, 2014).
Google recently bought SlickLogin, an Israeli startup that uses high-frequency sound waves as
the basis of a smart-ID login system and a few weeks ago they bought Nest, a company of which
develops thermostats and smoke alarms that are connected to the internet. Google was also
targeting robotics companies and surprisingly Makani Power, a firm that develops airborne wind
turbines. They have also acquired companies such as Calico, who researches ways to confront
ageing. And the list goes on. Google has always been much more than a search engine with
its advertising, but the recent purchases of Google imply that the ad-and-search empire is
evolving in to different directions.
(Stunt,
2014)

20

Within the past two years alone, Google has spent a staggering $17 billion US on acquisitions. It
tops what all its competitors (Apple, Microsoft, Amazon, Facebook, and Yahoo) have spent
combined, according to data collected by Bloomberg (Stunt, 2014).
According to David Lawee, the mergers and acquisitions chief at that time, Android has been one
of the best deal ever made by Google, spending $50 million on the company (Smith D. , 2014).
It is currently the most-used Smartphone operating system in the world. Initially, Android was in
smart phones, but now it is used in tablets, televisions, car systems, video game platforms, and
wearable devices for one's wrist and one's face (Smith D. , 2014). Therefore, it can be stated that
Android is certainly the most important acquisition of Google.
Obtaining YouTube for $1.65 billion was also another major acquisition, where You Tube is still
the world's biggest video sharing site even after being acquired by Google (Smith D. , 2014).

9.0 International Corporate level Strategy

A companys corporate level strategy refers to the industry or market that they wish to compete
in. The corporate strategy links an organizations mission with corporate objectives. It helps to
minimize the gaps between the potential and real performance of an organizations activities. The
interdependence of objectives, policies and organized action is crucial to the particularity of an
individual corporate strategy and its opportunity to create competitive advantage. There are two
dimensions of a corporate strategy, namely how diversified and how vertically integrated an
organization is.

In terms of Google, though search and advertising is their main revenue

generators, they have moved on to applications, mobile features and many other segments.
(Gallagher,
2003)
As discussed above, through mergers and acquisitions Google has been able to venture in to new
market segments. Shar VanBoskirk, Vice President and principal analyst of interactive marketing
at Forrester believes that the reason being Google diversifying its product and services portfolio
is not because it has to, but because it has the ability to do so while generating more money by
entering new markets (Yegulalp, 2013).
21

Source: International Business: Competing in the Global Marketplace- (Hill, n.d.)

As illustrated in the figure above, International Corporate level strategies can be stated as
follows:

International Strategy
Multi domestic strategy
Global strategy
Transnational strategy

Organizations would pursue an international strategy when competitors in foreign markets lack
the skills and products that they possess. Many international organizations have created value by
transferring their innovative products and services to new markets. An international strategy is
beneficial if the core competencies of an organization are completely unique and thereby faces
less pressure to locally adapt itself. In such circumstances, an international strategy can be very
profitable. However, when the need for local responsiveness is high, firms pursuing this strategy
would prove to be ineffective in the face of firms that emphasize on customizing the product
offering and market strategies to suit local conditions (Global Integration and Local
Responsiveness Strategies, n.d.).
Google uses a global strategy as it provides a standardized service to the entire world considering
the world as one. The benefit of pursuing a global strategy is the ability to increase profitability
by reaping cost reductions. The production, marketing, and R&D activities of firms pursuing a
global strategy are concentrated in a few favorable locations. Global firms prefer to market a

22

standardized product worldwide so they can reap the maximum benefits from the economies of
scale, since customizing is costly (Global Integration and Local Responsiveness Strategies, n.d.).
Firms that pursue a transnational strategy try to simultaneously achieve low costs and benefits
through differentiation. Pressures for local responsiveness and cost reductions place conflicting
demands on a firm. Being locally responsive raises costs, which makes cost reductions difficult
to achieve. Transnational strategy combines the main advantages of multi-domestic and global
strategies while minimizing their disadvantages (Global Integration and Local Responsiveness
Strategies, n.d.).

