Strategic Management of Google: PESTEL and Porter's Five Forces Analysis

This report analyzes the strategic management of Google through PESTEL and Porter's Five Forces Analysis. It evaluates the balance of opportunities and threats and Google’s responses to the major issues. It also covers the strengths and weaknesses of Google’s approach and recommendations for future strategy development.

Strategic Management

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Overview of Google.................................................................................................................3
2.a) PESTEL analysis of Google’s current turbulent global environment and evaluating the
balance of opportunities and threats and Google’s responses to the major issues.......................6
2.b) Using Porter’s Five Forces Analysis, critically evaluating the strength and attractiveness
of the industry that Google is currently operating.......................................................................7
3. A) Porter generic strategies for analysing Google corporate and competitive strategies........9
B) Ansoff Matrix growth strategies for the Google and recommendations for the firm’s growth
....................................................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategic management refer to the ongoing planning, tracking and analysing the factors that
are essential for the organization to meet their desired corporate goals (Bolisani and Bratianu,
2018). Changes within business environments needs corporation to continuously assess and
review their strategies for the success. It is the effective process of setting up the goals,
procedures in order to make organizational more competitive and productive. Generally, it looks
at efficiently deploying the workers and other resources for making the goals achievable.
Google, Multinational technology corporation that concentrates on the Artificial intelligence,
search engine technology etc.
One of the largest company and popularly known for their search engine on world wide
web, they earn maximum of their revenues by advertising. But recently they are facing
challenges as customers are moving to smart phones by limiting the ads that is limiting the
success of the company. Following report will cover the analysis of Google’s strategy and also
discussed the strength and weakness of Google’s approach. Further it discussed the critical Pestle
analysis of Google’s turbulent global environment. it also covers the porter five force analysis
for the organization. Additionally, report will also illustrate the porter generic strategies and
Ansoff matrix along with recommendations.
MAIN BODY
1. Overview of Google
Google is an American international technology organization that keeps their focus on
artificial intelligence, search engine, cloud computing, computer software, e-commerce and
many more areas. The company is most powerful in overall world and maintained their brand
and reputation as world's best technological services (De Moortel and Crispeels, 2018). The
company was established by Larry Page and Sergey Brin when they were at their University in
USA. Since 1998 till now, the company has utilized different strategies, ideologies and bring the
innovation which has balanced their brand growth and development in definite manner.
Critically analysing the development of Google’s strategy over the years since its Initial
Public Offering (IPO) in 2004
Google got their first funding which was secured in august 1998 in the form of $100,000
USD which was contributed by Andy Bechtolsheim and a co-founder of Sun Microsystems. In
January 2004, Goggle has announced the hiring of Morgan and Goldman Sachs group to arrange

an IPO for them. Thus, from the beginning times, the company was majorly different from other
organization where instead of using the investment banks as dictators of the initial share price for
the IPO they had launched an open IPO auction with the buyers who decide on the fair price of
the share (Wirtz, Müller and Weyerer, 2021). Google has set up two-tier board of directors, a
model where it is common in some European countries like Netherlands. However, Google IPO
offering took place on August19, 2004 where a total of 19,605,052 shares were offered at the
price of $85 per share value. Accordingly, the sale raised US$1.67 billion and gave a google
market a capitalization of more than $23billion. Google's revenue peaked and raised in forth
quarter and decline in 3% in the first quarter where the business is still strong.
Google’s strategy has been deliberate, incremental or emergent
Google uses a strategy with a combination of deliberate and emergent where it influences
and depending on prevalent business needs and requirements. The deliberate strategy simply
defines as where one arises from conscious and organized action on the part of the business and
its leadership areas. Every organization has required to acquire and implement a strategy or an
approach from wide-ranging perspectives so that the company can achieve their set objectives
(Hitt, Ireland and Hoskisson, 2019). The deliberate approach is one of the major approach which
influences the Google strategies and involves in articulate intentions that are provided in detailed
manner. In addition, the emergent strategy has also been taken over by the Google because of its
nature of application.
Justifying where the strategy fits one or more of these approaches
Using the emergent and deliberate approaches by the company Google, will help them to
obtain the effective outcome and result accordingly. In the research, it has been founded and
identified that emergent strategy is more flexible than the deliberate approach where the
organization can still gain and achieve the set goals and can get the appropriate opportunities
(Petera, Wagner, and Šoljaková, 2020). However, the deliberate strategy benefits the Google in
effective manner where it enables them to apply and do an effective resource allocation, a proper
organizational alignment, blind spot management, unlocking the values and innovation which
overall provides the profitability to the company. Thus, it has been justified that using the
deliberate approach lead to superior innovative performance and helps to bring the innovation in
wider manner from which an appropriate amount of benefits can be gathered and achieved.
Strengths and weaknesses of Google’s approach

