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Google in China
Google in China
Google in China
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Assignment Title: Analytical Report of Google
Contents
1. Introduction......................................................................................................................................4
1.1. Google LLC...............................................................................................................................5
1.2. Google Operations in China.....................................................................................................5
2. Google's Mission, Vision, Goals, Objectives, and Business Model Review....................7
2.1. Mission and Vision Statement Review...................................................................................7
2.2. Goals and Objectives.................................................................................................................8
2.3. Google LLC's Business Model.................................................................................................8
3. Strategic Management Concepts, Internal, and External Environment............................8
3.1. Strategic Management Concepts............................................................................................8
3.1.0. Swot analysis of Google LLC............................................................................................9
3.1.1. Market penetration strategy............................................................................................10
3.1.2. Product development strategy.......................................................................................11
3.1.3. Market development strategy.........................................................................................11
3.1.4. Diversification strategy....................................................................................................11
3.2. Internal Environment................................................................................................................12
3.3. External Environment..............................................................................................................12
3.3.0. Political factors..................................................................................................................12
3.3.1. Economic factors...............................................................................................................13
3.3.2. Socio-Cultural factors.......................................................................................................13
3.3.3. Technological factors.......................................................................................................14
4. Alternative Competitive Strategies to Address Google China's Scenario......................14
4.1. Rivalry..........................................................................................................................................15
4.2. Customers..................................................................................................................................15
4.3. Suppliers.....................................................................................................................................16
4.4. Substitutes..................................................................................................................................16
4.5. Exit/Entry Obstacles.................................................................................................................16
5. Ethical Principles and Socially Management Values...........................................................17
5.1. Google's Socially Responsible Management Values.......................................................17
5.2. Google's Ethical Principles....................................................................................................19
6. Key Elements in the Execution of the Recommended Strategic Plan.............................19
1. Introduction
The government of China manages the internet and social media use through a broad
both local and foreign internet companies in an attempt to attain total control over
internet and technology use across the country. Internet companies have to adhere to
companies have to comply with regulations and measures from quite a number of
regulatory agencies such as the Ministry of Culture, the State Administration of Press
and Publication, Radio, Film and Television, the Ministry of Industry and Information
restrictions, and agencies an internet company has to adhere to brings out the question
of whether it is logical and economical for foreign internet companies to start or continue
with their operations and businesses in China, despite the country boasting a great and
This analytical report aims at providing a choice to the dilemma of whether Google, a
multinational American internet and social media service provider, should continue with
its operations in China or withdraw its operations from the country. By reviewing the
company's mission and vision statements, the report will relate the question at hand
with the company's goals and objectives. This will be followed by a review of the
strategic management concepts used by Google, their impact on the situation in China,
and any alternative strategies that can be applied to better solve the dilemma. Putting
into considerations the ethical issues and socially management values and policies
employed by Google LLC, the report will recommend a management strategic plan and
the elements that are necessary for the execution of the plan.
Google LLC is an American multinational search engine company, that was founded in
1998 by two Stanford University students, Larry Page and Sergey Brin. The company,
formally Google Inc., is a subsidiary of the Alphabet Inc. holding company. In a very
across the world, edging out competitors such as Apple Inc. and Microsoft.
The company was initially started to serve the purpose of online searching but has
grown to provide over 50 internet services and products. Ranging from e-mail services,
online document creation, online advertising, google videos, apps, maps, social
networks to mobile and tablet computer software amongst other several Google
products and services, this wide range has been pivotal for success rapid growth of
google over the last three decades. However, the road hasn't been smooth for google
series of lawsuits, conflicts with specific countries (such as China) over operation
regulations, amongst other operation challenges, have been facing the company.
Google China, a subsidiary of Google LLC, is tasked with the provision of Google
services and products in China, was founded in April 2006, and has its headquarters in
Beijing. However, quite a number of factors have hindered the success and growth of
Google in China. These hindrances range from stiff competition, especially by China's
greatest search engine Baidu, to strict government regulations and restrictions on the
provision of internet services. A series of conflicts between the Chinese government and
Google have seen google fail to secure a great percentage of China's internet market
share.
displaying footage that showed Chinese security officers unlawfully beating Tibetans.
