BIZ202: Business Environment Analysis and Challenges for Google

This report provides a detailed analysis of Google's business environment, employing the PESTLE framework to assess the impact of political, economic, social, technological, legal, and environmental factors. It examines how these macro-environmental elements influence Google's operations and strategic decision-making. The report delves into specific challenges faced by Google, such as social networking competition, payment and commerce issues, slowing growth, and antitrust concerns. For each challenge, the report proposes potential solutions, including product innovation, improved payment systems, and strategies to maintain market leadership. The analysis also includes figures illustrating economic indicators and social factors relevant to Google's global operations. The conclusion summarizes the key findings, emphasizing the importance of adapting to external factors for sustained success.

Running Head: THE BUSINESS ENVIRONMENT
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The Business environment
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4/20/2019

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Contents
Introduction......................................................................................................................................2
PESTLE analysis of Google...........................................................................................................3
Political factors............................................................................................................................3
Economic factors.........................................................................................................................4
Social and cultural factors...........................................................................................................5
Technological factors...................................................................................................................6
Legal factors................................................................................................................................6
Environmental factors..................................................................................................................7
Challenges and solution...................................................................................................................7
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
The business environment is the integration of internal and external factors that will
affect the company’s operations and strategic decision-making. These will include the
organization’s capability to perform and serve customers while maintaining customer
relationship management. In the report, macro environment factors would be identified and
analyzed for a company to assess the challenges for the company (Adam & Kotler, 2014). The
tool that will be used for analyzing the macro environment would be PESTLE analysis. Google
is a technology company based in America that is focused on internet-included products and
services that includes search engine, online advertising technologies, hardware, software, and
cloud computing (google, 2019).

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PESTLE analysis of Google
Political factors
Political factors are a vital factor of the country in which the company is conducting
business and influence the business to a greater extent. For an instant, one of the constraints is
the political stability of the country. The restrictions related to the political system is few for
Google like one of the issues faced by Google would be the Department of justice as various
inappropriate content is available on the net that is restricted in various nations. The issue with
Chinese political system related to censorship of searching outcomes, due to which company has
to develop privacy conditions over the homepage (Feng & Chari, 2018). From the figure below,
it can be observed that the political stability is not very strong in Australia, which could be one
of the threats for the company as this could lead to rapid change in government regulations
(Chari & Feng, 2018).
Another political constraint includes a tax rate in the nation, which are different for every
nation. For example, In Australia, the tax rate is thirty percent since many years, which reflect
that the company profit margin would be similar since years where the tax is considered
(theglobaleconomy, Australia/corporate_tax_rate, 2019).

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Figure 1: (Source: (theglobaleconomy, Australia/corporate_tax_rate, 2019)
Economic factors
The global sales of the company are affected by the economic condition around the
nations. One such nation would be the United States, where the company actually is located.
Although these crises would not affect to greater extent to the company because the company not
providing goods or services directly to the customers but it would affect the advertisement funds
received by Google. One of the economic constraints that would affect Google funds would be
the GDP of the company.
For example in case of Australia, From the figure below, it can be said that the GDP of
Australia is increasing which indicates that the spending power of people is also increasing
which would provide Google top increase the fund from advertising companies, or films.

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Figure 2: (source: (theglobaleconomy, Australia/gdp_current_local_currency, 2019)
Social and cultural factors
Social factors can be beneficial for Google, the reason being the there are no particular
restricted related to this factor, the reason being the services provided by the company is for all
customer segments. For instance, an individual of any age, sex, nationality, religion, and living
conditions could use the services as per their search and preferences. Google is not directly
depend on any geographical boundaries and with widespread of technology; the company is
expanding around the globe. Google’s social factors are considered globally which indicates that
it is serving Multilanguage society.
One of the social factors that would increase the use of Google services would be
population size of the nation, the larger the population size the larger customer group would be
using the cloud services by the company, and eventually led to increase in the sale of its services
by various advertising companies. (Harrigan & Choudhury, 2014). For example, the Population
size of Australia is increasing as presented below, which indicates a beneficial constraint for the
company.

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Figure 3: (Source: (theglobaleconomy, Australia/Population_size, 2019)
Technological factors
Technology is one of the major aspects in case of internet related products by Google and
it is continuously updating. Through this, it can be said that the Google is rapidly expanding with
continuous updating in the system, for instance new technology in the systems of the company
may aid the services by the company to perform better and faster to prevent its competitors from
having technical information. (Ennis, 2016). This factor is the major advantage for Google
because it is the opportunity for the company to decrease the cost of the services and enhance the
service quality offered by the company.
Legal factors
Legal rules and regulation of each country vary and largely affect the licensing
requirements of the business. For instance, it includes problems considering each individual
using the Internet. In case of legal requirement associated with Google would be a copyright
issue because people can copy the data from the internet or steal the information from others. For
this reason, the company has developed a page with copyright data regarding the legal or illegal