Strengths Using the deliberate approach by the company google, it provides the
benefits and effective outcome where it allows them to pan for the future
strategics by using all the information available to them. The Google is
having a strength by using the deliberate approach where it increases the
business alignment with long term goals or a strategy where everyone can be
aligned towards the similar kind of objective. Deliberate companies takes
time to provide an accurate solution where it can be easier to communicate
and ask for the expectations and desired amount of outcome. Also, it
maximizes the success area of the Google where they implement a well-
structured planning ad consideration of the customer activity, market trends
and design the areas to achieve the success accordingly.
Weaknesses Using the deliberate approach also provides some difficulties to the company
as it become difficult for the company to change quickly if the market
changes and depends on the senior manager to set the goals and future plans
accordingly whereas, it creates an issue for the company to implement a rapid
change.
To what extent has senior management been supportive of strategic developments. Finally,
recommending how Google’s approach to strategy development should transform in the
future
Today, the technological organization and their services are used by billion of users all
over the world where the Google is one of the largest technological offering company whose
senior management is very efficient and capable and keeps their focus on the vision and their
strategic areas (Symeonides, Loizia and Zorpas, 2019). However, with the development and
growing of the technology the other rivalry organization like Facebook and Twitter are giving
the high level of competition to the Google where the senior management of the company should
consider more effective strategies and techniques at their place and should bring the innovative
and improve their creativeness to deal and compete with the another rivalry organization
accordingly.

2.a) PESTEL analysis of Google’s current turbulent global environment and evaluating the
balance of opportunities and threats and Google’s responses to the major issues
Pestle analysis is a kind of framework which helps to evaluate and determine the macro
or external environment of the company. The term Pestle stands for P for political, S for social, E
for Economic, T for technology, L for legal and E for environment where these all factors put a
great impact on the company surrounding. Here, performing a pestle analysis in relation to the
mentioned organization.
Political: The first factor of the analysis refers to political areas where the government can
modify and change the exciting polices and regulations as per the different situation occurs.
Looking at current international relations where maintaining the wider free trade agreements
presents and offers the opportunities for the Google. For example, the agreements facilitates the
exports of the company products such as Pixel smartphones where the free trade agreements can
benefit the Google. Thus, the free trade agreement offers by the government delivers the more
chances of the export and imports where the Google can make their products in demands in
market and can sell it in maximum amount from which the company also can set an accurate
strategy to penetrate the market effectively.
Economical: The second factor refers to economical area where it affects the business profit
revenue, growth and market stability. Economics trends can provide the difficulties for the
company to modify and change their business services according to the market economic values.
A rapid growth of the developing countries is also a considerable external factor which is
required to understand the business growth opportunities for Google (Sullivan, Thomas and
Rosano, 2018). The developing countries are offering and delivering an emerging market to the
competitors where they are willing to invest. The demands for the technology related services are
growing rapidly where the Google is one of the most favourable company. Also, in the recent
pandemic, the economy has been lower down where google operates its services and partial
restriction son export and import prevent their growth.
Social: The social factors can directly and indirectly puts the impact on the company where
Google can also get impacted by the different social factors. The increase usage of the social
media platform is a kind of threat due to presence of firms like Facebook where google business
is one of the competition for those companies specifically in online digital marketing areas. Data
privacy has become a huge concern for the Google and many more users where many of them

