Innovation Strategies: Google - Analysis and Competitive Advantage

The report analyzes the innovation strategies of Google and its competitive advantage. It focuses on the recent and trending innovational strategies that the company has implemented in the past years, and stresses on the upcoming update of the Google Maps. The report concludes that the company uses a highly customer-centric strategy for both innovation and deployment purposes, that gives it an insight about the customer wants and needs. This helps the company gain an edge over its competitors.

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1INNOVATION STRATEGIES: GOOGLE
Executive Summary
The purpose of this report is to analyze the innovation strategies of Google.Inc and reason
why it is so much ahead of its competitors. The report focuses on the recent and trending
innovational strategies that the company has implemented in the past years, and stresses on
the upcoming update of the Google Maps. The report concludes that the company uses a
highly customer-centric strategy for both innovation and deployment purposes, that gives it
an insight about the customer wants and needs. This helps the company gain an edge over its
competitors.

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Table of Contents
1. Introduction............................................................................................................................3
2. Discussion..............................................................................................................................3
2.1 Innovation Strategies of Google.......................................................................................3
2.2 Competitive Advantage....................................................................................................5
2.3 Entry and Development Strategies...................................................................................7
2.4 Appraising The Innovation Project..................................................................................8
2.5 Deployment Strategies.....................................................................................................9
3. Conclusion............................................................................................................................10

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1. Introduction
Innovation has been the key in today’s world to ensure products that have a high
value of unique selling points to attract the market share (Ciabuschi, Dellestrand & Martín,
2015). This is the sole reason for the outburst of R&D centers in the recent years. It is no
mystery that without the upgrading of existing products and the innovation of new products, a
company would perish in the modern generation (Fernandes & Brandão, 2016). This report
focuses on IT giant Google.Inc’s strategies and approaches to innovation that make Google
applications the most preferred in the market. The organization was primarily founded by
Larry Page and Segey Brin, in 1998, with the main objective of revolutionizing the way in
which technology and digitalization of the world is perceived in the modern era. The
discussion in this report answers the questions related to the company’s innovation strategy,
the resulting competitive advantage, the development and entry strategies of the company, the
aesthetic and numeric values of the innovation project that the company has undertaken, the
collaborations that played a part in the success of the project, and finally the deployment
strategies used by the company to update its products.
2. Discussion
2.1 Innovation Strategies of Google
With the announcement of the launch of its new interactive and advanced level of digital
maps which are due to launch next year, Google caught the eyes of everyone and got them
wondering about how the company manages to stay ahead at all times in terms of bringing
innovation in the market. Perhaps, the answer could be found in the company’s
comprehensive innovation strategy. First of all, the company looks forward to dynamism in
their innovation progress. Focus is kept on developing new innovations while at the same
time, upgrading the old technologies of the company. Integration is a key factor that plays a

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part in it. The strategy involves constantly looking forward at developing integrated
technologies, reconfiguring the existing technologies, and developing them to attain a new
and unique technology that would be new in the market. On top that, the company aims at
shuffling the workforce from time to time. It believes that with the newest minds for the
newest projects, come the better possibilities of attaining a new product to launch in the
market. The philosophy behind backing this strategy is that it gets too late to take an action if
the action is not taken before the problem arises (Colbert, Lee & Georg, 2016). With this, it is
ensured that the company does not wait for the need for a new innovation in the market. It
rather aims at developing an innovation which the market would find attractive thinking that
it would solve their existing problems.
Now coming to the most important part, the company has a separate product team and
a research team. This research team is called “Google Brain”, and has been working closely
with the product team, in a way that creates a feedback loop between the two teams. This
enables the team to continuously develop its innovation according to the feedbacks (Duhigg,
2016). Furthermore, the company has “internal customers”, who regularly provide feedbacks
on the innovative development of any google product. This helps the research team to further
research on the development of the product, based on the customer feedbacks. The company
uses this internal customer group as a focus group to gain insights into the products that it
develops, and get an idea of how it could be perceived in the market, and what sort of an
innovation would prove to be attractive to the target market (Verma et al., 2016). Lastly, the
company has a strategy of developing and innovating from the very bottom. It does not
always attempt at developing or innovating products that will be completely unique in the
market. Instead, much of the focus is given on developing a basic and common product, and
then researching about ways to innovate the product over an elongated period of time, to
eventually produce a product that would have a lot of unique selling points, and would hence

