Google’s Corporate Strategy
To effectively determine Google’s corporate strategy, it is important to divide it into the firm and business levels. The firm-level includes all set strategies concerning acquisitions, strategic alliances, and new start-ups. The business level includes the company’s strategy of following a vast differentiation of complementary products essential for enhancing brand awareness and the use of many other products. Over the years, Google continued to improve its brand image by including its name in its products (Wirtz, 2019). The strategy was similar to advertising because it allowed the company to grow significantly and attain competitive advantage as an exceptional search engine firm. Therefore, the more the company sold its products, the more its brand image and name spread worldwide. Currently, many people and firms rely on Google to access different information and materials they require.
Concerning the marketing strategies, it is clear that the company has never used any advertisements to achieve its current success. However, Google focused on using social media networks to reach millions of people globally. This strategy enabled Google to attain a competitive advantage and become number one because it was viral marketing itself. Moreover, Google’s production and purchasing strategies are introducing a new advanced advertising program with a cost-per-click model paid by the site owners. Moreover, the company continues to invest in new, improved technologies to meet increased consumer expectations. Google has an added advantage compared to other competitor firms because it creates high-performance systems, which reduces significant workloads and is also cost-efficient. Because of the company’s better and more efficient information technology (IT), Google enjoys significant cost advantages compared to other competitor firms such as Amazon, eBay, Yahoo, and Microsoft.
Generally, Google currently has strategic alternatives such as product modification, current market share, and market modification. When Google implements such strategies, it will continue its operations and survive stiff competition from other giant firms. Moreover, the company can use the strategies to resolve its current product problems to ensure it meets the current market demand. However, market modification is the best option for the company to implement among the three strategies mentioned above. The strategy will help Google enhance its impression by improving current users’ search frequencies and new customers. Currently, the company continues to experience stiff competition from other companies, and it tries to develop new strategies to remain afloat in the market.
Porter’s Essentials Test
Google’s investing in new and improved technologies creates a competitive advantage for the company because it remains updated regarding consumer expectations. The company will use such technologies to manufacture products that best meet the market demand and expectations, thus enhancing the annual sales. Porter’s Essentials Test comprises three different tests that can help to inform Google’s cooperative strategy to determine if the strategy will allow the company to attain a competitive advantage or not (Grant, 2016). Based on the first attractiveness test, Google’s diversification plan is attractive and will allow the firm to create shareholder value and attain a competitive advantage in the market. Google’s strategy focuses on manufacturing products that best fit the market needs, and which pass the advertisement test.
Based on the cost-of-entry test, investing in new technology is cost-effective because it allows the company to reduce significant workloads and improve the production process. This way, the company achieves a competitive advantage against all its other competitors within a short period. Google will be better positioned by implementing the strategy because it ensures the company ventures into a profitable business that can generate high annual incomes (Grant, 2016). The Porter’s Essentials Test offers a clear indication that the company will achieve a competitive advantage in the current mart and continue to grow because of their continued investment in the production process to meet the consumer needs at a significantly lower price.
Threats Google is Facing
The main threat Google is currently facing is stiff competition from other companies. With technological advancements and increased people’s reliance on the internet, other organizations started to develop search engines such as Yahoo and Baidu which began competing with Google. Facebook is currently Google’s most significant competitor because it surpassed Google by becoming the most visited website. Since 2010, the two companies have continued to compete with each other for the top position. Facebook poses a clear threat to Google. The company’s annual revenue began to decrease since many advertisers began favoring Facebook because it gathers crucial data about its users. The company began finding new, better ways of ensuring it regained its competitive advantage against Facebook in the market.
With the significant reduction in its primary revenue source, Google began to focus on other development areas. A few years later, the company developed Google Chrome to help recover from the significant hit on its income revenue. Developing Google Chrome was the company’s aggressive tactic of competing with Microsoft company which was also posing a threat to its overall operations. They created the website browser to combine a minimal design with its sophisticated technology in making the web faster, safer, and more accessible for all users (Mazzei & Noble, 2017). The company saw an increase in the number of users who visited its website. Not long after, Google Chrome became the most used website browser globally, which gave the company a competitive edge against all its competitors. The user-friendly interface provided by Google Chrome makes it the favorite web browser of others such as Mozilla Firefox and Opera Mini. The search engine led to an increase in the company’s annual revenue.
With the introduction of smartphones in the market, the company decided to acquire Android to start developing the android software platform as an operating system for smartphone devices. The new acquisition helped the company to improve its competitiveness in the market by increasing its annual income. Many smartphone companies continue to rely on Android software to manufacture their mobile phones (Mazzei & Noble, 2017). Such companies include Samsung, Oppo, Nokia, and Oppo, except Apple Inc. and Huawei which currently have their software. The company continues to grow today, and it is among the top giant global firms with significant annual income. Google currently can modify many market segments to fit its needs, which helps them attain a competitive advantage in both new and existing markets. Despite the existing threat of stiff competition, Google shows significant efforts and potential for growth and success.
The Android acquisition was a significant success for Google because it managed to stop Apple Inc. from dominating the smartphone industry. However, Google feared that the acquisition was not enough because of the increasing competition from new rising companies. Therefore, the company decided to acquire Motorola, a handset maker firm with multiple patent portfolios. Acquiring the Motorola company enabled Google to attain a competitive advantage in the market. The company then incorporated its search engine and other products they previously developed into smartphones to enhance its influence globally (Mazzei & Noble, 2017). Google intended to expand its operations into more technological sectors by incorporating itself into such markets. The firm made many profits with the newly acquired Motorola company before the profits began to decline because of poor product sales.
Google Needs to Refocus
There is a need for Google to refocus because it points out that the firm needs to review and consider all they are doing and work. Change is consistent in all companies, which means that Google will need to assess its new database to determine the right direction need to take. The company currently specializes in software, search, hardware, cloud computing, and technologies. Therefore, the option to refocus will allow the firm to determine new, better ways of accessing new markets, increasing their annual sales, and targeting more customers to develop their market coverage.
However, Google needs to focus and invest more in smartphones and other electronic devices that can easily access the internet so that people get to enjoy and use their other products and services. There is no need for the company to drop any of its current products. Instead, they should improve such products’ efficiency and effectiveness to retain their competitive advantage and increase their annual income. Since the company already invested a significant amount in its current products, it should focus on finding ways to make them more marketable instead of abandoning or divesting them.
Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Mazzei, M. J., & Noble, D. (2017). Big data dreams: A framework for corporate strategy. Business Horizons, 60(3), 405-414. Web.
Wirtz, B. W. (2019). Google/Alphabet case study: In digital business models. Springer Link, 207-236. Web.