Business Environment Analysis of Google: Internal and External Factors

This report provides a comprehensive analysis of Google's business environment, examining the internal and external factors that influence its operations. It begins with an introduction to the business environment and its impact on business performance, followed by a PESTLE analysis that evaluates the political, economic, social, technological, legal, and environmental factors affecting Google. The report then delves into a SWOT analysis, identifying Google's strengths, weaknesses, opportunities, and threats. It also explores the interrelationship between these internal and external factors, highlighting how Google's strengths and weaknesses interact with the macro environment. The analysis covers various aspects, including market leadership in search engines, competition from other tech giants, and the impact of technological advancements and regulatory issues. The report also examines Google's strategies for managing these factors, such as adapting to changing market trends, addressing data security concerns, and fulfilling corporate social responsibility. The report concludes with a summary of the key findings and insights into Google's business environment.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Pestle analysis of GOOGLE..............................................................................................3
P2 Internal and external factors of GOOGLE........................................................................5
P3 Interrelationship between strength and weakness and macro factor of GOOGLE...........8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment is a combination of internal and external factors which affect
business operations. It a collection of individuals, customers ,management and other factor
which can be controlled or not controlled by the organisation but can affect the business
performance, profitability, growth and survival. Google is an American multinational technology
company which is specialised in organizing the world's information and make it universal
available for masses (Tayur, Ganeshan and Magazine, 2012). In this report, there is a discussion
of positive and negative impacts of micro environment on business along with internal and
external analysis of Google. It will also discuss about the interrelationship between strength and
weaknesses of refereed organisation with outside factors.
TASK 1
P1 Pestle analysis of GOOGLE
Every business organisation gets affected with internal and external factors. Some factors
are in the control of the organisation while some others factor are not in the control organisation
so business have to modify them according to situation. External factors which affect the
business of google indirectly are such as below-
Political: Political factors have the direct impact on the business. These factors determine
a government influence on the economy and industry. Political factors include tax policies, fiscal
policies, monetary policies, trade tariffs etc. that a government imposed and its affect on the
business environment in case of google, globalization increases demand for online advertising
which minimizes obstacles to firm's expansion
Positive:The stable political environment minimizes obstacles of the business expansion.
These factors are generally opportunities through globalization demand of online advertisement
to reach global people (Shenkar, Luo and Chi, 2014).
Negative: Google is among those company who store cash in foreign bank accounts to
avoid high American corporate income tax. The political pressure of the countries to companies
to bring their money back as it effect their economy. It would reduce cash flow. Google was

unable to enter in the some potential market because of political reason such as in China. This
limits the company future success.
Economical: Economic factors can alter the market opportunities available to business.
Economic factors have a direct impact on the institution's performance as it remain for a longer
period of time. Increase in the inflation rate affect the pricing strategies of the company. These
factors include interest rate,foreign exchange rate,economic growth rate,inflation rate etc.
Positive: The economic stability of major markets and the continuous growth of
developing nations provide new strength which google can exploit. As these opportunities can
be used for global expansion (Andersson, Forsgren and Holm, 2015).
Negative: Google has immense funds which increase the chances of inflation. If there is
sudden reduction in the value of money then it will create great affect on company's financial
situation. Similarly, Emergent drop in high stock price could harm the organization through
market capitalization.
Social: These factors consider the social environment of the market which include
demographics,population analytics,culture trends,taste and preferences of the customer's and so
on. The increase diversity of user is an opportunity for google to improve its services.
Positive: Increase in the diversity of user is an opportunity for alphabet to provide new
services which match individual preferences. The increased use of trends like telecommuting
increase the use of apps and service.
Negative: The growth of social media is a threat to google because it gives more power
to companies like Facebook and Whatsapp which offer online advertising services for the work
which traditionally done through internet. Google not able to convert its success into other
segments of market like shopping search.
Technological: Technological change have a great effect on the business. These factors refer to
the innovation of technology which help in developing effective operations in the business.
These factors includes research and development and the technological knowledge should be
there in the market (Sassen, 2016). With the development of technology internet services are
available at large scale.
Positive: Voice recognition feature of google increase the popularity in the customer.
Invention in the Microsoft and amazon put pressure on the google for creativity. Technology
help in decreasing the cost and improve the quality of the product with innovation.

Negative: Amazon and Microsoft is developing their search engine rapidly. There is a
possibility that they take position of google in search engine with their technology advancement.
Legal: These are the factors which require more attention from businesses,otherwise fines can be
very high. There are some rules and regulations and restriction are requiredunder technological
sector in every business. Google try to enter in finance sector for which they have to follow legal
procedure.
Positive: Google gives it cooperation for the stoppage of plagiarism. Respected company
follow all rules while taking material by providing source of copyright this will bring a positive
impact on a brand image. Therefore, it will be more popular for security. (Like- David 2008,
Harrison 2010)
Negative: Successful players is stopping alphabet to enter in every sector (like in
insurance sector) through litigation or legal procedure. This will bring a negative impact on other
factors which leads to distract users and focus on other browsers.
Environmental: With the progress of technology,hazardous substance that spoil the
environment which effect the company image . also increases company need to protect the
society. Environment Factors include weather,geographical location, climate change ,etc. These
factors include all those things which can affect the environment.
Positive: Google take care of their working environment for employees. Institution
required a huge amount of electricity to carry out its day to day operations which affect society
on a large extent, for saving society firm use costlier green energy for producing electricity.
Negative: Alphabet make all his efforts to protect the environment from their hazardous
technology which resultant in the increase of operating cost and organisation expenditure .This
make business incapable for offering free services in future such free installation of some basic
software (Welford, 2013).
P2 Internal and external factors of GOOGLE
SW is internal factor and OT is external factor which combine and form SWOT. It is
perform to identifying Strength,Weakness,Opportunities,Threats of the business. SWOT was
adopted by Google to know what a establishment can and cannot do,and what was it 's future
threats and opportunities. It assist the firm in achieving its objectives and the problems which can

