Strategic Analysis of Google's Position in the IT Industry

This paper provides a comprehensive analysis of Google’s current strategies within the IT industry. Utilizing Porter’s Five Forces Model, it evaluates how Google manages competition and maintains its market leadership amidst evolving technological trends. The discussion includes an in-depth SWOT analysis to identify strengths such as financial robustness and language diversity, weaknesses like privacy concerns, opportunities for global expansion, and threats from major competitors such as Apple and Microsoft. This evaluation is supported by insights from recent industry reports and academic literature.

Running head: STRATEGIC MANAGEMENT
Strategic management
Name of the Student
Name of the University
Author note

1
STRATEGIC MANAGEMENT
Executive summary
The aim of the paper is to analyze the situation and condition of Google in the market by using
various strategic concepts. It has been seen that Google has emerged in the information
technology industry in the past thirteen years. This has been possible for the company due to the
technology advancement of United States in which the company had initially started its business.
Slowly it has shifted internationally by various strategies such as business level strategies and
corporate level strategies. Further, Google has always focused at acquisition and mergers for
expanding its business by taking up new challenges. The first acquisition of the company was
when it acquired companies such as Picasa, Blogger and others. This was because the company
wanted to introduce Google Apps in the market. It has also formed cooperation with OHA to
introduce its new android phone to take up the Smartphone market. However, it has also faced a
lot of challenges in the android market with respect to privacy and technical glitch. The company
has also been facing competition from the other technical leaders such as Apple, Microsoft, Bing
and others. However, the company has very less weakness and threat as compared to the strength
it owns in the market.

2
STRATEGIC MANAGEMENT
Table of Contents
Introduction......................................................................................................................................2
External environment.......................................................................................................................2
PESTLE Analysis........................................................................................................................3
Porter’s Five Forces.....................................................................................................................4
Competitive Analysis...................................................................................................................5
Internal environment........................................................................................................................6
Firm’s Resources.........................................................................................................................6
Capabilities..................................................................................................................................7
Core competencies.......................................................................................................................7
Value Chain Analysis..................................................................................................................8
Business level strategy...................................................................................................................10
Corporate level strategy.................................................................................................................11
Acquisition strategies.....................................................................................................................12
Cooperative strategy......................................................................................................................13
International strategy.....................................................................................................................14
Conclusion.....................................................................................................................................15
References......................................................................................................................................16
Appendices....................................................................................................................................18

3
STRATEGIC MANAGEMENT
Introduction
Google is one of the most used search engine throughout the world and has the answer to
almost everything one needs to know. This is how the people as a brand recognize Google. It is
famous for its internet search. With thirteen years of operation, the company has evolved
drastically with a huge brand name and recognition among its users. The company presently
owns about seventy percent of the total search-taking place in the internet. Such a success of the
company is due to their effort and utilization of the competencies of the business. In the financial
performances, as well the Google has proved itself the most profitable company in the world.
This has helped the company to increase its competencies even more. The competencies of the
company also depend on the innovation and advantage that it takes of its resources. The
company has maintained a strong organizational structure throughout these thirteen years and
this has helped the company to grow successfully (Google, 2017). The paper discusses about the
external and internal environment of Google that effects its growth and development. Further, it
analyses the strategy that the company has used in their corporate, business level to achieve all
its goals to become a competitive company.
External environment
The industry in which Google is involved is an Information Technology industry that
offers all types of information to the viewers visiting the site. Google has been one of the most
preferred search engines in the world. Information technology is one of the fastest growing
industries globally making it possible for Google to grow at the same pace as the industry. This
is because the growing nature of the industry has led to an increase in competition in the
industry.

4
STRATEGIC MANAGEMENT
PESTLE Analysis
Political
United States is politically a well stable economy in the world, which makes it a suitable
place for any business to operate. It is highly dominate both republic and Democratic Party
(FocusEconomics, 2017).
Economic
Economically United States is one of the most developed countries in the world with the
GDP of around $18.46 trillion in 2016. The country also has very high standard of living and is
considered as the seventh highest per capita GDP in the world (FocusEconomics, 2017).
Social
Socially and culturally, the country is well developed and modern. The country maintains
the independency of the individuals living there and is highly competitive in every aspect
(Country Comparison - Hofstede Insights, 2017).
Technological
United States is considered as one of the most technologically advanced nation. This is
due to increasing industrialization in the country with high capital availability and increase usage
of information technology.
Legal
The country offers a huge labor freedom and business freedom to help any industry to
start its business easily in the country without much restriction (Bargain et al., 2015).