consider blocking the ads to stop their data being revealed. Google generates good part of the
revenue from delivering the ads where this kind of circumstances can affect the income of the
Google.
Technological: The technological factor includes the technology related items where the
technological innovation can be favourable for the growth of the Goggle. Technology like
internet things which is used by multiple users and usage area is increasing is everyday life
where it can add the growth and development. Company Google can obtain the appropriate
amount of benefits by AI and cloud computing technologies where these are gaining the high
popularity among the individual where the company can add on more unique feature-to its
platform wit the integration of these technological areas (Ali, 2021). Also, today the smartphones
users are increasing on daily basis all over the world where the users can easily able to download
the google search engines and can increase the productivity and growth accordingly.
Legal: The legal issues majorly affects the overall growth of business where the laws and rules
of the particular country can put the impact on the business. The laws can be related to trade
where it can create new opportunitiesfor the company. As, it has been already known that there
are many countries who are applying the legal laws on the online platforms which also can
include the companies like Google. The company can secure up their services for the users and
can maintain their growth. Goggle earns an important part of the revenue from the advertisement
service where the laws against the hold of user information take place and downfall the revenue.
Environment: The environmental factor generally relates to the surrounding of the company
which can impact them in wider manner. The company google can support the ecology and go
green projects which will allow and support them to attract maximum number of consumers
where google has already established a sustainable relationship with the agents and suppliers and
creates a good impression. Also, being a corporate company, Google can also take a part and
support in fulfilling the social responsibilities where it can help the people to draw their attention
and can adopt the maximum number of consumers at their place.
2.b) Using Porter’s Five Forces Analysis, critically evaluating the strength and attractiveness of
the industry that Google is currently operating
To run any business, they are required to understand and adopt some strategic areas and
models from where they can perform accordingly. Google a renowned organization who
implemented the framework to evaluate the competition in the market from where they cane

easily plan their goals and targets and can achieve them accordingly. Here, performing the Porter
Five forces framework which will detail about the company's competitive environment where it
is consisted of five factors which are described below:
Threat of New Entrants: The first factor of the porter analysis illustrates the threat of new
entrants for the company which is a major competitive for the organization where it puts the
great impact on the particular company. For example, it has been already known that there is a
threat of each and every company in relation to newly launched and entrance companies who
bring the innovative products and services which can beat up the existing organization and can
lower down the productivity of the existing organization (Dal Borgo and Sasia, 2021). Thus, the
Google company also can have the threat of new entrant's organization who can bring up the
innovation where the company is required to adopt and bring the innovative services by
themselves to compete with the newly launched companies.
Bargaining power of supplier: There is a lower supplier power of the company Google because
the company is dominated for the longer period. It has been already known that Google is one of
the largest technological company in the entire world where the aspects of the internet and
software industry are dominated. The suppliers mostly depends on the Google for the
advertisement like services where the advertisement system was developed in such an order
where the clients of the Goggle can obtain the beneficiaries. Therefore, a good relationship has to
be maintained thus rendering themselves powerless.
Bargaining power of buyer: The bargaining power of buyer or a consumer is strongly
dominated over the Google. The rivalry companies delivers the new offers in the services of
internet and software industries which make the consumers and buyers to bargain and negotiate
the prices of the services as they have many more other options for taking up the similar services
from another company where the revenues drop down due to reduction in consumer and clients
that seeks the advertisement service (Wit and Pylak, 2020). Thus, Google has expanded its
dominance by developing an open source operating function like Android.
Threat of being substituted: The threat of substitution refers when the company gets threaten
because of different purposes and reason like better offering of the services by any another
company. Google has very low threat of substitution as the internet is the major source of the
information and data in everyday life age. Goggle is dominant over the search engine with such
dominance, the corporation has established itself as a search engine. The Google company can

get substituted by any another company who will being the new technological services more
effective and beneficial than the company Goggle.
Competitive Rivalry: To run any business or an organization, the company has required to
evaluate their competition in the particular industry whereas the company Google commands the
largest share of the internet searches where the greatest rivalry includes the Yahoo and MSN.
These are the most preferred search engines as they are dominant over the internet for many
years because of its creativeness (Snider and Davies, 2018). Google has unique features where
the rivalry company needs improvement on their products to deal and compete with the Google
in definite manner and can obtain the benefits accordingly.
Strength of the five forces
Google is an international organization leading the technological industry in effective
manner where the company uses the porter five forces model which provides the different kinds
of advantages and strengths to the company from where they can be able to grow and develop
effectively. The five forces includes the five factors where the model helps to eliminate the
competition in the market from which the company Google can be able to be aware priorly and
can implement the relevant planning and strategies in regard with the competition (Vlados and
Chatzinikolaou, 2019). Also, it benefits the company by expressing the strengths and threats of
the existing company and identifies the entities holding the power in definite and respective
manner. Also, it provides the different kinds of opportunities to the company Google to expand
their business more widely and effectively. This five forces are helpful in making the corporate
strategy and vision where the company can take decision in definite manner and can obtain the
profitable outcome.
3. A) Porter generic strategies for analysing Google corporate and competitive strategies
Generic strategies help in explaining how corporate pursue their competitive benefit across
their market segment. There are four strategies that is proposed by Michael Porter that are as
follows:
Cost leadership strategy: In this strategy firm targets for the broad and huge market segment, in
this aim to provide the lowest price over the product to gain their attention. For this organisation
uses the two methods for becoming successful by utilising this strategy (Onditi, 2018). They can
decrease the price of product as low as possible or either they can acquire the large market
segment and keep their cost over product at average level. Both assists the firm to minimise the