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be automatically perceived as unique in the market. Google does this so that the product that
they are selling is commonly used, ensuring a fair market demand, which would
automatically gain a fair market share as well because of the innovative and unique nature of
the product. The development of Gmail is a perfect example of it, where the idea was to
simply produce a mailing application which would have a lot of unique selling points
(Baldwin, 2017). The developers started off by making a simple mailing app, and the later
innovations followed to make the app what it is today.
Google also believes in giving its employees a 20% time to develop a product, relying
on the philosophy that a faster thinking process yields the best innovative results.
2.2 Competitive Advantage
With the innovation strategy that the company has, it gives them a competitive
advantage over its competitors in a lot of ways. Firstly, the system of having a group of
“internal customers” helps the product team in knowing what the consumers of the market
want from a particular product (Plouffe et al., 2016). Using this group as a focus group, the
company then assesses the feedback received from them to deliver the requirements to the
research team, who then formulate ways in which the requirements can be met. The results
emerge as products purely designed for the customers’ needs and preferences. Hence the
customers prefer to choose the product over the products of Google’s competitive company,
since those products do not comply to customers’ preferences as much as Google products do
(Birkinshaw, 2017). This is one of the main reasons why Yahoo! lost the race to Google in
both being the most preferred search engine and the most preferred email platform. While
Yahoo! was developing its applications according to their assumptions of the target market’s
preferences, Google chose to form a feedback loop in between its research and product teams,
coupled with the feedbacks from its “internal customers”. In the end, Google managed to win

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the customers with its highly customer centric products. The idea here, is to create a level of
personalization that no other company can manage to create.
Secondly, while most of its competitors like Amazon rather prefer to have an
extensive research team with heavy research processes, Google prefers to play smart by
having a separate product team to research and ideate on the various products that could be
developed with the available resources. Eric Schmidt of Google admitted in a press interview
that Amazon is indeed the biggest competitor of Google as of now, opposing the popular
belief of it being Yahoo! or Bing. However, Amazon has failed to create the level of artificial
intelligence and personalization that Google has managed to create in its products, whether it
be the browser or the personal assistant. This personalization once again, is a result of its
customer-centric research processes in its products (Imazeki, Yasui & Maeno, 2016).
There is one more reason why Google won the race in establishing Gmail as the most
popular and preferred email application in the market. The first Gmail application was an
ordinary email application. However, Google’s innovation strategy of innovating from the
bottom up, pushed the developers harder to stretch the possibilities of the application’s
capabilities to make it what it is today. The first Gmail application was no different than what
Google had developed. But the strive to stretch the power of the application and personalize it
even more from there on, was what put Gmail as a better product than the Yahoo! mail. This
is the way in which the innovation strategies of the company as discussed in the earlier
section, give Google a competitive edge over its competitors (Lüttgens & Diener, 2016). The
company continues to operate with the same innovation strategies, which other companies do
not implement as vigorously as Google, which makes sure that it remains on top of its
competitors.

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Furthermore, the 20% time given to employees not only ensure that the company
yields a better innovative product, but it also ensures that the product is developed faster than
the rest of its competitors, and by the time a competitor of the company aims at researching
about a similar product, Google would have already launched it into the market.
2.3 Entry and Development Strategies
To analyze the company’s entry strategy, it should be noted that the company has tie-
ups with over seventy corporate companies. The deal that the company makes with the
corporates is to make their applications, mainly the Google Chrome browser as the default
applications in their devices.
Firstly, this incurs some cost to the company, but by setting up its applications as the
default browser, the company increases its market share every time a new device is purchased
from that corporate company. As discussed earlier, the company has the most innovative and
user friendly applications in the market. Hence, it must not be an unknown fact to Google that
their products are the most preferred in the market. By setting its applications as the default
ones, it only reassures that its products are used widely in the market. Thus, it ensures that the
company gains long term revenues from this strategy (Pedersen, Gwozdz & Hvass, 2018).
Before using the Porter’s five forces to analyze this strategy, it should be noted that Google
has no external supplier. It is an IT company that creates and innovates its own products, and
hence, faces no threats from bargaining powers of suppliers. Being the most preferred
company in the IT sector and by setting its applications as the defaults in customers’ devices,
the company excellently minimizes the bargaining power of customers. Threat of new
entrants is low as well since to operate and innovate at a level at which Google does, it would
require humungous amount of resources (Mathooko & Ogutu, 2015). Finally, the threat of
substitutes is also low, since Google has created a virtual monopoly for some of its products
through the innovation and tie-ups that go into its strategies. Google’s CEO Sundar Pichai,

