Google's Strategic Management Analysis

This report analyses the strategic management approach of Google, including the development of its strategy since its IPO, the strengths and weaknesses of its approach, and recommendations for transforming strategy development. It also includes a PESTEL analysis of Google's current turbulent global environment and a Porter's five forces analysis.

STRATEGIC
MANAGEMENT

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................3
TASK – 1.........................................................................................................................................3
Development of Google’s strategy over the years since its Initial Public Offering (IPO)..........3
Google’s strategy has been deliberate, incremental or emergent? ..............................................4
Strengths and weaknesses of Google’s approach and recommendations for transforming
strategy development ..................................................................................................................4
TASK – 2.........................................................................................................................................6
A. PESTEL analysis of Google's current turbulent global environment.....................................6
B. Porter's five forces analysis.....................................................................................................8
TASK – 3.........................................................................................................................................9
A. Porter's generic strategies' framework. ..................................................................................9
B. Ansoff matrix adopted by google .........................................................................................11
CONCLUSION ............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Speaking in relation with the strategic management, it is being referred as the process of
identifying as well as describing the strategies that the managers need to carry out for attaining
competitive advantage and for performing better. It also supports the firms in enhancing their
abilities through working on the weak areas and make alteration in the existing plans as well as
activities for gaining an edge over other. Considering this, the main aim of the current research
report is to analyse the current strategic plans and practices being adopted by Google and
determining the strengths and weaknesses of this approach. Further, the report will also throw
some light on responses of the company on major issues, attractiveness of the industry and
corporate and competitive strategies of the company through application of different models,
theories and concepts.
TASK – 1
Development of Google’s strategy over the years since its Initial Public Offering (IPO)
According to Adoli and Kilika (2020), strategy is being defined as the program or action
of objectives of the firm and the utilization, acquisition and disposition of the resources. It is also
defined as the identification of the long-term objectives of the firm and the adoption of the
courses of action and allocation of resources required for attaining these goals. On the other
hand, according to Bryson and George (2022), strategic management can be interpreted as a
series of managerial decision as well as actions of the firm that can be utilized for facilitating a
competitive advantage along with enduring superior performance over the other firms. In the
year 1996, Google began its operations as a research project by Larry Page and Sergey Brin.
They both imagined that a search engine that evaluated the association amid the websites would
harvest better ranking of outcomes as compared to the existing techniques. Soon, it gained
different followers and users and even attracted varied financial backing which has allowed them
to launch their initial public offering (IPO) in the stock market of United States of America.
From the very starting the company was very different as it was not a conventional company and
also does not desire to become as well (Johnson and Regner, 2017). The business model being

adopted by Google was also two tier that means there was a single layer separation between the
management and the supervisors, which was also quite rare in USA. However, this model proved
very beneficial for the board of directors due to the fact that it offered a sufficient amount of
managerial freedom between them and their shareholders for running the organization.
In addition to this, the company also followed the unstructured style of operations,
nonetheless it was pretty organised from the bottom level. Most of the people working at the
supervisory level are clear about their job duties and plans and are focusing on what is new,
innovative and exciting rather than following a five-year plan. Furthermore, right from its
inception, the company is operated on the basis of their culture. They have not followed the
traditional hierarchical model rather offered freedom to the employees to perform their work on
their own (Lynch, 2018). Nevertheless, there was some rigidity being created into the system.
Different strategies were being adopted by the company with the passage of time such as
diversification, acquisitions and expanding their line of products and services for staying
competitive in the market along with responding to the challenges coming across in their path of
growth and success. In the year 2015, google restructured and renamed as “Alphabet”. This was
majorly being done by the company for allying the market fears through streamlining the
operations and offering visibility to the investors in regards with the working of the new venture
and acquisitions in Alphabet.
Google’s strategy has been deliberate, incremental or emergent?
Google does not conform to conventional practice and thus, the response to this whether
the company’s strategy was deliberate, incremental or emergent has multifaceted response.
Focusing on the deliberate strategy, it is a top-down approach to strategic planning that focusses
on attaining the determined goals of the business. On the other hand, emergent strategy is
nothing but the procedure of determining the unanticipated results from the implementation of
strategy and afterwards learning to integrate those unexpected results into the future plans
through considering the bottom-up approach (De Wit and Meyer, 2019). Further, incremental
strategy approach follows the bottom up approach wherein the decisions are handled individually
below the level of organization as decentralisation is political convenient. Articulating in relation
with the strategies being adopted by the company since its initial public offering (IPO) in the
year 2004, it can be said that the strategies of the company has been a combination of deliberate
as well as emergent on the basis of the dominant needs of the business. According to Stobierski

