Google Diversification Strategy

Tian Xia
10/29/2019
Related diversification strategy is a multiproduct strategy that determines what
markets the business should be in. Diversification is: “the entry of a firm or business unit
into new lines of activity, either by process of internal business development or
acquisition, which entails changes in its administrative structure, systems, and other
management processes”[1]. These are factors Google considers when releasing a new
product. Google has hundreds of products that it is so diverse, many of these products
appear to hold the same core competencies but beyond these values there are distinct
differences. Each product provides something different to the customer and has its own
niche. Thus Google follows both an unrelated and related diversification strategy.
Google search engine, Google+ and Android are all major examples of valued
but yet very different products. All three products help fulfill Google’s mission of
providing the world’s information in an easier manner. However, Google search engine
is a browser website/tool that helps us find other items on the internet in competition
with entities such as Yahoo! and Bing. Google+ is a social media, organization
conglomerate that is in competition with Facebook. While, Android is a mobile phone
operating system used to support applications, browsing, and other cellular items.
These three products assist an individual in organizing, consuming or simply storing
information following the main value of Google, yet they are immensely different
products.
Larry Page once stated “Google is not a conventional company. We do not
intend to become one”. This statement represents the culture of Google and
emphasizes they will do whatever it takes to fulfill their mission, through any creative
endeavor, idea, or movement. There are many distinct aspects of Google and this is
due to some of the company policies. For example, engineers are encouraged to spend
20% of their time on projects of their choosing, which spawns new initiatives, products
and ideas. The main value behind allowing autonomy to Google’s workers is to create
projects that extend the core business and to create fundamentally new businesses[2].
In addition to talents and company’s culture, Google also has superior computing
infrastructure, extensive customers portfolio, and powerful search engine as shared
resources and capability in different branch of businesses in the company.
One of the issues ​with this diversification strategy is that the company will be
likely to have overextension on its business. If diversification isn't approached with
caution, the result can be running out of company's resources. So every division of a
corporation, no matter how large, needs enough resources to maintain its infrastructure
and operations or it will begin to decline[3]. If, through mismanagement, excessive
ambition or simple greed, a company's directors seek to expand in too many directions
at once, both old and new sectors of the company may suffer from lack of attention and
insufficient resources.
To sum up, Google follows both an unrelated and related diversification model.
While its products are all based on the same values, they are vastly different tools,
industries and consumer bases. This balance makes Google unique and therefore a
powerhouse in this information age.
 Work Cited

[1] Wauters, Robin. “Google Buys Motorola Mobility For $12.5B, Says ‘Android Will Stay
Open.’” ​TechCrunch​, TechCrunch, 15 Aug. 2011,
http://techcrunch.com/2011/08/15/breaking-google-buys-motorola-for-12-5-billion/​.

[2] Colt, Geronimo. “Google's Competitive Advantage & Strategy.” ​ToughNickel,​ ToughNickel,
23 Feb. 2019, ​https://toughnickel.com/industries/Googles-Competitive-Advantage-Strategy​.

[3] Xaxx, Jagg. “The Disadvantages of Diversified Business.” ​Small Business - Chron.com​,
Chron.com, 26 Oct. 2016,
https://smallbusiness.chron.com/disadvantages-diversified-business-22155.html​.