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during the launch of Android one said, “With Android One, we not only want to help people
get online, we want to make sure that when they get there, they can tap into the wealth of
information and knowledge the web holds for everyone.” ("For the next five billion: Android
One", 2016). This perfectly reflects the entry strategy of Google which incorporated the
platform in over a million smartphones worldwide, promising a tremendous browsing
experience for its customers. With all the analysis taken into consideration, it can be safely
termed as an effective entry strategy.
A part of the market development strategy has been explained in the entry strategy of
the company itself, which is the strategy of expanding the potential market. What remains is
analysing Google’s development strategy, which is developing new uses to its existing
products. An example of this is when Google became the first company to incorporate the
speech to text function in its browser. By doing that, Google ensured that the company
incorporated the benefit of not having to type into the search box during emergencies, and
made the browser more usable than before (Bérard, 2016). Customers bought into it as well,
as the practice of speaking into the browser became a trend at that time. By doing this,
Google also ensured that its browser stayed ahead of its competitors and appeared to be ahead
of its time as well. This reassured the company that their browser stayed as the most preferred
web browser in the market, and hence this development strategy proved to be fruitful for the
company.
2.4 Appraising The Innovation Project
Going back to the announcement of the launch of the new and updated Google Maps
which caught the eye of innovators and customers equally across the world, it is important to
consider the value of the of the overall project which is high in terms of both aesthetic and
numeric values. Firstly, the application includes a new and appealing animated guide, that
guides a user towards his or her desired destination. As far as the view of the map is

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concerned, it can be assumed that Google has incorporated some features of Google Earth
into the application. This is because the view involves that of a full 3-D visualization of the
streets, tracking the real time movement of the user (Gebru et al., 2017). All in all, it appears
like a camera with an AR guide that guides the user to his destination. This is an innovation
that looked way ahead of its time from what was viewed in the announcement ceremony. No
other online map application has ever incorporated so many features. If all of these were not
enough, the map would also include a feature which would allow names of popular buildings
and places to pop up from them, in case a user finds it hard to identify the place which he or
she is supposed to go at. This is looking forward to being the most user-friendly online map
that has ever come to existence. The animation put together with the 3-D street view, the real
time tracker and the pop up identification of places on the map, make this application worthy
of being the best online map in the market (The next level of Google Map is here!, 2018).
“We looked at everything from customization capabilities and the ability to draw layers to
accessing Street View and point-of-view manipulation, and Google Maps Platform met our
every need. The alternatives didn’t come up to par, so it was a no-brainer”, said Elizabeth
Schreier, Director of Digital and Social Engagement, Allstate, on collaborating with Google
for the development of the product ("Geo-location APIs | Google Maps Platform | Google
Cloud", 2016). To take the numerical value, according to Charlie Hale (Google policy
analyst), Google maps are valued at $37 billion dollars in the geo-services industry
worldwide, as reported by The Washington Post, in 2013 (Gorelick et al., 2017) . This is
higher than any other geo-service brand in existence, reflecting the usefulness and aesthetic
value of the product. The value will most certainly go up, once the launch of the updated
Google Maps is complete.
Since 2016, Google has launched a new satellite imagery from Landsat 8, which
contained data of over 700 trillion pixels. To facilitate their mapping and scaling, Google also

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had to acquire Urban Engines, which used to be a mapping analytic startup. It also
collaborated with Allstate, SunSurveyor and Redfin for the development of the product, and
Allianz, dpd and Harley Davidson for the application of the product. This shows the level of
collaboration which was required to ultimately bring the innovation strategy of Google to
fruition.
2.5 Deployment Strategies
Google generally uses the Ramped strategy and the A/B testing strategy as its
deployment strategy. In the ramped strategy, also called the roll-out update strategy, Google
gradually updates an existing version of an application over time, before releasing it into the
market, in a way that it completely replaces the previous version over time (Wang, Voss &
Zhao, 2018). For example, Google kept updating Gmail to include the “unsend” feature for
months, before rolling it out late last year, when users were required to update the
application.
On the other hand, an A/B testing strategy includes choosing a set of selected
customers, letting them use an unreleased or partially released product and checking if
everything is according to plan before rolling out the update (Maksymyuk, Klymash & Jo,
2016). As discussed earlier in the report, Google uses a lot of customer-centric tactics as a
part of its innovation strategy and this is just another example of how the company gives this
approach a significant amount of importance.
3. Conclusion
From the above discussion, it can be concluded that Google.Inc is a company that
gives a significant amount of consideration and importance to innovation and customer
needs. It has various strategies related to innovation, expansion and deployment that give the
company a competitive edge over the other brands. The company has separate research and

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product teams who share a loop of feedbacks in between them to ensure that the company
only comes up with the most innovative and unique products in the market. The company has
successfully managed to tie up with over seventy corporates in order to get its applications as
the default ones in their devices, which is a part of Google’s expansion strategy. Its newly
announced update of the Google Maps is a highly anticipated product, which has
demonstrated the advanced technology that the users will be able to use once it is launched. It
took several collaborations with various companies to ensure that the innovation project
proves to be a success in the new generation.
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