(2020), in each and every organization, strategy should be approaches from variety of view
points with a view to have alignment of definite goals after the realization of the strategies. A
deliberate strategy is one that is being ascended from conscious as well as organized action on
the part of leadership and business. It is taken from rigorous evaluation of information. The
management of the company passes all the critical data and details to the workers for execution.
Additionally, collection actions are also communicated to them for attaining the desired
outcomes. The emergent strategy then takes over from the unplanned actions along with
initiatives. The tactical decisions are being taken by the bottom level employees such as
engineers, technicians and other staff that works on the individual projects.
Strengths and weaknesses of Google’s approach and recommendations for transforming strategy
development
Management of such a large organisation is quite challenging and deliberate and
emergent approach of the company has its own strengths and weaknesses. The approach being
identified above is being supported by one of the strengths of the company that is business level
planning. There is a deliberate presence of operational and tactical plans in all the business level
based on the predictable results. The company also has amalgamated methods for managing
innovation and change (Mazzei and Noble, 2017). However, there is some weaknesses in the
financial perspective of the company that it is majorly dependent on the ad-based revenue which
is threatened increasingly by other firms such as Facebook. Lower amount of revenue signifies
that google cannot fund their key projects. Thus, it is suggested to the company that they must
first validate their decision regarding development of any strategy and then align with their
future vision and shareholders who can be impacted by their decision and then finally, engaging
or developing a strategy. The strategies need to be broken down into four main perspectives that
is customers, internal processes, finance and innovation. Further, this new approach towards
development of strategy will support the company in achieving more growth and success
(Johnson, 2016).

TASK – 2
A. PESTEL analysis of Google's current turbulent global environment
Google is involved in e-commerce which involves products sales such as financial
services and insurance as well. There are many companies of alphabet which is involved in
R&D. The high profile projects are involved in it such as robotics and self driving cars. Apart
from these strengths, there are many factors which can impact the google business.
Political factors- Google is one of the leading company in the world and always been
suspected of political agenda (PESTLE Analysis of Google, 2022). Due to political factors, the
brand image has been negative impacted. It has been accused by Chinese state media for playing
an active role, exporting, ideas, culture and value. Not only this, the company has also been
criticized for interfering with politics and influencing environment relating to politics in the UK.
In addition to this, the company has also been accused that it has too much control over the
information flow. When the public search about anything relating to politics it could influence
the outcome of elections which can lead to calls for stricter government oversight of google.
Economic factors - when the google was renamed alphabet, there were factors that could
affect the business performance. Alphabet has accumulated a huge amount of cash, which makes
it vulnerable to inflation. As we all know that due to sudden drop in the currency value, there
was a drop in value of the firm. The large amount of money which the firm keeps overseas
makes it vulnerable to the currency market where rates are exchanges. It has been noted that
alphabet could lose money if the dollar is weak. Because of economic pressure on the company
will force them to exchange a currency for a weak dollar. If there is a sudden drop in the stock
price of alphabet then it might be possible that it could hurt the firm image by impacting its
market capitalization. In order to mitigate this and in response of this company can issue
secondary offerings- which means that shareholders indirectly or the firm itself sells new stock
for cash.
Social factors - as we all know that social trends are the factors which can impact the
company's performance. People nowadays are avoiding using desktop computers just because of
changing trends (PESTLE Analysis of Google, 2022). Most of the google searches are done from
mobile devices. With the growing use of social media platforms such as Instagram and Facebook
for searching about anything and for other activities has created threat for the company which
includes streaming video and exchanging information. The use of television is reducing which