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information. The privacy laws are the most important laws pertained to the company like the
latest issue concerning antitrust in the EU region.
Environmental factors
The environment is to be protected and business effect the environment of the nation. For
instance, the availability of water resources is a major challenge in some nations or energy
consumption. The company considered corporate social responsibility and sustainability action
to protect the environment across the world. For example, some initiatives considered by Google
include looking for reduced carbon footprint like the use of specialized monitoring systems, and
electronic controls.
Challenges and solution
Considering the external factors of the company, some of the challenges faced by the
company include:
1. Social networking – With the increase in other platforms like Facebook and Instagram,
the Google services like Gmail or Orkut has not been used for posting a picture. Young
generation prefers to spend the time of these social platforms for chatting or being social
that Gmail or Google plus. Moreover, with a change in social trends the challenge is that
the advertisement source has been increased for the company to social media advertising
that is through Facebook, twitter, or Instagram, which could decrease the advertiser's
fund for Google in near future. Even if the company has a monopoly in the tech industry,
the indirect competition for the company exists (cnet, 2019).
The solution to this problem would be a new product by Google that could able to
compete for these social media platforms and become a new place to be social for people.

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The company can go for innovation in the industry and gain market leadership over
Facebook.
2. Payment and commerce – The Company have been trying to invent new ways to provide
payment methods for the customers but some of the methods have found to be successful
but some has been failed. For example, Google wallet remains a priority, company’s
payment product, and Google has developed better and faster payment system for
Android users along with Google credentials. For the solution to this problem, the
company has to consider the spending of the company each day (Gong & Yi, 2018).
3. Slowing growth – Google revenue was slowed down to 21 percent in 2013. However, the
company continues to pretend and the company takes actions as if the company is in
growth. The market has found to be stagnant which must be considered by the company
to increase the sale in the future.
The solution to this challenge would include an increase in the number of services and
products to the customers. Innovation would be the key for the company to enhance the
market. Moreover, the company must increase top talent like engineering team to remain
a market leader and keep the company growing (Craig & Douglas, 2015).
4. Antitrust – Antitrust authorities are ramping up and doing inquiries of the tech giants for
marketplace domination. Recently, the European Union penalized Google with $5.1
billion in an antitrust act for exploiting its “Android operating system.” Moreover,
President Trump believed his supervision is “very earnestly” seeing antitrust action
beside Google, Facebook, and Amazon. The company can solve this issue through
increase the privacy level for its customers (nytimes, 2019).

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Conclusion
Google is a technology company based in America that is focused on internet-included
products and services that includes search engine, online advertising technologies, hardware,
software, and cloud computing. The restrictions related to the political system is few for Google
like some of the issues would be the Department of justice as various inappropriate content is
available on the net that is restricted in various nations. In the case of legal requirement
associated with Google would be a copyright issue.
Economic factors included global crises, but it would not affect to a greater extent to the
company because the company does not provide goods or services directly to the customers but
it would affect the advertisement funds received by Google. Some of the challenges faced by the
company include social networking, payment and commerce, slowing growth, and antitrust.

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References
Adam, S., & Kotler, P. (2014). Principles of marketing. Australia: Pearson Australia.
Chari, S., & Feng, H. (2018). Research in marketing strategy. Journal of the Academy of
Marketing Science, 1-26.
cnet. (2019). 20-years-on-google-faces-its-biggest-challenges. Retrieved from cnet:
https://www.cnet.com/news/20-years-on-google-faces-its-biggest-challenges/
Craig, C., & Douglas, S. (2015). International Marketing Research. Chichester: John wiley &
sons.
Ennis, S. (2016). Retail Marketing. McGraw Hill.
Feng, H., & Chari, S. (2018). Research in marketing strategy. Journal of the Academy of
Marketing Science, 1-26.
Gong, T., & Yi, Y. (2018). The effect of service quality on customer satisfaction, loyalty, and
happiness in five Asian countries. Psychology & Marketing, 472.
google. (2019). home. Retrieved from google: https://www.google.com/
Harrigan, P., & Choudhury, M. (2014). CRM to social CRM: the integration of new technologies
into customer relationship management. Journal of Strategic Marketing, 149-176.
nytimes. (2019). the-case-against-google. Retrieved from nytimes:
https://www.nytimes.com/2018/02/20/magazine/the-case-against-google.html
theglobaleconomy. (2019). Australia/corporate_tax_rate. Retrieved from
https://www.theglobaleconomy.com/Australia/corporate_tax_rate/
theglobaleconomy. (2019). Australia/gdp_current_local_currency. Retrieved from
https://www.theglobaleconomy.com/Australia/gdp_current_local_currency/
theglobaleconomy. (2019). Australia/Population_size. Retrieved from
https://www.theglobaleconomy.com/Australia/Population_size/

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