The blocking was responsible for a decrease in Google's Chinese market share, which
was lost to their fiercest rival, Baidu. In 2010, a hacking attack originating from China
and targeting Google, together with other American information technology companies,
saw Google give up on their online search services in China. Google has not been able
to provide services such as Gmail, Chrome, and search engines in mainland China
since 2014.
Despite these many challenges Google has faced in its China's operations, they have
always vowed to continue with research and office developments in China without
giving up. One of the reasons for not giving up is due to the vastness of the Chinese
market and the growth opportunities the market offers. Google LLC has made several
attempts in trying to get back to mainland China and also grab a greater percentage of
China's internet market share. It held Google Development days annually in China in
2016, 2017, 2018, and 2019, as well as a Future of Go Summit with the Chinese
government. All these have been in great vain as Google's market share remains to be
3.42 percent, far much shy of Baidu's 71.13 percent (Cartwright, 2020). Google suffered
a blow in its efforts to launch a search engine in Mainland China in 2018 when their
dragonfly project was shut down following allegations that it would use spying tools on
users. Following the Hongkong national security law's enactment, Google has resolved
not to respond to any data requests by Hongkong authorities. Google China stated that
they would have Hongkong authorities go through the Mutual Assistance Treaty with the
U.S.
A company's mission and vision statements represent a powerful position of the specific
company in the global market. Google LLC's mission is to organize the world's
information and make it universally accessible and useful. The company has been
putting efforts and focus on the development of its proprietary algorithm to maximize
challenges and woes google faces in China, it has fought battles in ensuring and
prohibited by the Chinese government could not be found in the google search engines,
google argued against the prohibition stating that removing search results and showing
no information was inconsistent with their mission. Google's mission statement creates
a base for the foundation of their strategies, which are majorly needed in determining
information relevant at any topic at question. The statement shows the company's goal
of service and product provision to the whole world. Thus, entering and succeeding in
the Chinese internet market is driven by the corporate vision of Google. The vision
statement pushes the company to venture and achieve new heights by employing
different strategies. For instance, Google China has been venturing and trying new and
rapid innovations in attempts to secure a greater percentage of the total Chinese market
share.
Google LLC's primary goal is to provide its users with the most relevant and the highest
attainable quality of results based on the users' searches while still maintaining their
desired profit margin. The company seeks to meet the needs of its users and their
advertisement clients. However, Google has not succeeded in meeting its service users'
needs in China due to the strict regulations and restrictions by the Chinese government.
The fourth chapter of this report will seek to provide and recommend strategies that
Google LLC can put in place to achieve their goals and objectives in China.
Google is a leading online internet service and product provider. The major source of
revenue for the company is advertisements. In 2010, Google generated about $21
billion, 95 percent of which came from advertisements made through its search engine
and the AdSense program (Wirtz, 2011). With only around 3.5% share of the total
Chinese internet market, Google's business model hasn't been successful in the
country. To lead in earning revenue from online advertisements in China, the company
Strengths
2. The company has a high capability for rapid growth and technological innovation
3. Google LLC has invested much in the diversification of products, services, and
markets.
Weaknesses
2. The company does not have enough control over consumer electronics that use
Opportunities
Opportunities are the external factors that enable or provide an organization with the
potential to grow and improve. Google has the following opportunities to exploit;
1. With its innovative strength, it has the ability to develop new products and
3. Expand the use of Chromebooks across the world, together with other consumer
electronics.
These are the external business factors that hinder the operations and the ability of an
2. Strict regulations and restrictions that hinder the company's growth and
operations.
Google LLC relies much on market penetration as the core and primary growth strategy.
This strategy helps in keeping and maintaining the company's position as one of the
valuable brands in online services across the world. The strategic goal is to acquire as
many customers as possible from the current markets of the company. The company
has already attained a leadership position in the market share owned in some countries
such as the United States. In other countries such as China, the company faces stiff
competition and has to relentlessly put more effort and strive to attain bigger market
shares. The intensive growth strategy determines how the company uses its marketing
mix to grow.
