Strategic Audit Report of Google: Performance and Strategic Analysis

This report presents a strategic audit of Google, examining its current performance, strategic posture, and external and internal environments. It analyzes Google's mission, objectives, strategies, and policies, assessing their consistency and effectiveness. The report delves into the company's history, including its evolution from a search engine to a multinational corporation under Alphabet. It assesses Google's financial performance, market position, and competitive landscape, including the impact of rivals like Yahoo and Microsoft. The analysis includes an evaluation of Google's corporate governance, strategic managers, and the board of directors. Furthermore, the report explores the external environment, considering natural, social, economic, technological, and political factors. The internal environment is examined using Porter's Five Forces model. Finally, the report offers strategic recommendations and discusses implementation plans and evaluation methods.

Running head: STRATEGIC AUDIT REPORT OF GOOGLE
Strategic Audit Report of Google
Name of the Student
Name of the University
Author’s note

1STRATEGIC AUDIT REPORT OF GOOGLE
Executive summary
The aim of the report is to analyse the strategic audit performance of Google . the strategic
audit gives a view about the current situation of the company and how the company is setting
their mission and based on which the company will be able to achieve its objectives. From
the report it will be possible to understand the external and the internal environment of
Google and to analyse the strength weakness opportunities and threats of the organisation.
.

2STRATEGIC AUDIT REPORT OF GOOGLE
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Current situation.........................................................................................................................4
Strategic posture.........................................................................................................................5
Strategic managers.....................................................................................................................6
External environment.................................................................................................................7
Internal environment................................................................................................................10
Strategy goals...........................................................................................................................17
Strategy alternatives.................................................................................................................17
Strategy recommendations.......................................................................................................19
Implementation plan.................................................................................................................19
Evaluation and control.............................................................................................................19
Conclusion................................................................................................................................19
Reference..................................................................................................................................20

3STRATEGIC AUDIT REPORT OF GOOGLE
Introduction
The strategic audit is a very efficient method to check whether a organisation is
fulfilling its organisational goals in the most appropriate manner.in addition to that the
strategic audit also find out whether the organisation is making optimum utilisation of the
resources available to it.it is beneficial for every organisation to have a successful strategic
audit process. The strategic audit is a continuous process. based on the strategic audit report
the owners of the organisation takes decision and the team of the auditors checks the audit
process on periodical basis in order to revalue the performance of every unit of the
company .the management update the strategic plan once it achieve its goals.
Discussion
Background and issues
Company background
Over the last two decades that is more than 20 years Google has made enormous hike
from a dorm room project to a multinational company. The main products of Google include
android, search maps Ads, YouTube cloud and drive. With such versatile range of products
Google has earned a stake in all of the corresponding markets like search engine, advertising,
productivity suits mobile and office suites. The company until date has an employee strength
of 88000 in over 70 offices in the whole world and is continually innovating.
Company history
Larry page and Sergey Brin met at Stanford University in the yea 1995. A year after
their meeting they planned to build a search engine named Backrub from their dorm rooms.
They soon change the name into Google so that their mission can be easily reflected from the

4STRATEGIC AUDIT REPORT OF GOOGLE
name, which is “to organise the world’s information and make it universally accessible and
useful”. At the time of inception of Google Inc, Andy Bechtolsheim invested $100000 to
Google and with this first loan Google was able to take a garage in Menlo park on rent and
set up the
In this report, the strategic audit process of Google has been explained. The strategic
audit process can be classified in to various steps these are enumerated below:
Current situation
Current performance
The current situation of Google is very impressive as it has been able to increase its
revenue in the last few years. The company always try to upgrade its products and that
enables it to capture more market position and attract more users. The company having a
huge market exposure for which it has been able to sustain in the market even it has several
large competitors like yahoo, and Microsoft Corporation Bing who give strong competition to
Google.
With its expansion, Google has started to enter into new markets .as the brand started
to get diluted so in order to response with the situation Larry and Sergey created a new
company named alphabet. Alphabet is the parent company of Google, X, Google nest Google
ventures fibre and more. The company was created in order to slim down Google ands
separate the companies that are not directly related with the core mission of Google. The
growth of alphabet was incredible and it fetched revenue of $110.90 billion with a year on
year growth of 23%.
In spite of the getting, the recognition of the number one company in the world
Google never looses its focus from its core mission. The vision of the company is to provide
reliable information in one click and its strategy is to explore different type of markets in the

