Analysis of Google's Business Environment: Macroeconomic Factors

This report provides a comprehensive analysis of Google's business environment, focusing on macro factors and their impact. It begins with an introduction emphasizing the importance of considering micro and macro elements in the corporate world, using Google as a case study. The report then delves into a detailed examination of the political, economic, social, technological, legal, and environmental factors affecting Google. Each factor is analyzed for its positive and negative impacts on the company. The report further conducts an internal and external environmental analysis using the SWOT framework, identifying Google's strengths, weaknesses, opportunities, and threats. Finally, it explores the interrelation between Google's strengths and weaknesses and the external environmental factors, highlighting how these factors influence the company's position and operations. The report concludes by summarizing the key findings and emphasizing the significance of environmental analysis for organizational success.

Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P4 Positive and negative impact of macro environment on organization...................................1
P5 Conducting internal and external environment of an organisation........................................5
P6 Interrelation of strengths and weaknesses with the external environment factors.................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Environment is seen as most indispensable aspect because corporate world needs to
consider micro and macro elements while running business entity. However, rules and regulation
of governing bodies requisite to follow by managerial team of a company while dealing across
the borders. Google is one of the most leading company which are having their branches in
several regions as well as preferred by modern world in every situations (Cantwell, Dunning and
Lundan, 2010). Therefore, this assignment is going to highlight the study of macro factors in
order to identify its strength and weakness. Furthermore, project is also throwing some lights on
interrelationship between external and internal components for understanding changes which is
incurred at marketplace.
TASK 1
P4 Positive and negative impact of macro environment on organization
Google is a leading organization because its demand across the international marketplace
as well as make them unique due to its running strategy. Plenty of things is getting changed such
as; consumer choice or preferences, marketing strategy, political norms, policies, sudden change
in environment, disasters and so on (Chavis, Klapper and Love, 2011). Sometime these changes
are acting positively on organization but at few extent these modification is affecting Google in
negative manner. For instance; any updates in existing features of searching process is not liked
by few people whomsoever are facing difficulty while handling google. Basically, external
elements is playing crucial role in several situations as it guide an enterprise towards corrective
path while accomplishing distinctive operations. In fact, numerous of activities are identified
which are directly linked to the macro environment. Thus, assessment of positive and negative
impact of macro elements on selected firm is discussed as follows:-
Political:- Governing bodies are liable for designing policies and norms which is
applicable on entire corporate world for running an association in a smooth manner. Their main
objective is to introduce advanced rules by considering necessary elements for controlling
wrongful activities. In environment there are many political factor like law, rules and regulation
of government, policies, tax structure etc. all those affect the industry. Political stability is
necessary for company in order to ensure smooth functioning and avoid any illegal practice
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against the company. This help them in building strong image in the market. Some of the major
positive and negative impact of political bodies are described as follows:-
 Positive:- If government is introducing strict rules and regulation then company can
easily accomplish their business activities without facing any major problems. Along
with this minimize the exploitative things by imposing useful laws and acts (Commander,
and Svejnar, 2011).
 Negative:- Create problem while involving in a long term contracts because as per rules
and regulations various formal things needs to fulfilled before entering into a long term
agreements. It means, procedure is becoming to long and confusing.
Economical Analysis :- There are different economic factors like exchange rate,
interest rate, inflation rate, etc. affect the growth and profit of a company. Stable economic
structure in environment are increase the purchasing power of persons so that Google's earn
high profit.
 Positive impact :- Economic stability of market and growth of developing countries are a
opportunity of a Google company because no changes in interest rate and fluctuation rate.
Economic crisis are not affect the industry because they not selling services directly to
customer (Czinkota, Ronkainen and Moffett, 2011). Google's services and product are
utilise by the large organisation and business men.
 Negative Impact :- At the time of recession, Google will render low economic activities
and due to this, there will be less work for employees to perform and thus will pose
negative impact on the company.
Social Analysis :- There are different social factors like age, culture, attitude, belief,
population health etc. affected company profit. Google industry are analysis of these factors for
determine the needs of customer and offering product according to they wants.
 Positive Impact :- In market, increase in the utilisation of google sites on mobile phones
and laptops by people pose positive impact on Google. In the minds of customers google
create a brand because it offers different kinds of services like face book, you Tube and
google plus.
 Negative Impact :- There are the changes in culture, attitude and trends of society,
negatively affected Google's profit (Eckardt, 2012). The people highly use the social
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media like face book it provided the online advertising services. In many times the
Google are not offering inappropriate sites.
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Technological- Techniques are the basis on which companies are expanding rapidly. Due
to technology advancement,internet services are present in large scale.
 Positive Impact- GOOGLE has added voice recognition feature in their search engine
which increase their popularity in the customer. Google competitors like Microsoft,
amazon are now involved heavily in the innovation which put pressure on alphabet”s to
perform (Eisenberg and Miller, 2012). Technology progress make decrease in the
operating cost, improvement in the quality and innovative product .
 Negative impact- Amazon and Microsoft are developing their search engine. There is a
huge possibility that these competitors take place of google in search engine with
advancement of their technology.
Legal – There are many rules and regulation under technological sector every business
has to follow. Google is entering in financial sector for which they have to follow set of rules.
 Positive impact- Google doing many things to stop plagiarism. Company follow all the
rules when they are taking substance by providing the copyright information. (like David
2007,Morrow 2008).
 Negative impact- Successful players can stop google to enter in their industries through
litigation (like insurance).This kind of legal process may result in higher cost and restrict
alphabet's expansion.
