Google

Group 6:
Kenna, Julia, Maria, & Aayush
History of Google

● Founded in 1998 by Sergey Brin and Larry Page

● Subsidiary of Alphabet, Inc.
● Emergent Strategy with bottom-up approach to management
● Business model focused on monetization strategy, profitability, and cost
structure
○ Differentiation
● Advertisements are main source of revenue
Mission and Goals

● Mission statement: “to organize the world’s information and make it universally accessible
and useful”
● Goals:
○ Maintain search engine as efficiently as possible for people to search the internet for relevant
information all around the world
○ Deliver the most reliable and relevant and reliable information available
○ Maximize access to information
○ Present information in the most useful way
○ Protect consumers’ privacy
○ Sell ads
○ Help creators succeed online
Evaluation of CEO

● CEO: Sundar Pichai

○ Appointed CEO in August 2015
○ Joined Alphabet Inc.’s board of directors in December 2017
○ Humanitarian, relationship-builder, collaborator, communicator, visionary, transformational
○ Genuinely cares about employees and their success
○ Focus on cloud computing and AI
Analysis
PESTEL Framework: Search Engine

● Political: Calm international relations in order to maintain wider free

trade
● Economic: Growth of developing nations to expand tech usage
● Social: Public view of advertising operations
● Technological: Growing internet access in developing countries,
growing availability of mobile devices in developing countries
● Environmental: Growing support of sustainable business practices
to better their reputation
● Legal: Increase in online privacy regulations, growing restrictions on
customers personal data
Five Forces Model

● Competitive rivalry
○ Large number of search engines
○ No cost to switch
○ Strong force
● Bargaining power of suppliers
○ Most services are produced in house
○ Mild force
● Bargaining power of buyers
○ Number of buyers looking for advertising is high
○ Low force
Five Forces Model

● Threat of new entrants

○ High cost of brand recognition
○ Established brand loyalty and name
recognition
○ Weak force
● Threat of substitutes
○ High availability of substitutes
○ Most recognizable
○ Moderate force
Competition of Google
● Bing
○ Strength: Owned by Microsoft,
strong brand recognition
○ Weakness: Less brand loyalty
that Google
● Baidu (China)
○ Strength: Leader in internet
search in China
○ Weakness: Brand recognition is
mainly limited to Asia
● Yahoo
○ Strength: Strong brand
recognition
○ Weakness: Allegations of data
leaks have hurt their reputation
Strategic Group Map: Search Engine Industry
High Global Market Search

Google

Low High
Cost Cost

Bing

Yahoo

Yandex

Baidu

Low
Internal Analysis: Value Chain Analysis

Support Activities
● Firm Infrastructure
○ Technology-focused infrastructure like fiber networks, storage devices, servers, switches, data
centers, offices, and research & development sites located in multiple US states and Internationally
● HRM
○ Google designs their HR practices to best ensure that their employees are happy and will continue
working for the company.
● Technology Development
○ Cloud computing technology allows them to store extensive amounts of information and data and
offer services to their clients. Google also focuses on internet security and innovations to make
their services faster
● Procurement
○ In order to ensure supplier diversity, Google has a Small Business Supplier Diversity Program.
Cont…

Primary Activities
● Inbound Logistics
○ Their core business is search and through their unique business model, they have no
inbound logistic costs
● Operations
○ 70 offices in more than 40 countries
○ Major operational value from technology capabilities and advanced search engine
● Outbound Logistics
○ Google avoids using physical outbound logistics leading to avoidance of bills from physical
shops
● Marketing and Sales
○ Google is more focused on PR events than physical advertising
● Service
○ Exceptional customer service is not a big source of value creation for Google
Internal Analysis: VRIO