5STRATEGIC AUDIT REPORT OF GOOGLE
field of information technology and by doing so they want to create a impact on the society.
With growth various complicated issues also comes.as Google does not updated its mission
statement for many years , the present strategy does not align with the mission. Making a
impact on the society is the main objective of Google as stated by the founder Larry page.
This objective does not match with the mission of organising the world’s information and this
become a major cause of happening of any complex issue in the future.
Strategic posture
From its inception date, Google’s main objective is to organise the world’s
information and make it globally accessible and useful. The management of the company
believes that giving importance to the needs of the users is the only way to accomplish the
mission of the organisation.
Since maximum of the products of Google are free so the primary source of revenue
of Google comes from the advertising, search advertising, Ad words, AdSense provide
almost 86% of its 2017 revenue. The additional revenue comes from apps (in apps purchase
and digital content in the Google play store, cloud offerings and hardware.
Objectives
The objectives of Google is to provide excellent service to there users. In order to
fulfil the demand of the users the company has developed various products like Google
images , Google books ,Google scholar, Google finance , Google videos , Google maps ,
Gmail, Google news, Google pay and many other applications and that helps the users to get
information and satisfy their requirements .
Strategies

6STRATEGIC AUDIT REPORT OF GOOGLE
The main strategy of Google to stay relevant in the market is to bring more speed in
their tools ad to bring more information in their various apps. The increasing rate of
competition has forced the company to bring regular update in their products, which enables
the users to get the best products from them. Google has taken the strategy of bringing
innovative products through continuous research and development in order to raise the
standard of their products to the next level and beyond the reach of the other market
competitors (Shaukat, Amama, Yan Qiu, and Grzegorz Trojanowski).
Policies
The main policy of Google is to increase its brand identity and to increase its strong
brand recognition. The name Google itself attracts many users and that helps the company to
generate revenue.
Strategic managers
Board of directors
The board of directors of the company has a very strong group of members that
consist of the two founders Larry page, Sergey Brin both of them has founded the company
in a garage, and there from has taken the company to become one of the largest companies in
the world. Another important member of the board is Eric Schmidt, who is the chairperson
and CEO, joined Google in the year 2001 and helped the company to grow from a Silicon
Valley start-up to a global enterprise. There are other board members like Nikesh arora 41 ,
David c Drummond , Patrick pichette , Jonathan j Rosenberg 48 Shona l brown 43 Shirley m
Tilghman who helped the company to take various strategic actions that enables the company
to achieve its desired objective.

7STRATEGIC AUDIT REPORT OF GOOGLE
External environment
Natural environment
Google does not directly effect any environmental pollution.
Social environment
Economic
The world economy has helped Google to grow rapidly as users wants to know more
information about the world economy so it attracts more individuals to use Google.
Technology
As USA is country, which is highly advanced in technology so Google get the best
advantage of the technological benefits which is very essential for the company to grow
rapidly.
Political legal
In the recent days the technology industry has faced several threats from the political
environment in the united states specially those who are involved with user data and
advertising. The government that affects the business operation of Google has implemented
strong legal regulations.
Social/ physical environment
Due to the lack of safety with private information, people are more anxious to allow
companies to get access to the personal data. This ahs hugely affected the operations of
Google as its ad targeting is founded in personal user data (Medina Munro & Belanger 2017).
From the external analysis, it has been able to find out the strength and weakness of
the organisation. It has been observed that Google has faced threats from the political and

8STRATEGIC AUDIT REPORT OF GOOGLE
social environment and it gets opportunities from the technology and economy factors of the
external environment.
Task environment
The porter’s five forces model ahs been selected to analyse the internal environment
of Google.
The five forces model consist of the following five factors
Competitive rivalry model
There are currently many rivalries in Google’s various markets. The cost of switching
from ne search engine to another is very low so it is very difficult for retrain the users for
long time and the competitors will be able to take away the customer.
Bargaining power of the buyers
The individual does not contribute much to the revenue of Google so they have very
small influence on the operations of Google. In the technology industry the bargaining power
of the suppliers are very high as they always have the option to shift from one search engine
tool to another (Anand Gopesh and John V. Gray) .
Bargaining power of suppliers
Google has a several number of products and each product is made up of diverse
materials so it is easy for Google to switch supplies. Therefore, the bargaining power of the
suppliers is relatively low.
Threat of substitutes
There very few numbers of substitutes available in the technology market so the threat
from substitutes is low for Google.

9STRATEGIC AUDIT REPORT OF GOOGLE
Threat of new entrants
There are barriers on the entry in the technology industry for which the threat of new
entrants is low.
Summary of external factors
External analysis
Opportunities Weight Rating Weight score Comments
Expected number
of users will
increase by 80%
by 2030
0.3 5 1.5 Increased
demand for
web based
information.
Number of
substitutes will get
reduced
0.2 5 1 Due to the
entry barrier
new
substitutes
will not
evolved
easily.
The
confidentiality of
the personal data
of users
.4 5 2 Google should
bring new
technology to
protect the
personal data
of its users.