23

10.0 Strategic Challenges Of Google

10.1 Androids Strategic Challenges
Sustaining the growth of Android in the market is one major challenge that Google faces as
Android is not a commercial entity, but a platform and the company that gets Android-powered
devices into the hands of consumers is Samsung. Therefore, the growth of Samsung in the
market would determine the success of Google. In terms of competitors, Apple is competing with
Samsung, while the iOS of Apple is competing with Android of Google. Apple's iOS platform
runs only on the iPhone and the iPad and despite the wide use of Android, it is quite difficult to
find a single Android-based Smartphone that can reach the iPhone in terms of overall popularity.
(Kline,
2014)

Source: (Kline, 2014)

The above diagram shows that Android has more than twice as many connected devices as
Windows and has an even greater lead on Apple's iOS (Kline, 2014). But, Android has a
fragmentation problem, because Android developers must build apps for a wide range of screen
24

sizes and processing power levels. This usually makes it impossible for users to obtain future
Android updates and a result the adoption of the latest version of Android has been slow. In a
recent study, Baird Research found that developers are especially concerned with Android
fragmentation, in fact, 24 percent of respondents has said it is a "huge problem (Reisinger, 2011).

10.2 Strategic Challenges in China

China is a market than any organization would want to expand into due to its population of over
13 billion people. Unfortunately, Google was not able to be successful in this market due to them
being unable to adhere to the censorship laws of China. Google was also threatened by Baidu,
the search engine which holds a dominant market in China. At present, it is difficult to
use Google in China as it is slow and one must first launch a virtual private network before
utilizing Gmail, search, and Google Translate. Googles need to make information available
across all borders does not seem to be welcomed by all countries and cultures. Google will have
to adhere to the laws in China if they wish to continue their operations in China and stop
providing uncensored content in China.
(Lafraniere,
2010)

10.3 Strategic Challenges for Privacy

Data protection authorities (DPAs) in the EU are becoming increasingly frustrated with
limitations to their ability to control Google's power in collecting and using personal data. The
company has come under increased scrutiny after a privacy settlement in 2011 with the Federal
Trade Commission on privacy concerns over the rollout of Google's social-networking service,
Buzz. The commission claimed that Google engaged in deceptive practices when it has
automatically signed up Gmail users for Buzz without users consent.
(Data
Protection, 2014)

25

11.0 Recommendations
Google is a well-established global giant, but since they are competing on a global level they
need to be proactive to changes occurring in the world outside, while being engaged in
continuously innovation. The recommendations given below are some areas that Google need to
consider in order to sustain their current position in the global market, while formulating their
international strategies according to the market.
A second source of income Google completely relies on online ads which generate ninety
percent of the company revenue. However, online ads only make up eighteen percent of the total
advertisement market. Hence it is wise for Google to explore the offline ads market.
Monetize Mobile Computing-. Google can make use of the mobile platform to place online
advertisements, when Google is used as a search engine as mobile computing is an upcoming
trend. For example, online location based ads can be used, such as when a smart phone user is
browsing for a restaurant, the nearby restaurant can be displayed.
Increase privacy of user and strengthen public trust Handing over sensitive information of
users to the US government is a main issue that has decreased consumer trust on the Google.
Google will have to ensure confidentiality and reinforce their privacy policies.
Widen the online advertising network: Google can expand its audience and its revenue if they
acquire or partner with third party websites such as Wikipedia, Amazon and E-bay.

26

12.0 Conclusion

27

13.0 Bibliography
5 secrets. (n.d.). Retrieved 01 12, 2014, from Forbes.
Acs, Z. J. Handbook of Entrepreneurship Research.
Advantages and Disadvantages of Acquisitions. (n.d.). Retrieved 2014 23-January from
Business Management Strategy:
http://businessofaccouting.blogspot.com/2010/04/advantages-and-disadvantages-of.html
AFP. (2013, January 23). Google 2012 revenue hits $50 billion, profits up. Retrieved January 16,
2014, from Dawn: http://www.dawn.com/news/780915/google-2012-revenue-hits-50billion-profits-up
Basu, C. (n.d.). What Core Competencies Give an Organization Competitive Advantage?
Retrieved August 26, 2014, from Hearts Newspapers:
http://smallbusiness.chron.com/core-competencies-give-organization-competitiveadvantage-34568.html
Bilger, B. (2013, November 25). Has the self-driving car at last arrived? Retrieved January 20,
2014, from The New Yorker:
http://www.newyorker.com/reporting/2013/11/25/131125fa_fact_bilger
Business Level And Corporate Level Strategies Of Google. (2014). Retrieved 27 August 2014,
from http://www.ukessays.com/essays/marketing/business-level-and-corporate-levelstrategies-of-google-marketing-essay.php#ixzz3BLDB7gQe
Business Strategy. (n.d.). Retrieved 2014 23-January from Google.lk:
http://www.google.lk/about/jobs/teams/business-strategy/