affect desired result. Along with this it also tell Alphabet current state and where it can be in near
future.
Strength-
 The biggest strength of google is that is a market leader in search engine with more than
65% share for internet searches which make them to dominate the internet searches
worldwide.
 The adoption of android and mobile technologies make them direct competitor of apple
and other operating system.
 Alphabet has the ability to generate internet user traffic on its site as it was household
brand in the world (Teece, 2012). This help the company to get uncompetitive edge over
its rivals.
 Google added voice recognition and various local language feature in their search engine
which increase their popularity among client as it not presented by any of its competitors.
 Innovation and development work at google keep the company in a moving state.
Weakness-
 Maintaining secrecy- Google does not reveal its algorithm for searches ,customer
information and even basic formulas. Many companies and their government sledging
google for maintaining secrecy. China has banned respective company due to data
security concern.
 Over dependence on ad revenues- The concerned company earn its income mainly from
ad revenues which is more than 90%.However the usage of mobile apps, blocks adds on
their web and mobile platform.
 Portfolio of products- Google is offering wide range of products in which mostly
products are unknown by the customer. Google finance ,book search are the products in
the company portfolio which are not profitable. Alphabet spend a lot of money on these
products they should think about excellent products to earn profit (Charter, 2017).
Opportunities-

 Google glasses- Now a days people are spending money on the purchases a app through
google play with the increase of spending power. In such growing situation google
glasses can help them to earn profit.
 Cloud computing- Computing is a great opportunity through which business of
concerned company can grow. Microsoft and amazon are the big players in this area
whereas google hasn't in the large space. The company can get into this through its
innovative technology. Google is providing storage option through google photos and
google drive but it should move into enterprise market through cloud computing.
 Operating system- The respected company is the biggest opportunity through developing
operating system (android OS) which help them in competing from Apple and Samsung.
 Merger and acquisition- Google can get competitive advantage over its challenger
through merger and acquisition (Gilboy, 2016). It help in exploiting new
skills,technology, copyrights, knowledge, patents and make their commodity grow.
Successful merger and acquisition help in the growth and development of the business.
Threats-
 Facing competition-Google is facing huge competition with Facebook Amazon,
Microsoft ,Apple, Yahoo etc. the top brands defeating company in the field of search
engine,advertisement,cloud computing,etc. China is very advance in the technology the
country have the ability to remove google dominance. This situation make pressure on
the google to concentrate on the business performance.
 Mobile computing-Another threat to google is from the development of mobile
computing that it was not passed to newer companies. Because newer companies have the
ability to exploit the opportunity for becoming mobile computing.
 Patent infringement- Google products is easily imitated in the industry. Concerned
company does not have the capacity to track all the patents infringement. They are not to
do law suits every time as it involve lot of time and money. Already google is fighting a
lot of cases in judicial process ,in which famous matter is oracle.
 Data security- Large amount of information is store in the form of data, in the google
server which create fear for the leakage of important information (Kandelousi, 2011).

P3 Interrelationship between strength and weakness and macro factor of GOOGLE
As business is affected by both internal and external factors there can be chance that
strength of an organisation is affected by the external factors of the same.
The technological factor is the strengthen of the business but it can't be applied in the business
because there more advance technology available in the market by the competitor. Google has
the advancement in the technique but there are more efficient services are available in the
market. They provide large variety of products to the customer but from that only few services
are known by customer as it was not excellent product in term of technology to earn money.
Secrecy is maintained by the google which can be hindered by the political intervention. When
government bodies repetitively ask for the information than they have to provide them which
break their secrecy policy. This result in the infringement of the product in the market.
Saving environment from hazardous substance google are fulfilling corporate social
responsibility (Scheer, 2012). Business use a large amount of electricity for day to day operations
which create global warming in the world. To save society they use green energy for producing
electricity but it result in the increase in the operating cost and organisation expenditure.
Competition help in the growth and development of the business. It able to make company more
productive and innovative and help in the survival for the longer period of time. But sometimes
create pressure on the company to innovate due to which they make useless product for the
society which has no capacity to get customer attraction (Li, and et. al., 2011). Google is facing
huge competition from Amazon and Microsoft as they developing their search engine rapidly
and taking the company position to become more competitive which effect its strength of being a
premium body in its field.
CONCLUSION
From the above report it is concluded that google strength is their technology and work
environment which they provide to their workers. It is also evaluated there is a great dependence
of both the internal and external factors of google. Therefore while taking the decision it is
important that google consider their internal as well as external factors.

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