forcing content providers such as movie studios to develop their own content in order to compete
with company like YouTube. The rise of Facebook, which also sold advertisement space, was
the biggest challenge for the company. In order to mitigate this, Google's response has been
google+ which was slowly dismantled as customers who did not appreciated much about the aim
of the firm to create a unique platform having different services.
Technological- Technology is one of the important factor which can impact the business.
As we all know that people are using mobile devices to access the internet rather than using
traditional devices such as computers. Nowadays everything is available on fingure tips via
various platforms (PESTLE Analysis of Google, 2022). Apply products are having their own
search engines that create heavy competition with google. The growing use of apps create
challenge for the company so, alphabet is designing alternatives to products of google. The rising
technology trends has created pressure on company to integrate more effective features onto its
platforms. With the formulation of alphabet the company focus on the search and also businesses
related to advertisements. In response, Google X focused on robotics and also on artificial
intelligence which includes driverless car in the firm.
environmental- parent company Alphabet needs to follow all the rules and address the
issues relating to environment. As we all know people are becoming more environmental
conscious. The business model of google is heavily dependent on data centers. The company
focused on reducing their carbon footprint and take major eco-friendly steps for the betterment of
environment. In addition to this, it is also dependent on the internet infrastructure that use large
amounts of electricity. In order to produce electricity the company has to pay for operating costs.
So, to mitigate this the firm is making efforts to control global warming by motivating the use of
costlier green energy sources.
Legal- As we have already stated before that the firm is dependent on running targeted
ads on its google platforms for its revenue generation. By following the legal laws relating to
data privacy the companies focuses on collection of private data. Google is having a hard time
running its targeted ads. To be successful, the company needs to focus on new laws which are
being made to protect copyrighted information on the platform of google. This might impact the
revenue standards as there can be decrease in traffic.
From the above analysis, it has been evaluated that as there is an environmental issues
going on in the world people are becoming more aware about it, this issues have impacted the

cost effectiveness of the company. With the implementation of value chain analysis, for finding
out opportunities and threats the company management team consider how each step adds or
subtracts value from products or services provided by google. With the help of value chain
analysis, the company is able to identify the business activities which can create competitive
advantages.

B. Porter's five forces analysis
The core of Alphabet's business is the google search engine, which is one of the most
famous search tool. Google is so successful because it is charging money for advertising that
appears with its searches. Porter five forces is the model which is used by company to find out
forces which shape a firm's competitive position within an industry (Juliana and Nyoman, 2019).
(strong) Competitive rivalry- This is one of the most important force among all which
needs to be address. With the help of this force the company can know about their competitors in
the particular industry. This is the force which force company to be prepared for the competition
because google is facing really tough competition. There are many competitors such as Bing,
Apple and yahoo, which can influence the performance of the business. Moreover, the search
engine of the firm sometimes generate poor searching experiences which creates a bad
impression on audience. So, people are using another web search and go directly go to websites
such as amazon to search about things online.
(weak- moderate) Bargaining power of buyers- the influence of the bargaining power of
the buyers of google is really weak (Chesula and Kiriinya, 2018).. Due to small size of individual
buyers and increasing demand is the main reason behind weak force. As we all know that buyers
of the company have different choices to switch for a low cost. In order to mitigate this, the firm
decides to increase its prices. Now the people can choose to switch to another competitors who
provide similar services which makes the power of buyers moderate.
(weak) Bargaining power of suppliers- As we all know that company has large number
of suppliers from which they can decide where to buy things. The high availability of supply and
various suppliers are the major factors that contribute to the weak power of suppliers. Now, it
becomes really easy for the firm to switch from one supplier to another because there are many
options available.
(moderate) Threat of new entrants- this force of porter explains about how easy it for the
new entry or new players to enter into the particular market relating to e-commerce (Juliana and
Nyoman, 2019). If the company is powerful then it has a huge impact on the new players as
existing company has more power with effective strategy than others. Nowadays, due to new
entrants the company have to be very active while implementing any strategy. The costs of
entering this marketplace is not too high so, anyone can enter into this industry and compete with
google by using new strategies. This creates threat for the company as they focus on using