Core Valuable Rare Inimitable Organized Advantage

Competency

Customer Yes Yes Yes Yes Sustainable

Experience

Market Yes Yes Yes Yes Sustainable

Position

Research and Yes Yes No Yes Temporary

Development

HRM Yes Yes No Yes Temporary

Formulation
Business Strategy
● Google’s Business level strategy is differentiation and it is very effective
○ Holds nearly 80% of the global search engine market share
■ Allows firm to raise prices and charge consumers more
○ Business model focuses on user experience
■ Offers a unique service that allows for enhanced and personalized searches
● Market segment
○ Young tech-savvy individuals looking for unique and innovative products or services
■ Google’s unique algorithm is very attractive
● Value chain activities
○ Google generates the greatest value with its inbound logistics
■ In the search engine industry
● There are no inbound logistics costs for its core search business
○ Operations value comes from its unique search algorithm
■ Google has 70 offices and is present in more than 40 countries
○ There are no outbound logistics
■ Business comes from online search and integration of advertisements into search results
○ Marketing and sales
■ Uses advertising and public relations widely
○ Not much value is created from service
Corporate Strategy

● Diversification strategy focuses largely on the acquisition of related firms

○ Enters more markets within their industry by acquiring other firms
■ Helps enhance products/services
● Entered the market for smartphones in 2005
○ Developed an operating system so multiple manufactures could use the platform for their products
■ Google chrome browser, email and map diversifies services
○ Can be used with different products made by different manufacturers
● The Youtube platform that accounted for 6% of their revenue in 2006
○ Another successful acquisition
● Google acquired 47% internet software and services and 35% software
○ Acquisitions were related
● Strategies are considered horizontal diversification rather than vertical
○ Google has no part in operations and manufacturing of the companies they acquired, but the companies are in the
same industry as Google and expanded their markets
● Geographic diversification strategy allowed them to break into international markets, further
diversifying them
 Cont…
● Google’s Strategy from its launch in 1988
○ “To organize the world’s information and make it universally accessible and useful”
■ Successfully operates in 50 countries with more than 70 offices
● Google is the top search engine for many countries
○ Leads to its vast global economic impact
● In order to strengthen customer loyalty Google utilizes technological influence
○ Supports and invests in “Google for India Digitalization Fund”
■ In this market threats are slim
● Google utilizes offshore operations in order to reduce expenses
○ Establishes operations in strategic areas around the world to minimize tax expenditures
■ IRS approved their operations to confirm to customers that the switch was ethical
○ Moved R&D, computer engineering, and many other industries overseas
● Intellectual development is done in various countries all around the world in the search engine industry
○ Allows for diversification and new perspectives
■ Help further globalization
● Google has a 92.47% global market share
○ Google utilizes a global approach in terms of their overseas industries, specifically, economies of scale
■ Purchases intellectual property from overseas
● Google reduces costs of server development by purchasing raw materials in bulk from various countries
● Utilized factors of economies of scale to maximize profits as well as create a more efficient development technique
Implementation
Organizational Structure

● Matrix Structure
● Over 100,000 employees
● Decentralized decision-making
● Somewhat flat structure
● Wide span of control
● Allows employees to be more interactive
with each other
● Requires good communication skills and a
lot of trust in all employees
Organizational Culture

● Employees are allowed to spend 30% of their workdays working on new

ideas of their own
○ Allows for innovation and strong research and development within the workplace
● Google encourages employees to share ideas and communicate with each
other
○ Allows employees to build strong relationships and makes their work environment feel more
comfortable
● Google hires employees who strive for excellence and go above-and-beyond
their expectations
Google’s Stakeholder Groups

1. Users
a. The users interest has a linear relationship with Google’s value
b. Because of the large impact users have, the company's business philosophy is that the
“users are the top priority in its CSR efforts”
2. Employees
a. Affected by Google’s work environment that they provide
b. Google puts competitive compensations in place along with fun workplace designs to keep
employees happy
3. Customers & Advertisers
a. Advertisements are their main source of revenue
b. They use targeted ads and search engine ads to make their money. This connects back to
user interest as each user’s opinion affects what type of ads they receive. It’s important for
Google to keep their users loyal to their search engine.
Control Mechanisms