cost and to enhance their income. By applying this strategy Google company will be able to
achieve the substantial capital along with them and there is also probability for decreasing their
resources and other labour and manufacturing cost.
Differentiation strategy: This strategy suggests that organisations seek to be rare and
distinguished within their industrial dimension which are generally valued by their consumers. In
this firm focus on greater market segment to offer their unique products and services, in this
main aim of firm is to prepare the product that is unique in every aspect and is able to gain the
attention of consumers (Kabeyi, 2018). This type of approach helps in developing competitive
advantage where firm is able to compete with their rivalries and to maximise their profit. Thus it
is found that Google company is also utilises this strategy for their unique offering, to make it
more sustainable they should need to focus on research and development for the generation of
unique ideas.
Cost Focus strategy: When the firm uses this strategy then their focus is on niche market with
few competition, where the main focus is on market segment and the product is available at the
lowest price. If Google company wants to approach with this strategy, then they need to select
the proper niche marker and provide their offering in order to deal with the challenges recently
they have been facing like competition with Facebook. It will help them to develop the customer
base and the product offering will be low and affordable.
Focus differentiation strategy: Differentiation focus, where the firm aim to differentiate their
market segment, in this it exploits the specific requirement of the consumer in certain market
segment. In this firm go with niche market choice in order to offer the rare products into the
market. It also involves the strong brand loyalty of the buyers towards product. Therefore,
Google also need to ensure that their products remain unchanged and having a unique feature to
earn the consumer loyalty that is based on the rareness of the goods.
In regards with the Google they have been using differentiation porter strategy to gain the
competitive advantage (Subrahmanyam and Azad, 2019). Where company looks for the broad
market scope and offers their products and services all around the world. Additionally, they
invest on their research and development (R&D) to prepare the product that are unique and
having a property which makes their consumer to easily distinguish their offering with other
organisation. Company can also proceed to follow the cost leadership strategy as it will help
them to acquire the market share and helps in competing with other firm as recently they have

been facing cutthroat competition from Facebook, twitter, Netflix and Amazon. Therefore, they
also need to empower and encourage their work force otherwise they will have to face
continually challenges and revenue loss in business. Differentiation and cost leadership is
sustainable, and provide the greater possibility for the success, in such organisation need to sure
that they are providing the unique offering for the sustainability of differentiation strategy and
also provide their other products on affordable price for the sustainability of cost leadership
strategy.
B) Ansoff Matrix growth strategies for the Google and recommendations for the firm’s growth
Ansoff Matrix also known as the market expansion framework that is utilised by the
management department of the firm. It usually helps the marketers for determining the potential
opportunities for increasing the revenues for successful business by developing new goods and
services and entering into the new market segment. For the Google ansoff matrix is as follows:
Market penetration: In this strategy market and product remain the same, where firm seeks to
maximise the sale of their existing product within existing market. Generally, Google utilises the
market penetration strategy, specially outside of United states, with the aim to develop the larger
customer base from their existing market (Czinkota and et.al 2021). This strategy can be
achievable by enhancing the touch points for the sales and increasing the direct reach to
consumers by giving the best dealer network and also by promoting the buyer life time value and
maximising the basket share of buyer total spending.
Product development: By following this strategy firm focus on their product development where
they seek to produce the new product and to sell it in new market. With this firm can be able to
introduce modification in their existing produce and to offer new and enhanced product to
consumer in current market segment, it helps in increasing the sales and complete consumption
of the goods. Google company focuses on their R&D for identifying the requirements of the
consumer and to offer them new product based on their demand. It helps the Google to penetrate
the new market as well as it enhances their breadths of reach.
Market development: It is about entering into the new market with existing product, with this
Google can easily increase their business success rate just by introducing their existing products
into the new market (Helmold, 2021). For that their focus should be on R&D for analysing the
possible new market and better buyer segment for the commodities. Following on their consumer
and greater market share, it can be easier for them to expand regionally as well as internationally,