5
STRATEGIC MANAGEMENT
Environmental
Threats from the environment are increasing in the country due to growing
industrialization. The country has thus taken various environmental policies to guide the business
to use environmental friendly technologies.
Demographic
United States is considered as the third populous country in the world with most of the
population residing the urban region and are educated. They have equal proportion of male and
female in the country (Coale & Zelnik, 2015).
The above analysis it can be seen that the external environment of United States in which
Google operates offers a huge number of threat as well as opportunities for the business. Threat
that the company owns from its external environment is the strict environmental laws in the
country, which require them to design their technology carefully. The country offers a huge
opportunity to the business because of it high GDP growth and high technological development.
Porter’s Five Forces
Threat from new entrants
Information technology industry offers low threat from new entrant as new companies
cannot easily enter the industry. This is because it requires a lot of expertise and capital
investment initially to enter the IT market (Aithal, 2016).
Threat of substitutes

6
STRATEGIC MANAGEMENT
Threat from substitutes for an IT industry is moderate due to constraints in finding
information from physical library. This is because customers prefer internet search more than
searching in the library.
Industry rivalry
Rivalry among firms in information technology is high even though Google offers tough
competition to other companies such as Bing, Apple, Microsoft and Yahoo. Every company try
to take continuous innovation in order to survive the tough competition.
Bargaining power of supplier
Bargaining power of the supplier in the information technology industry is low. This is
because the suppliers do not want to lose business from such big clients such as Google.
Bargaining power of buyers
Bargaining power of buyers are moderately high because the customers can easily change
from one company to other for their search and other needs. Moreover, the customers do not
have any switching cost to choose other company than the other.
From the above analysis, it can be seen that Google has the opportunity of increasing
their market share in the industry due to low threat from new entrant. However, it might face
threat from customers due to availability of competitors (Dobbs, 2014).
Competitive Analysis
Google face competition in the information technology market from Bing and Yahoo.
Google holds 63.8 percent of the market share in United States and the other two competitors
holds only 33.5 percent. Even though the company experiences low threat from its two credible

7
STRATEGIC MANAGEMENT
competitors, yet it faces tough competition in other spheres. Recently, the company has come up
with a new competitor such as Amazon. Bing and Yahoo are similar search engines like yahoo.
However, Amazon offers threat to Google by taking away the market of product search. The
competition Yahoo offers Google is by offering a meaningful internet search o the customers in
few years. Yahoo allows the user to turn their portal into their personal online search engine by
saving the pages they want to view. Other competitors are Microsoft and Apple that offers
software services for businesses. This offers threat to Google by taking away its market share in
the search engine market as well as in other services it offers (Google, 2017).
Internal environment
Firm’s Resources
The resources of the firm are mainly intangible assets such as app development. Software
services, web search, mobile technology are some of the services and intangible assets that the
company offers. The company also own tangible assets in the form of human resource such as
the CEO and other board directors of the company that looks after most of the management
activities of Google. The company uses high technology in advertising and app development
activity. The company held total sales of $23,651 million in 2009 from various services. It holds
about seventy percent of the total internet search of the world (Google, 2017). On the other hand
the sale of the company according to the geographic coverage is the same as the sales in the
operating segment. Google too takes various research and development in various fields to fight
competition in the industry. Thus for the company innovation is a key both for the success and
survival of it in the industry. The company invested $2,843 million in research and development

8
STRATEGIC MANAGEMENT
in 2009. This has helped the company to maintain good reputation in the information technology
industry (Google, 2017).
Capabilities
The company gathered various types of capabilities by acquiring various sites such as
Blogger, Picasa, Keyhole and others from the day it started in the business. This has helped the
company to gain a lot of capabilities over the years of its operation. The main capabilities that
the company has acquired are in various fields such as web search, app development and mobile
computing. The web search that Google offer to the visitors is an indispensable feature that has
taken over the internet. Through Google apps the company offer cloud computing tools that
comprise various apps, which are company acquired, and they personally develop some. Some of
the example of apps that comes under Google’s capabilities is Gmail, Google Docs, Google
calendar and some social networking sites such as Orkut, Reader and Talk. Lastly, mobile
computing is developed by Google, which is regarded as the future of internet and mobile
technology (Google, 2017).
Core competencies
The core competencies that the company holds in the market are the internet search
facility that it offers. From the other capabilities such as mobile computing, app computing,
Google holds it is in the search engine business that it run. Google is considered as one of the
most important service that it offers. Thus, the company hires highly capable engineers and
programmers for making the research result and ranking of the page relevant. Thus, the company
devotes more resources and time to the web search activity then the other products. The search
that Google offers can be done in 130 languages, which makes it very convenient for people
from any origin to find their desired result (Google, 2017). This is a rare service of Google that