The company also relies on the generic strategy to create great influence in the
competitive landscape and in the development of the online advertising industry, and
other services depended on the use of the internet. The generic strategy ensures
competitive edge. The competitive advantage ensures entry into new markets, thus
The product development strategy is a secondary strategic approach for growth used by
Google LLC. Its objective is to develop products and services which, when sold,
increase the revenues of the company. Innovation is key to developing products and
nature of google. The strategy involves new product lines and new services, such as the
introduction of new mobile or computer tablet apps. Google creates more products and
avenues for service provision for more revenue generation and also for rapid market
penetration. For instance, the plan to introduce the dragonfly search engine in China
was innovative, despite the external environment's prejudgment, which led to the failure
especially in areas or industries where the company's operations are absent or of less
The internal environment consists of the factors or events that affect the employees,
management, and organizational culture within the organization (Chen & Mohamed,
2008). From the mission statement of Google, it is evident that the company's primary
interest is not profit maximization. The company has its interest in meeting the needs of
its customers by the provision of high-quality products and services at speed desired by
customers and efficiently. It is the people employed by and working within the company
Google strives to maintain an open culture within the organization. The company serves
a very diverse customer base in terms of culture, and thus to be able to meet their
External environment factors are factors not found within the organization but influence
the activities and performances of the organization (Kefalas, 1980). The external
environmental factors of Google LLC include political factors, economic factors, socio-
One of the major aspects of Google's strategy is government stability. During times of
good political stability, businesses receive backing and help from the governments.
Hence, businesses do more advertising to increase their market share and grow. Lots of
advertising benefits Google. In China, the government has created barriers for google
by implementing regulations that deny Google the right to operate in the country. This
affects the performance of Google in China, though its impact on its general
The rise in the gross domestic products (GDP) over the years across the world is an
indication of good economic conditions. The world's GDP has been on the rise at an
annual average of 3.2 percent, and at times reaching a high level of 17.70 percent
(Garrett, Donald & Gaston, 2020). With continued growth of the GDP, the internal and
external investments of Google will always be high in number. It will be expected that
internet users will search more, and thus more adverts will be put on the available
search engines. In china, the GDP has as well been on the rise over the past few
decades. Entry into the Chinese internet market with a greater owning a greater market
Google's success has made it a leader. Its mission is to organize the information of the
world and make it accessible universally, as well as useful to everyone. Factors such as
boundaries on which category to serve or not. Thus, its operations are guided by its
anywhere can advertise with Google, and that increases the company's profitability.
These are the factors that determine an organization's response to the fast advancing
technology, and thus their impact on the performance of the organization. Google's
innovative concepts and technologies are core to its success. Google has been on the
frontline in making technological innovations and evolution, an aspect that has helped it
become the leading company in the online internet industry across the world. Tools such
as the AdSense program, Google map, Google talk, among other technological
innovations, are proposed to make users' lives easier, practical, entertaining, and
efficient. However, Google's technological factors have not had a great impact on
China's online market due to government regulations that forbid Google from conducting
Google has been faced with several backs in their attempts to remain competitive in the
Chinese internet market. Several attempts and strategies have also been initially put in
place but did not bear substantial fruits, especially due to threats from stiff competition
from Baidu, the Japanese market, and also strict government regulations hindering its
growth. However, more efforts could be put in place, and using new competitive
strategies, Google can still attain their goals in the Chinese market.
Based on the analysis of the strategies Google has been using, this report recommends
Google to apply Porter's five forces in evaluating their rivals, opportunities, and other
market conditions.
4.1. Rivalry
One of the reasons behind Google's extension of its services and products to China was
the company's mission statement. To fight the stiff competition in China, Google aimed
at acquiring Baidu, an attempt that never succeeded, resulting in the sale of all the
Baidu shares Google had owned. The failed acquisition meant that Google missed on
regulations put in place by the Chinese government makes the survival of Google in the
country even more difficult. These regulations could be attributed to Baidu's close
relationship with the Chinese government. However, Google can capitalize on the
can succeed in acquiring Baidu once more. A partnership with Baidu for internet service
provision in China can also be of great help. Thus, this report recommends Google to
4.2. Customers
In 2002, Google expanded its market coverage to China, Korea, and Japan, targeting
share domination in the three countries. Despite the move, Baidu still dominates the
Chinese market. In 2010, Google raised concerns over hacked websites and accounts
by the Japanese (Long, Gardner & Brown, 2011). Such concerns were of great
magnitude and posed the threat of losing customers due on the grounds that there is a
lack of privacy within Google accounts. The hacking also led to Google withdrawing
some of its services and products from, and thus a negative impact on the attempts to
acquire a greater market share in China. The report recommends advanced security
4.3. Suppliers
The latest developments in the Chinese government can have tremendous and
negative impacts on Google supplies Google in the country. Threats concerning the
privacy of google products can lead to a decrease in customer numbers and hence a
decline in the number of supplies and suppliers. This will drawback all the attempts by
Google to acquire a more significant share of the Chinese market. Thus, Google needs
to ensure a continued supply of its products in China and maintain high privacy
standards.
