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.

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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.

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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

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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.

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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).

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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

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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

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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

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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

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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

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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

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 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