9
STRATEGIC MANAGEMENT
has helped them offer different service then other companies. The company holds a core
competency in owning domains of 160 countries and regions all around the world. it is valuable
because it has helped the company to attract customers through the search engine service. The
search service that it offers is costly to obtain and thus it is not easily substitutable by any other
company (Zeenews, 2017).
Value Chain Analysis
Inbound logistic Outbound Logistic Operations Marketing &
Sales
Services
• Investors that
offers fund to
the company
• Employees
that help in
production in
the business
• Advertising
investors that
assist in
marketing
the product
of the
company
• The senior
 Enable we
search for the
viewers from
all type of
fields
 Displaying
advertisemen
ts of
companies
and business
 Launching
new apps
known as
Google apps
from time to
 Google
search
functionality
is the initial
operation of
Google by
creating
search results
and ranking
of the pages
 Try to
balance the
revenue
coming from
the
 Does
marketing
through
Google
Ad words
and
AdSense
 Advertise
banner ads
for their
Google
map app
 Offers
mailing
services
 Storage
services
through
cloud
computing
technology
 Google
maps to
help give
direction to
people
 Search

10
STRATEGIC MANAGEMENT
management
team that
manages the
task of the
company
• Acquisitions
by the
business such
as Bloggers
and Picasa
time
 Offering
Google
Smartphone
developed
with the help
of OHA
advertisemen
ts from
various
consumers
 Formulate
cloud
computing
tools through
Google Apps
 Mobile
computing
activities
services
through
Google
web search
Table 1: Value Chain Analysis
Source: (Olson, 2014).
Firm Infrastructure Human Resource
Management
Procurement Technology
 Cloud
Computing
infrastructure
 Networking
infrastructure
of Google
 Employees of
the company
that help in
offering
services and
products
 The
 Acquired
companies
such as
Blogger and
Picasa to help
develop their
 Cloud
computing
technology
 Networking
technology
 Server
hardware

11
STRATEGIC MANAGEMENT
 Hardware
and software
products
management
team that
manages the
activities
 Engineers and
programmers
that design the
programs
own apps
 Procured
Open
Handset
Alliance for
helping them
launch
android
mobile
phones
such as with
Dell, HP and
others
 Bandwidth
technology
for
transferring
data
Table 2: Value Chain Analysis
Source: (Gereffi & Fernandez-Stark, 2016)
From the above analysis, the strength and weaknesses of the company can be concluded. Thus,
refer to appendix one for further details about strength and weaknesses of Google.
Business level strategy
The company takes various strategies from time to time to fulfill its goals and to become
a successful organization. The company to meet with the challenges that occurs from time to
time also does it. Business level strategy that the company takes includes the internal structure of
the organization, the management activities, the leadership styles and others. This is done to
maintain professionalism in the organization and for successful management of various
operations (Rothaermel, 2015). Company holds a good and efficient management team at the
higher level. This is because the success of the company has been largely dependent on its

12
STRATEGIC MANAGEMENT
leaders. The CEO of the company has always been critical for Google from the tie it has started.
The company has always focused at innovation and great ideas to enter the market in order to
offer rare services. The company has always wanted to become the most important and useful
search engine. This goal of the company has helped it to become one of them in recent times.
Moreover, the company has also targeted other markets such as the android market, the apps
market and the software market. It has always aimed to enter the life cycle market by bringing
diversities in their operations and delivery. The company has always operated with the strategy
of taking investments from huge investors. The first investment that the company received while
starting its operation was of $100,000 and some of the investment came from the advertising
revenues. Thus, Google has always used the strategy of utilizing the revenue that it receives from
the advertising from its AdWords and AdSense. The company has also adopted the most
specialized and expertise programmers from all over the world to develop its products and
services (Google, 2017).
Corporate level strategy
Corporate level strategies include the strategies that the company uses for its external
partners and external environment to facilitate the operation and other activities of the business
in their internal environment (Hill, Jones & Schilling, 2014). The first corporate level strategy it
took was to form acquisition with other companies and websites to help them assist in the
development of the apps. In order to deal with the competitive environment that Google faced it
was necessary for the company to design such a corporate level strategy. In the search engines,
the company has adopted various key areas that are comprehensive and relevant. The company
has always focused on continuous advancement in the search engines such as making it easier,
easy to access and others. In its advertising activity, the company has always strategized its