for that they need to make sure that they have done the proper market research as it will lead
them to sustain in new market.
Diversification: It is completely different approach where the product and market are new, in
such firm seeks to enter into the new market by introducing their new product, somehow risk in
this strategy is new. As for the Google they are already an established and successful company
this risk is somehow low for them but for competing with giant established company like
Facebook, Amazon they need to enter market with proper strategies to sustain in competitive
market.
Recommendation for the company
 It is highly recommended to the company to review their strategies and improvise it for
gaining the competitive and other advantages (Hijfte, 2020). If they are focusing on
market penetration growth strategy, then they need to focus on enhancing their
production capacity. Maximum production will help in reaching to more consumers in
existing market also leads to manage their overhead costs.
 Google can also focus on maximising their market investment for creating the
communication and other engagement information which is relevant to different market
groups. Also by increasing their distribution also helps in developing potential consumer
base. For that they can proceed to explore the new market channels for their product
distribution.
 Firm can also begin with the competitive pricing, it assists for maximising the appealing
for the product, it can also be a source of competitive advantage for the firm (Helmold,
2022). They also need to focus on their research and development to offer the unique
products that meets the consumer demand. It will help their customer to remain loyal to
them and to shift to other rivalry’s offering.
 By increasing focus on brand development and awareness can also be beneficial in order
to deal with the challenge which they have been facing recently like customers are
limiting advertisements.

CONCLUSION
The above mentioned report has included the concept of the strategic management in
relation the mentioned organization. The report has covered the strategic management theories
and frameworks in definite manner.

REFERENCES
Books and Journals
Ali, S.A., 2021. An Evaluation of the Marketing Activities of Vast Event Management.
Bolisani, E. and Bratianu, C., 2018. Generic knowledge strategies. In Emergent Knowledge
Strategies (pp. 147-174). Springer, Cham.
Czinkota, M.R. and et.al 2021. Product and Service Decisions. In Marketing Management (pp.
341-397). Springer, Cham.
Dal Borgo, R.W. and Sasia, P.M., 2021. From Profit to Purpose: How Electric Utility
Multinationals Visualize Systemic Change and Adaptation of Organizational Ethical
Culture through Scenarios for 2040. Sustainability. 13(21), p.12045.
De Moortel, K. and Crispeels, T., 2018. International university-university technology transfer:
Strategic management framework. Technological Forecasting and Social Change. 135,
pp.145-155.
Helmold, M., 2021. Successful Management Strategies and Tools. Management for
Professionals.
Helmold, M., 2022. Performance Management as Part of the Corporate Strategy. In Strategic
Performance Management (pp. 1-23). Springer, Cham.
Hijfte, S.V., 2020. Company Strategy. In Make Your Organization a Center of Innovation (pp.
15-37). Apress, Berkeley, CA.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2019. Strategic management: Concepts and cases:
Competitiveness and globalization. Cengage Learning.
Kabeyi, M.J.B., 2018. Michael porter’s five competitive forces and generetic strategies, market
segmentation strategy and case study of competition in global smartphone manufacturing
industry. IJAR. 4(10). pp.39-45.
Onditi, E.O., 2018. Competitive strategies and firm performance: A review of literature. The
Strategic Journal of Business and Change Management. 5(4). pp.1869-1879.
Petera, P., Wagner, J. and Šoljaková, L., 2020. Strategic management accounting and strategic
management: The mediating effect of performance evaluation and
rewarding. International Journal of Industrial Engineering and Management. 11(2),
pp.116-132.

Snider, J.H. and Davies, K.J., 2018. Success strategies for small financial planning
firms. International Journal of Applied Management and Technology. 17(1), p.4.
Subrahmanyam, S. and Azad, S., 2019. Carrefour’s Competitive Strategy-Cost Leadership and
Differentiation: A Case Study. Pacific Business Review International. 11(8). pp.137-45.
Sullivan, K., Thomas, S. and Rosano, M., 2018. Using industrial ecology and strategic
management concepts to pursue the Sustainable Development Goals. journal of cleaner
production, 174, pp.237-246.
Symeonides, D., Loizia, P. and Zorpas, A.A., 2019. Tire waste management system in Cyprus in
the framework of circular economy strategy. Environmental Science and Pollution
Research. 26(35), pp.35445-35460.
Vlados, C. and Chatzinikolaou, D., 2019. Methodological redirections for an evolutionary
approach of the external business environment. J. Mgmt. & Sustainability. 9, p.25.
Wirtz, B.W., Müller, W.M. and Weyerer, J.C., 2021. Digital pandemic response systems: a
strategic management framework against Covid-19. International Journal of Public
Administration. 44(11-12), pp.896-906.
Wit, B. and Pylak, K., 2020. Implementation of triple bottom line to a business model canvas in
reverse logistics. Electronic Markets. 30(4), pp.679-697.