effective strategy to provide more services. However, it has been noted that the marketing
strategy which is used by company to create brand awareness makes it a little harder for the new
entrants to beat the competition at same level.
(moderate) Threat of substitute services or products-. This force of porter shows about
how easy it for the substitute items to influence customers buying behaviour (Chesula and
Kiriinya, 2018). If company is not able to provide quality services to people then their potential
customers can move towards another brand. As we all know that there are other companies such
as yahoo, bing and many more who is providing similar services such as search engines which
creates threat of substitute for company. Due to this, company have to be very active as it can
impact the performance of business. For example- Apple's MacBook is one of the top listed
substitute for laptops of google.
From the above discussion it has been evaluated that customers, suppliers, new entrants,
competitors and substitute products are the important five forces which can influence the
profitability of the firm. Before implementing any strategy or launching any new products the
firm needs to analyse a competitive environment. As this can not only help them to cope up with
challenges but also helps them to estimate the industrial competition. From this, company can
showcase where the threats and strengths exist and how they can grasp opportunities to expand
the business. Not only this, alphabet can easily understand the corporate risk with the
implementation of five forces.
TASK – 3
A. Porter's generic strategies' framework.
Basically it is a tool used by company in order to know about their competitive
advantages across its market scope. By knowing about the position of the firm, productivity can
be analysed.
Cost leadership- by using this strategy company can easily set out to become the low cost
producer in the market (Porter's generic strategies, 2022). Depending on the structure of
business, firm uses cost advantages sources. This includes technology, access to raw material and
so on. It has been said that if the firm is offering low cost products to customers and sustain
overall cost leadership, then it will be an above average performer in the particular industry, vice
versa.

Differentiation- This is one of the most effective strategy a company can use especially
popular and big brand seeks to be unique from others in the particular market. By using this
strategy any business can uniquely positions itself so that they easily meet the requirements.
Google uses differentiation strategy as generic strategy which helps them to make its good
market position in the world. For example- the features and innovation in its services are unique
in nature this could possibly help the firm to focus on the business without being distracted by
other competitors. By using this method, the company is able to grasp the market scope. Google
provides products or services to everyone in the world. However, the generic strategy of
differentiation also includes improving unique capabilities of the company which could make the
business successful and competitive. With the help of its unique concept the google sets itself
apart from other players into the market (Firoz Suleman, Rashidirad and Firoz Suleman, 2019).
As we have already discussed before that google is a highly innovative firm which provides
unique services and keeping them up to date about changing technology. There are many types
of unique products which has been offered by the company, includes google glass, google
search, google fibre etc. this products comes under the category of differentiation.
For future success also, it is essential to focus on differentiation generic strategy as it can
help them to maintain its competitive advantage which is based on uniqueness. By using this
strategy, company can easily understand the importance of being unique and continue focus on
innovation. As we all know that the strategic objective set by the company is to improve their
products line and continue develop existing services in the world of technology. In this way the
firm will be able to keep its competitive advantage high by implementation of relevant strategy
and also deal with heavy competition from other tech companies.
Focus strategy- by using this generic strategy, the company is able to focus on particular
group of segment which has been selected by them in the particular industry. By this strategy, the
firm is able to serve them. There are two variants of focus strategy:
In the first variant it is cost focus where a company seeks a cost advantage in its target segment,
while on the other side, it is differentiation focus in which company seeks differentiation in its
target market. By using differentiation focus, google is able to exploits the special requirements
of buyers in particular market segments. In the current case study, it has been noted that there are
challenges faced by google that advertisers had not shifted their television ad budgets to
YouTube and internet at the pace anticipated. So, by using its differentiation strategy, the

company can easily focus on differentiation offering in the business (Greckhamer and Gur,
2021).
Resource Value Rare Imitable Organisation Impact
Strong global
presence
Yes Yes Yes Yes Sustainable
competitive
advantages
Work culture Yes Yes No Yes Temporary
competitive
advantages
Technology Yes Yes No Yes Temporary
competitive
advantages
On the basis of application of VRIO framework, it can been evaluated that company can
assess the sustainability, By using sustainable competitive advantages as a strategy google is able
to meet its customer needs better than its competition can. With the help of this framework the
company’s managers are able to analyse a resource and capabilities. Not only this, when the
company uses competitive strategy they need to identify external environment so that they can
make plan accordingly which helps them to meet their future goals. In addition to this, if the
feature of the products or service is being offered by the firm in a most unique way then it helps
to capture a niche market. From this the company can have sustainable competitive advantages
which is beneficial for them to generate customer loyalty. From the above analysis, it has been
evaluated that differentiation strategy would be helpful for the company to reach its goals.
B. Ansoff matrix adopted by google
Basically, it is the method used by the company so that they can easily prepare for
marketing planning process. It is a strategic planning tool that can provides a framework which
can help senior manager, marketers, top management team of the firm devise strategies for the
growth in the future. By understanding each quadrant, senior manager can make strategic
planning successful (Kurniawan, Iswahyudin and Suciati, 2020).