13
STRATEGIC MANAGEMENT
activity by offering cost effective, relevant and targeted ads. For the purpose, the company has
formed AdWords and AdSense that facilitating its advertising work and has been one of the best
products of Google. For improving its information technology offering that is the main activity
of the company, it has introduced various apps from time to time (Google, 2017). The company
has also drawn strategy in the mobile market as well in which it forms the android handsets that
proved to be a remarkable success (Arasti, Khaleghi & Noori, 2017). In this field, as well the
company distributes free operating system to the manufacturers of the handsets. Further, the
company has always involved itself and used its profit in research and development to allow
innovation in the industry. These are the strategies used by the company at the corporate level so
that it can be successful in the industry and fight out competition effectively. Google has offered
a tough competition in its online search market that has put back other companies like Microsoft,
Apple and others (Google, 2017).
Acquisition strategies
Acquisition is yet another strategy the company has followed since beginning that has led
to their success and proper implementation of ideas in the software market. The first acquisition
that the company took was while implementing and formulating the application. The acquisition
happened when Goggles took over companies like Blogger, Picasa, Keyhole, Writely to help
them design various application that the company wanted to introduced. These acquisitions
helped in various activities such as Picasa helped in developing Photoshop apps, Blogger helped
the company to develop web blogging software. Other acquisitions are YouTube and Writely
that helps in forming videos and document editing respectively. Such acquisition has facilitated
the company to be successful in four major areas such as web search, advertising and app
development (Greve & Zhang, 2017). Other acquisition was the codes that the company took

14
STRATEGIC MANAGEMENT
such as North American Industry Classification and Standard Industrial Classification. These
codes helped the company to deliver all type of facilities and products. In the age of internet,
such technology advancement and acquisition strategy adopted by the company has helped them
to develop in a better way and enter the new market sphere every now and then. Information
technology industry is growing at a faster rate and such acquisition is important for the company
to take the success of other companies and use it for the betterment of Google. In total Goggle
has been able to acquire over hundred companies such as Motorola, YouTube and others for
spreading and increasing its services (Google, 2017).
Cooperative strategy
Along with acquisition, the company has also used cooperative and merger strategy to
cope up with their challenges and enter the market that it has not entered initially. Such strategy
has helped the company to take up various activities in which it was not efficient. One of the
cooperative strategies that the company took was forming cooperation with Open Handset
Alliance (OHA) that develops android, which is a mobile operating system. This enabled
Google to form an open and free platform for the mobile users. The company to compete with
Apple and other mobile companies like Microsoft did this by enabling formation of apps that the
consumers can purchase from the third party. Other companies such as Motorola, HTC and
others also joined in the merger with OHA to form the mobile system called Android (Google,
2017). The Android feature of Google has enabled them to introduce the flash feature in their
mobile which is not even offered by Apple. Android made sure in their next launch they
introduce flash as well as the other advanced Microsoft features. Along with this the companies
cooperates with other companies that involves in various research and development activities on
behalf of Google (Ferris, Jayaraman & Sabherwal, 2013). This has helped the company to carry