1. Board of Directors
a. Creates ways to measure management success
i. Bonus Program
1. Determined in part by performance supporting the environmental, social, and
governance (ESG) goals that are a part of the firm’s work
ii. Shared Accountability
2. Audit Committee
a. Gives increased oversight on matters related to strategy and financial reporting, competition, civil
and human rights, and sustainability
3. Code of Ethics
a. The firm's philosophy is that it's possible to make money without doing evil
i. benefits the stakeholder groups of employees, communities and satisfy regulatory
requirements.
b. Supports Google’s corporate responsibility goals
 Strengths: Opportunities:
SWOT Analysis: 1. Network effects
2. Customer-orientation
1. Maximizing access to information
2. Deliver the most reliable and relevant

Google 3. Most popular website in the world by web

traffic data
4. Monopolized search engine industry
5. Less data leaks than competitors
6. Huge amount of data collected
information available
3. Selling ads
4. Remote or hybrid work opportunities
5. Expansion into different industries

Weaknesses: S/W: W/O:

1. Critiques for collecting customer data for
targeted ads
2. Lack of transparency for their ranking
algorithm
3. High employee turnover
4. High dependence on online technologies
1. Offer customers access to information on 1. Expand beyond the technology industry to
how their ranking algorithm works and placing decrease reliance on online technologies
a link to the information on Google’s webpage 2. Remote/hybrid work to decrease employee
turnover

Threats: S/T: O/T:

1. Possible emergence of competitors 1. Utilize network effects and large amounts 1. Offer ads at a lower rate than competitors
2. Falling ad rates of data to continue to provide the most
3. Apple switching their default search engine relevant and personalized information in
to Bing comparison to competitors
4. Facebook and Amazon’s new features can
decrease Google’s market share and
customer base
5. Antitrust legal issues
Thank You!
Questions?
Sources
Alphabet Inc. - Def 14A. (n.d.). Retrieved April 24, 2022, from https://www.sec.gov/Archives/edgar/data/0001652044/000130817921000256/lgoog2021_def14a.htm

Cuofano, G. (2018, November 14). The Evolution of Google Business Model. LinkedIn. Retrieved April 22, 2022, from https://www.linkedin.com/pulse/evolution-google-business-model-gennaro-cuofano/

Detailed Pestel Analysis of Google: Edrawmax online. Edrawsoft. (n.d.). Retrieved February 15, 2022, from https://www.edrawmax.com/article/google-pestel-analysis.html

External and internal environment of google. ALL ABOUT GOOGLE. (2014, September 4). Retrieved February 12, 2022, from https://lacgoe.wordpress.com/external-and-internal-environment-of-google/

Ewell, R. (2020, October 9). Google I/O 2016: 12 Leadership Qualities of Google's Sundar Pichai. Digital Scribbler, Inc. Retrieved April 20, 2022, from
https://digitalscribbler.com/blog/sundarpichai-google-io-2016-12/

Hosch, W. L. and Hall, . Mark (2020, May 11). Google. Encyclopedia Britannica. https://www.britannica.com/topic/Google-Inc

Husseini, S., & Bataclan, A. L. (n.d.). Five legal trends affecting business and human rights: Blog. BSR. Retrieved February 15, 2022, from
https://www.bsr.org/en/our-insights/blog-view/five-legal-trends-affecting-business-and-human-rights

Folks, M. H. (2022, January 1). Google SWOT analysis 2022. SEOAves. Retrieved February 11, 2022, from https://seoaves.com/google-swot-analysis/

Pratap, A. (2021, November 28). Five forces analysis of Google: notesmatic. Retrieved February 15, 2022, from https://notesmatic.com/five-forces-analysis-of-google/

Rothaermel, F. T. (2021). 4.3 The Resource-Based View: The VRIO Framework. In Strategic management (pp. 128–131). essay, McGraw-Hill Education.

Wikimedia Foundation. (2022, April 20). Sundar Pichai. Wikipedia. Retrieved April 20, 2022, from https://en.wikipedia.org/wiki/Sundar_Pichai