Environmental- Technology comes with hazards ,google need to protect its people and
society from this dangers. Business has the capacity to save people from all this kind of
ecological hazards (Fernando, 2011). Company is involving in making the products for the
survival of the other organization.
 Positive impact-Its has the ability to tend banned fishing over billions of square miles in
the ocean along with earth engine capacity to find loss forest. Institution hugely depend
on the large amount of electricity,which increase global warming (Gecevska and et. al.,
2010). It is controlled by the use of costlier green energy to produce electricity.
 Negative impact- Organization make all the effort to save environment,which result in
the increase of operating cost and overall expenditure. Due to that business not able to
provide free services in future.
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P5 Conducting internal and external environment of an organisation
Google Inc. can be referred to as one of the paramount tech based organisation which has
been known to be provide web based search engine, advertising and hardware services (Halbert
and Ingulli, 2011). This segment of report focuses on conducting an internal and external
environmental analysis which is carried out through undertaking of SWOT analytical tool. The
major sections of this tools are mentioned below briefly.
Strength
These are referred to be features which are helpful in providing a distinct business
position in the market. The strength of this business is the dominance which has been possessed
in the field of search engine. This organisation is continuously improving its search engine and
have emerged to be untouchable for competition (Hamilton and Harrison, 2011). The mobile
operating system 'Android' have been a major success in the mobile industry and carries a market
share of more than 83% which is phenomenal. Google Inc. can be considered as one of the most
valuable tech companies in this era which can be reflected through its revenue of $66 billion and
11% increase in the profits compared to last year.
Weaknesses
The primary weaknesses of this corporation is that there is a lack of diversification in
their portfolio as 90% of the revenue is being availed through advertisement. The pay per click
approach which has been followed by this institution undertakes numerous factors such as
economic circumstances, consumer preferences and buying behaviour which makes this business
highly volatile (Iskanius, Page and Anbuudayasankar, 2010). The social networks which has
been launched by the enterprise such as google plus and hangouts have been overshadowed my
other players such as snapchat and Facebook.
Opportunities
These are referred to chances which can be availed by a business for expansion. The
opportunity lies with the restructuring of parent organisation i.e. Alphabet. This approach will be
helpful in making sure that core operations of this brand are provided with much needed
attention and resources for their development. This institution can easily venture in smartphone
segment and can expand simultaneously as it has been predicted that there will be an increase in
the demand for the coming years (Welford, 2013).
Threats
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These can be referred to factors which can cause potential harm to the company. The
primary factor which can harm business is app (mobile application) oriented search which have
caused a major threat to Google's web oriented search engine. This feature will have an indirect
impact on the basis as there will be a simultaneous reduction on the revenue which has been
availed through advertisement. There is a situation of intense competition in the market
irrespective of the segment (Jayeoba, 2012). Therefore it is essential for this business to
incorporate measures of continuous improvement so that sustainability could be achieved.
P6 Interrelation of strengths and weaknesses with the external environment factors
It can be said that there is a direct relationship between strengths and weaknesses along
with external environment factors. The strengths and weaknesses of an organisation could be
influenced with the change in the external environment. The major interrelation is specified
below;
Strengths: The strength of a business are its better performing areas which assures that a
business operates at improved level. This amount of revenue availed along with success of
android operating system are its major strength which helped in attaining improved position in
the market.
Economic factors: The rise in number of businesses have emerged to be beneficial for
this organisation as it will be able to avail additional revenue through advertisement.
Social factors: The trend is favourable for this organisation as people prefer Android as
their operating system when compared with others. The popularity of video platforms have given
rise to YouTube and google plus services which have enhanced popularity as well as revenue
which is being availed by this business.
Technological factors: This business era mostly relies on technological innovation and
google leads the pack (Klapper, Lewin and Delgado, 2011). The management of this
organisation encourages innovation which is being helpful in achieving premier position in the
worldwide market.
Weaknesses: These are referred to be areas which are to be paid attention in order to
improve operations and market position of the company. The external factor influencing
weaknesses are:
Political factors: In context of United Kingdom, the political factor have created a deep
impact on the operations of technology based organisations (Siewiorek and et. al., 2012). The EU
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has charged Google with a penalty of 3 billion euros for unfair promotion of its own shopping
services. Such instances weakens situation of this institution in the UK market.
Legal factors: The legal factors have caused a temporary weakness as well as plans of
business to venture into finance services is being halted by the additional set of laws and
regulations formed by the government (Rankin, Windsor and Wahyuni, 2011).
Social factors: the social factors have enhanced weakness of an this tech based institution
as well. The rise in the social media platforms such as Facebook and Instagram have increased
competition to a major extent along with reducing the revenue in terms of advertisement.
CONCLUSION
From the above report it has been concluded that study of external and internal elements
is highly indispensable for company success because organizational policies are designed on the
basis of surroundings. As expressed above macro factors are having positive as well as negative
impact on organizational performance as environment always fluctuates due to changes in other
elements. For example; if there is modification legal acts or norms then company needs to reform
their current trade policies in order to adjust with certain alteration. Lastly, one thing is also
determined that macro and macro factors are having major connection with each other which
shows their interrelationship is highly significant for Google performance.
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REFERENCES
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Fernando, A. C., 2011. Business environment. Pearson Education India.
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Jayeoba, F. I., 2012. NEED-GOAL INTEGRATION AND ORGANISATIONAL TYPES;
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