15
STRATEGIC MANAGEMENT
out successful research and innovation by estimating their weakness and areas that are lacking.
Cooperative strategy has thus been beneficial for the company in many ground s along with
being cost effective (The Economic Times, 2017).
International strategy
The company that exists worldwide and runs its business in almost all the countries has
initially taken various international strategies as well in order to make its existence at every
possible region. Even though the company is still expanding its market yet the brand value and
recognition that it has created is due to the initial international strategy the company took for
expansion (Verbeke, 2013). One of the international strategies that the company used to expand
globally is the strategy of entering the Android market. Android market has been increasing
initially with a large number of companies coming up with Smartphone all over the world. Thus,
Google decided to enter the international market with its new Smartphone product that is in great
demand nowadays. However, the company proved to be very successful in this strategy by
conquering the market with its Android phones. Other strategies are the browser and web search
formulated by the company such as Google Chrome, Gmail ad others are made available in 130
different languages. Thus, it will help everyone around the world to browse and search any
information that the viewers want easily in their own language. This shows that the company
wants to expand globally by aiming all the potential countries sin the world. The company has
also been able to own the domains of more than 160 localized nation and regions of the world
(Google, 2017). The cloud computing system of Google has also help the company to collect a
store data from any place of the world making the globe a smaller place to deal with. Its web
search facility is the most important way to join the world where the viewers can learn about
anything they want from all around the globe. Google took some of these strategies in order to

16
STRATEGIC MANAGEMENT
expand internationally and take up the overseas market with its cooperation and acquisition (The
Economic Times, 2017).
Conclusion
From the above discussion, a conclusion can be stated that Google has been successful in
everything that it has done such as strategies, expansion, value acquisition and others. The
company has emerged from a small software developing company by acquiring some company
to facilitate its app development to a big giant n the information technology industry. The
company has used a lot of strategies in its business as well as corporate level such as formulating
internal organizational structure and external partnership. The company has also followed
continuous acquisition and merger with other companies in their software development, Android
development and other activities. This has helped the company to enter the domestic as well as
international market with the most valuable strategies. It has enabled the company to take the
advantage of other company’s strength and utilize it for their own weaknesses. The company
also maintains a strong management and leadership team in the organization to look after every
task that the company is doing. This has helped the company to grow continuously over thirteen
year. These strategies of the company have helped Google to survive and give tough competition
in this tough competitive environment of Information Technology industry. This can be seen
from the strength and opportunities that the company has achieved over the past few years.
Further, it was seen that the external environment of United States has helped the company to
develop the software and product it wanted to because of the technology development of the
country.

17
STRATEGIC MANAGEMENT
References
Aithal, P. S. (2016). Study on ABCD analysis technique for business models, business strategies,
operating concepts & business systems. Browser Download This Paper.
Arasti, M., Khaleghi, M., & Noori, J. (2017). Corporate-level technology strategy and its linkage
with corporate strategy in multi-business companies: IKCO case study. Technological
Forecasting and Social Change, 122, 243-252.
Bargain, O., Dolls, M., Immervoll, H., Neumann, D., Peichl, A., Pestel, N., & Siegloch, S.
(2015). Tax policy and income inequality in the United States, 1979–2007. Economic
Inquiry, 53(2), 1061-1085.
Coale, A. J., & Zelnik, M. (2015). New estimates of fertility and population in the United States.
Princeton University Press.
Country Comparison - Hofstede Insights. (2017). Hofstede Insights. Retrieved 24 October 2017,
from https://www.hofstede-insights.com/country-comparison/the-usa/
E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), 32-45.Ferris, S. P., Jayaraman, N., &
Sabherwal, S. (2013). CEO overconfidence and international merger and acquisition
activity. Journal of Financial and Quantitative Analysis, 48(1), 137-164.
FocusEconomics | Economic Forecasts from the World's Leading Economists (2017). United
States Economy - GDP, Inflation, CPI and Interest Rate. Retrieved 24 October 2017,
from https://www.focus-economics.com/countries/united-states

18
STRATEGIC MANAGEMENT
Gereffi, G., & Fernandez-Stark, K. (2016). Global value chain analysis: a primer.
Google.com. (2017). Our latest | Google. Retrieved 24 October 2017, from
https://www.google.com/intl/en/about/
Greve, H. R., & Zhang, C. M. (2017). Institutional logics and power sources: Merger and
acquisition decisions. Academy of Management Journal, 60(2), 671-694.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Olson, E. L. (2014). Green innovation value chain analysis of PV solar power. Journal of
cleaner production, 64, 73-80.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
The Economic Times (2017). Google Inc: Latest News & Videos, Photos about Google Inc | The
Economic Times. Retrieved 24 October 2017, from
https://economictimes.indiatimes.com/topic/Google-Inc
Verbeke, A. (2013). International business strategy. Cambridge University Press.
Zeenews.india.com (2017). Google - Latest News on Google | Read Breaking News on Zee
News. Retrieved 24 October 2017, from http://zeenews.india.com/tags/google.html