Market penetration- This is one of the most common strategy which is used by the
company. In this strategy, the google can focus on expanding its existing product sales in
existing market. In order to have this strategy successfully implemented the company needs to
develop a new marketing strategy so that it can easily motivate more people to choose company
and use it more on regular basis. Talking in relation with google, the company primarily relies on
market penetration as its intensive growth strategy. By using this strategy the company is able to
expand its uniqueness in the market. The main goal of the firm is to acquire more customers
from the current market. As we all know that the firm hold good market position in the world of
e-commerce. By using this strategy the firm is able to strive for a bigger share of the online
advertisement market at global level (Yaqoob and Omer, 2021). With the implementation of this
intensive strategy determines how the firm uses its 4ps of marketing mix in order to improve
their business performance and grow the operations. In addition to this, by using this strategy
along with generic strategy of differentiation the firm ensures competitive products that enable
competitiveness in the penetrating markets which helps them to enhance their market share in the
competitive world. Especially, into those market where online platforms are using technology
and innovation such as digitalization, advertisements.
Product development- talking about this strategy for growth is applied as an effective
approach through which company can enhance their performance (Kurniawan, Iswahyudin and
Suciati, 2020).. For instance, google is focusing on innovation so by using this strategic objective
the firm is able to develop its products into market so that they can increase their revenues too.
As we all know that innovation is all about using new ideas and techniques considering nature of
technological changes. The company focus on promoting innovation among employees which
helps in improving the organizational culture. By using this strategy the firm is able to launch its
product that is new mobile apps. In addition to this, the firm also provided products like laptops,
tablets and pixel smartphones into the market. For this, they focused on understanding external
factors such as PESTEL analysis. On the basis of this model, It helps the firm to understand
about whether product development will be able to achieve success or not. However, the firm
continues to improve new products such as mobile application, devices and cloud services for the
business growth. Through the intensive growth strategy of products development, firm is able to
create more channels for income generation which helps them to achieve their target goals. By
having this method, firm us able to achieve competitive advantages.

Market development- By using market development as growth strategy, google is able to
enhance their business. The objective of the company is to attract more customer in new market
segments via new uses of current products offered. For the current case study, this intensive
growth strategy is being applied by offering new uses of current online services. The reason
behind that is as people are spending more time on internet using online services as a new tool
for searching about anything. With the help of this method firm is able to offer products to more
areas at global level.
Diversification- this is one of the most riskiest strategy among all 4 options available. It
is basically used by the firm as a supporting intensive growth strategy. As we all know that the
company wants to expand its new business such as Alphabet in new markets where the firm has
absent operations. In today's world, if company wants to launch new products into new markets
then newly acquisitions need more changes in the corporate structure (Johnson and Regner,
2017).
Recommendation
Talking about growth strategy for the future for google, it is recommended to focus its
efforts and enhance technology especially in the area of product development. Expanding its
business would be helpful for the growth so it is suggested to improve its strategic alignment.
Make sure to improve profitability by using effective marketing strategy, advertisement of its
current product and use social media marketing as a tool before entering into new businesses.
The company must focus on understanding the competitors strategies before entering into new
business into this market which helps them to achieve profitability (Lynch, 2018).
CONCLUSION
Thus, from the above analysis, it can be concluded that the evolution of the Google to its
present organizational status has been driven by different strategies as well as approaches which
ranges right from employees to the level of organization. it has been further found from
application of different theories and models that assortment of strategies has been utilized for
making sure that the workplace of the company enables, creativity, innovation, authority of the
top-level management and independency in each and every project.

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<https://www.marketingtutor.net/pestle-analysis-of-google/>
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<http://www.quickmba.com/strategy/generic.shtml>