PEST and Porter's Five Forces Analysis of Google

This case study analyzes the PEST and Porter's Five Forces Analysis of Google, including its political, economic, social, and technological factors, as well as its competitors, suppliers, and potential entrants.

GOOGLE CASE STUDY

Slide 1:
The PEST ANALYSIS comes under:
a. Political
Globalisation: It works on the view that the company is able to monitor the activities and try to
combat with the different companies. Google is trying to focus on improving the search
technology to protect the compeititve advantage with key revenue (China Daily, 2010). The
standards are set to meet the strategic acquisitions with development of new and better internet
applications. they are variable that allows the users to view the images of various locations. A
proper revenue with corporations focusing on the advertisement on the site, placement in search
results have made it easy for the company to be globalised.
b. Economical
Increasing of global users: the company focus on the high targeted and measurable
advertisements to make it more successful than the other competitors. The major need is to stay
upto date and be connected with the core services that are parched with the surroundings due to
economic recession. Google focus on diversified new business with existing products that offers
the potential to strengthen and build a better competitive advantage (Gamble et al., 2011).
Google face the risks related to the search industry, but it has been able to work on utilising and
incorporating better existing services, thereby, attracting more customers.
Slide 2:
c. Social

Growing Interest: With the individuals becoming competent, the demands are changing rapidly.
Hence, for this, there is a need to measure the changes with handling the additional services like
the emails. Google is also working on response by building their mobile devices and then
releasing them. The major advantage is set with increased number of the queries for search and
better compeititve standing. Google plan is to become a provider which also handles the suit and
privacy concerns. The increased use of virtual server hosting, servers and the data storages help
in protection methods and working over handling the data disruption or loss in event of natural
disasters.
d. Technological
The innovative technologies are based on the designing where the Google search based ads are
priced through the auction system that allows the advertisers to bid on the keywords that would
describe the product or the services. The technology is also about handling the development
activities with strategy to dominate the Internet advertising entailed to become best search
engine. China has been focusing on attracting the market for Google which also complied with
the government censorship requirements when cyberattacks originating in China tend to steal the
proprietary computer code from Google (Google, 2009). The applications of Android are based
on computing the support costs and easy collaboration among the employees in different
locations.
Slide 3:
It has been seen that Porter 5 Force Analysis include:
a. The buyers where the bargaining power is higher. It is mainly when the search tool is
becoming demanding and sophisticated as well. Google has been working on satisfying

the client groups with preferring the advertisements broadcasting in a big banner on the
web page. Bargaining power of consumers is high since Google depends so much on ad
revenue. If consumers get annoyed by Google’s over-advertising, they will seek services
to block these leading to a lower profit to Google. Google must keep this in mind and
make sure to keep their consumers happy (Google, 2010).
b. The substitutes where bargaining power is also high where the buyer’s switching cost is
found to be low and the replacement is set like the advertisement on television, radio,
magazine etc. Threat of substitutes is low since there is not much that can replace what
Google does.
c. The suppliers: the bargaining power is considered to be low as Google has not been
dominant and it depends on competitors like Microsoft or Apple Software.
d. Potential Entrants is also low mainly because companies like Yahoo and Microsoft have
tried to work on improving the search engines so that they can pas their search tool the
different products.
e. Competitors where the bargaining power is high and has no patent on the search engine
so that the environment exploits or manipulates completely. The switching cost is found
to be very low where Microsoft and Apply have also embedded with the better search
tool into the Explorer browser. The rival search tools have a complete unique strength
with an attractive appearance (Hambrick et al., 2001).
Slide 4:
Google has tried mainly to focus on the innovative culture with cross-functional organisational
structure that tends to deliver a higher degree of flatness and control on the employees. The
Google model has also allowed to focus on the user with the clear and simple interface that focus

on the solving of research problems and handling the issues with new products like Gmail,
Google Desktop or Google Maps. With the larger number of advertisers, there are services
offered to help in running the large and the dynamic advertising campaigns. They help in
handling the employees with technology. The market of smartphones has believed to handle the
information technology including the lower software acquisition costs, lower computing support
cost and easy collaboration among the employees. The standards are set to match with the built-
up of the multiprocessor design, word processing and helping the people to involve in the web
based software applications. With this, it has been able to increase the android market share from
20% to 40% in 2011 (Wenzel et al., 2016). With strategic alliance, Google can easily engage in
mutual formal relationships and join the forces to collaborate the valuable strategic outcomes. It
also allows the joint contribution of the resources, capabilities, shared risks and the shared
control.
References
China Daily (2010) Google China has not halted censoring search results. Available:
http://www.asiaone.com/Digital/News/Story/A1Story20100316-204950.html. Last
accessed 9 Sep 2010.
Gamble, J.E. & Thompson, A.A. (2011) Essentials of Strategic Management: The Quest for
Competitive Advantage. New York: McGraw-Hill/Irwin.
Google (2009) Privacy Policy - Google Privacy Centre. Available:
http://www.google.com/privacypolicy.html. Last accessed 6 Sep 2010.
Google (2010) 2010 Financial Tables - Google Investor Relations. Available:
http://investor.google.com/financial/tables.html. Last accessed 9 Sep 2010.

Hambrick, D.C. & Fredrickson, J. W. (2001) Are you sure you have a strategy? Academy of
Management Executive. 15(4), 48-59.
Wenzel, H. and Voigt, S., (2016). Correlation between Corporate Culture and Corporate
Strategy: Google vs. Apple and Daimler vs. Siemens. GRIN Verlag.