28

Cassiman, B. (2006). In Search of Complementarity in Innovation Strategy: Internal R&D and

External Knowledge Acquisition. MANAGEMENT SCIENCE , 68-82.
Chao, C.-C., Fan, Z., Lin, J., & Saha, A. (n.d.). Analysis of Googles Strategy on Android.
Company. (n.d.). Retrieved January 16, 2014, from Google:
http://www.google.lk/about/company/
Company - Our culture. (n.d.). Retrieved 2014 23-January from Google.lk:
http://www.google.lk/about/company/facts/culture/
Company. (n.d.). Retrieved August 25, 2014, from Google:
http://www.google.lk/about/company/philosophy/
Data Protection. (2014, April 1). Retrieved August 26, 2014, from Pinsent Masons LLP:
http://www.out-law.com/en/articles/2014/april/opinion-on-big-data-privacy-andcompetition-may-be-latest-marker-in-closer-scrutiny-of-google-says-expert/
David, C. ,., Joanne, E. O., & Brian, S. S. (1996). Strategic Alliances and Inter-firm Knowledge
Transfer. Strategic Management Journal , 77-91.
Edwards, J. (2014, August 15). Ugly Data For Apple Shows How Desperately It Needs iPhone 6
To Be A Hit. Retrieved August 24, 2014, from Business Insider:
http://www.businessinsider.com/android-ios-market-share-data-and-apples-iphone-62014-8#ixzz3BaFfzsya
Essays, U. (2014). Business Level And Corporate Level Strategies Of Google Marketing Essay.
Ukessays. Retrieved on 27 August 2014, from
http://www.ukessays.com/essays/marketing/business-level-and-corporate-level-strategiesof-google-marketing-essay.php#ixzz3BLKE536u
F.Kurtko, D. (2007). Coperate Entrepreneurship. Now Publishers.
Finley, K. (2014, January 14). Google and Apple Surge Ahead in Race for Patents. Retrieved
January 18, 2014, from Wired: http://www.wired.com/wiredenterprise/2014/01/googleapple-patents/
Gallagher, S. (2003, February 14). Corporate Strategy. Why Does Firm Performance Differ?

29

Global Integration and Local Responsiveness Strategies. (n.d.). Retrieved August 24, 2014, from
finnovation: http://www.fhinnovation.com/global-integration-and-local-responsivenessstrategies/
Google. (2014). Google locations. Retrieved 25 August 2014, from
http://www.google.com/intl/en/about/company/facts/locations/
Google. (2014). Our culture Company Google. Retrieved 26 August 2014, from
http://www.google.com/intl/en/about/company/facts/culture/
Google Explains its Core Businesses. (n.d.). Retrieved August 24, 2014, from
http://googlesystem.blogspot.com/2010/03/google-explains-its-core-businesses.html
Google Patent List. (n.d.). Retrieved January 18, 2014, from ArnoldIT Home:
http://www.arnoldit.com/lists/google-patents.asp
Google Portal. (2006). Retrieved August 20, 2014, from The Pennslyvania State University:
http://faculty.ist.psu.edu/bagby/432Fall06/T4/history.html
Gruenwald, J. (2012, January 5). Google on the Defensive Over Privacy Changes. Retrieved
August 2014, 2014, from National Journal Group:
http://www.nationaljournal.com/tech/google-on-the-defensive-over-privacy-changes20120125
Hanson, D., Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2011). Strategic
Managment:Competitiveness & Globalisation,4th ed. South Melbourne,Victoria:
CEngage Learning Australia Pty Ltd.
Hertig, A. (2014, March 14). Google Challenges NSA, China With Internet Search Encryption
Scheme. Retrieved August 25, 2014, from Reason Foundation:
http://reason.com/blog/2014/03/14/google-challenges-nsa-china-with-interne
Hill, C. W. (n.d.). Strategic Choice. In C. W. Hill, International Business: Competing in the
Global Marketplace.
Jackson, L. (2013, July 23). The Real Secret of Googles Corporate Culture. Retrieved January
17, 2014, from Corporate Culture Pros:

30

http://www.corporateculturepros.com/2013/07/the-real-secret-of-googles-corporateculture/
Kline, D. (2014, April 1). How Android Won the Operating System Market Share Battle.
Retrieved August 25, 2014, from The Motley Fool:
http://www.fool.com/investing/general/2014/04/01/how-android-won-the-operatingsystem-market-share.aspx
Lafraniere, S. (2010, March 14). China Issues Warning to Major Partners of Google. Retrieved
August 25, 2014, from The NewYork Times:
http://www.nytimes.com/2010/03/15/world/asia/15google.html?_r=0
Luebke, R. (2010, July 30). Peter Drucker on Innvation. Retrieved January 25, 2014, from
Innovation Excellence : http://www.innovationexcellence.com/blog/2010/07/30/peterdrucker-on-innovation/
Lumsden, J. (2014, January 24). Google patents ads that include a free ride to the store.
Retrieved January 24, 2014, from Click: http://www.clickonline.com/tech/google-patentsads-that-include-a-free-ride-to-the-store/22381/
Mauborgne, K. a. (2005). Incremental Innovation Vs. Radical Innovation. Retrieved January 25,
2014, from Incremental Innovation: http://www.incrementalinnovation.com/incrementalinnovation/incremental-innovation-vs-radical-innovation
Micheal Hitt, D. I. (2012). Strategic Management: Concepts and Cases: Copmetitiveness and
Globalisation. Cenange Learning.
Morrow, B. (n.d.). Internal Analysis of Google Inc. Retrieved August 24, 2014, from
http://benmorrow.info/blog/internal-analysis-of-google-inc
Reisinger, D. (2011, April 19). 10 Critical Android Issues Google Needs to Address Soon.
Retrieved August 24, 2014, from QuinStreet: http://www.eweek.com/c/a/Mobile-andWireless/10-Critical-Android-Issues-Google-Needs-to-Address-Soon-847119/
Resources, capabilities and core competences. (n.d.). Retrieved August 26, 2014, from Biz/ed:
http://www.bized.co.uk/notes/2012/02/making-use-resources-capabilities-and-corecompetences

31

Roberts, P. A., Wallace, D. W., & Moles, D. P. (2012). The Concept of Mergers and Acquisitions.
Mergers and Acqusitions , 1-7.
Sahagian, J. (2013, November 15). Google: Government User Info Requests Have Doubled
Since 2009. Retrieved January 20, 2014, from WallSt. Cheat Sheet:
http://wallstcheatsheet.com/stocks/google-government-user-info-requests-have-doubledsince-2009.html/?a=viewall
SGiarrosso. (2012, 12 March). Google: Porter's Five Forces. Retrieved August 24, 2014, from
wiki.com: http://mis7160team4.wikidot.com/forum/t-449120/google:porter-s-five-forces
Singel, R. (2011, July 19). How Does Google Make the Big Bucks? An Infographic Answer.
Retrieved January 17, 2014, from Wired:
http://www.wired.com/business/2011/07/google-revenue-sources/
Smith, C. (2013, November 22). Google could end China's web censorship in 10 days why
doesn't it? Retrieved January 25, 2014, from The Guardian:
http://www.theguardian.com/commentisfree/2013/nov/22/google-end-china-webcensorship-10-days
Smith, D. (2014, August 12). The 11 Most Important Google Acquisitions Ever. Retrieved
August 20, 2014, from Business Insider: http://www.businessinsider.com/importantgoogle-acquisitions-2014-8?op=1#ixzz3BQavYDia
Stunt, V. (2014, February 19). Why Google is buying a seemingly crazy collection of companies.
Retrieved August 20, 2014, from CBC: http://www.cbc.ca/news/technology/why-googleis-buying-a-seemingly-crazy-collection-of-companies-1.2537110
Tart, N. (2010, October 29). Mission, Vision, Values: The Foundation of Your Business .
Retrieved August 25, 2014, from JuniorBiz: http://juniorbiz.com/mission-vision-values
Toto, S. (2008, August 31). Google's Strategy In Japan: Avoid Yahoo And Take Over The Mobile
Web First. Retrieved August 25, 2014, from AOL:
http://techcrunch.com/2008/08/31/how-to-break-quasi-monopolies-in-international-webmarkets-%E2%80%93-the-google-japan-approach/

32

Yegulalp, S. (2013, May 20). Google's next act: Diversify and conquer. Retrieved August 22,
2014, from InfoWorld: http://www.infoworld.com/t/technology-business/googles-nextact-diversify-and-conquer-218839

33