4.4. Substitutes
discourages the growth of Google LLC by directing it to quit and cease its operations in
China. The adverse business environment on Google reduces the competition for the
local companies. Thus, Google risks seeing its products substituted for the local
companies' products. For Google to mitigate the risk of product substitution, it has to
The company has been facing several obstacles upon entering the Chinese market,
as well as its mission and vision statement guidelines. Google stated that it was
unreasonable for the government of China to sensor some of its websites, accounts and
information (Quelch & Jocz, 2010). This discourages and even threatens other
companies that may have an interest in venturing into the Chinese market. The
discouragement protects the local companies from new foreign competitor companies.
Thus, it would be indecisive for Google to quit the Chinese market, as re-entering will be
too difficult due to the protective regulations imposed by the Chinese government to
Ethical principles are one of the ways through which an organization can put its values
into practice (Hamilton, Knouse & Hill, 2009). Ethical principles are usually built around
the recognition that anything an organization does well and should be measured against
the highest standards of ethical business conduct. Management values refer to a set of
moral standards that have been set by society dynamics, traditions, institutions, and
cultural beliefs. Values provide guidelines that are essential for the orientation of
i. Integrity
Google LLC upholds its reputation that its customers can have trust in the company. To
the company, trust by customers is the most valuable asset, and it's a company's duty to
ensure it earns trust from customers. Communication with customers is essential for
earning trust. Trust by customers is essential in their endless efforts to earn a greater
ii. Usefulness
Google LLC operates on the principle that its products, services, and features should
make the company more useful to the users. The guiding principle is 'Is whatever
Google is offering useful?'. The usefulness of Google's products, services, and features
significantly in China could be a determinant of its success in its venture into the
iii. Responsiveness
received and what action does the company takes. Responsiveness is part of being
useful and honest. How the company responds to customer queries and concerns is
influential to the company's customer retention rate. To enter and succeed in the
and concerns.
Google LLC is a company that has a lot of personal customer information entrusted to it.
For customers to entrust Google with such confidential information, they must have trust
that their information will be kept confidential and secure. Google's privacy and security
policies strictly prohibit the access of users' personal information and require that the
company ensures measures to protect user data from unauthorized access are always
kept in place. However, in 2010 the company's privacy and security were potentially put
to the test in China when the company's user accounts were hacked.
The company is committed to advancing the freedom of expression to its users across
the world. At times when user privacy and freedom face government setbacks, like the
situation in China, the company should seek to implement the internationally recognized
v. Action Taking
Google management operates on the value of taking the appropriate action to better
their services whenever they feel that users are not well served. This leads to
Google is committed to ensuring the usefulness of its products and services to its users,
a principle that could be more helpful in increasing its market share in China.
The company ensures fairness and consistency in how it treats its employees and users
in all aspects of Google's interactions, policy establishments, service provisions, and all
iii. Transparency
Google LLC is open and transparent concerning all its activities and operations in all its
sectors. It ensures transparency regarding the frequency with which concerns and user
complaints arise and takes the appropriate approach in investigating and responding to
iv. Accountability
The company holds any individual responsible for their actions and ensures that where
The report has recommended Google to apply Porter's five force strategy in their
attempts to attain a considerable market share in China. The key forces in the strategy
are rivalry, customers, and the consideration of the exit/entry obstacles. Google has to
put more effort into fighting rivalry and in acquiring new customers in the competitive
market.
There are several key elements in the execution of the recommended plan. Google LLC
has to ensure that consistency and commitment are upheld when facing a rivalry
challenge. Consistency in persuasion efforts to acquire Baidu will bear the desired fruits.
These elements are also vital in obtaining new customers in the target market and
and services to reduce the risk of product substitution and avoid the
iii. Ensure high levels of privacy and security for user information to avoid
hacking.
after investing.
vi. Evaluation Strategy: The company will evaluate the strategy's success
by the use of the statistics of the company's market share in China and
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