10STRATEGIC AUDIT REPORT OF GOOGLE
Internal environment
Corporate structure
Alphabet, which is the parent company of Google, is known for its huge number of
capital at its disposal. It had $152.50 billion total shareholders equity, $40.30 billion common
and capital stock at par value and additional par value and additional par value and $113.30
billion in retained earnings. With such a huge amount of fund, it is expected that the debt
burden of the company is not high with up to $8.90 billion of total debt capital in 2017. The
debt to equity balance is 0.058%so the percentage of debt in comparison of the equity in the
capital structure. The net worth of Alphabet is $612.39 billion (Bijl).
With such huge capital base, the company has established different units from which
the company used to operate and make continuous innovations in order to align with the
mission of the company (Sarwar, Dilshad, Muthu Ramachandran, and Amin Hosseinian-Far).
The company under then leadership of their eminent board members has been able to expand
the activities of the organisation all over the world.
Corporate culture
The corporate culture of Google is world famous. All the employees in the
organisation are given equal importance and a perfect work life balance is maintained in the
organisation. The CEO used to look after all the affairs of the company and that leads to the
development of the company (Phadermrod, Boonyarat, Richard M. Crowder, and Gary B.
Wills).
The company though make huge success but the founders always state that without
the contribution of the 88000 engineers’ salesperson and other employees Google will not be
able to innovate and sustain the competitive market (Golyash Iryna Valentina Panasiuk and
Svitlana Sachenko).

11STRATEGIC AUDIT REPORT OF GOOGLE
Corporate resources
Marketing
Under the leadership of the Marvin chow, the global vice president of Google the
company is looking forward to capture more market share and give more competition to its
rivalries. With the strategy to explore other products apart from the searching engine the
company is now giving more emphasis to promote the newly launched products in the market
like the Google pixel, Google nexus mobile phone and many other products, which Google
never produced before. In Google, the marketing operations have increased and the it is
expected that it will rise in the future also (Edelman Benjamin).
Finance
With such a huge fund base Google has to mange the finance properly and that will
help the company to operate efficiently. The finance director of Google Warren Wang has
been able to control the finance team effectively and manage the funds effectively so that the
company can make optimum utilisation of the funds available (Deery Margaret and Leo
Jago).
The major financial ratios like the return on assets return on equity, EBITDA margin
and net profit margin of Google were at stable a condition, which proves that the company
has been able to maintain a steady growth over the years (Dudin et al).
Research and developments
The research and development team of Google is very efficient and it has been
possible for Google to be updated due to the continuous effort of the research and
development team. The founder of Google from its inception date has given more emphasis

12STRATEGIC AUDIT REPORT OF GOOGLE
on the research and development programs which made Google so successful for such a long
time (Atwal Glyn and Alistair Williams).
Operations
Google is the global leader in providing information to its users at free of cost. The
continuous innovation in the operations has made Google as one of the highest profit earning
company in the world. Due to its continuous innovations, it has been possible for the
company to sustain in the competition (Aithal).
As Google has observed that people is changing the platform of searching of
information from desktop mode to mobile the company has decided to enter in the
production of mobiles also this indicates that the operational strategy of Google is made in
accordance with the demand of the market (Lancaster, Geoff, and Lester Massingham).
Human resource management
The co founders’ Sergey brin and Larry page are still active members of their board of
directors and they always give importance to their human resources. In Google the employees
are given full liberty to give their opinion and innovative ideas in the process of operations
and that give motivation to the human resources of the company (Abdel-Basset Mohamed
Mai Mohamed and Florentin Smarandache).
The company also give attractive rewards for best performance and that encourage the
employees to work with more efficiency. No discrimination has been created among the
employees of different units and a global work culture has been maintained in Google
(Nankervis et al).

13STRATEGIC AUDIT REPORT OF GOOGLE
Information technology
Being a company of the information technology sector the information technology
system is very advanced and the information technology team of Google is very efficient to
adopt with any type of changes that is demanded by the users. Google used to spend the
maximum amount of its funds in the information technology department (Bowlin, Kendall
Jessen L. Hobson, and M. David Piercey).
Summary of internal factors
Strengths Weight Rating Weighted score Comments
Revenues from
the merging
market has
increased over
the years
.10 5 .5 Giving emphasis
on serving
customers in
new markets is
critical for
sustainability.
The company’s
expertise on the
information
technology
sector is
essential for the
economy.
0.5 5 .25
Weakness
The competitors
in the luxury
.10 4. .40 This is
considered as

14STRATEGIC AUDIT REPORT OF GOOGLE
phone market is
very high
one of the major
weakness of the
company.
The
confidentiality
of data of users
.20 4 .80 Strengths and
opportunities
has so far
outweighed this
weakness
From the table it is clear that Google has more strengths than weakness. Some of the strength
of Google are stated below
 Leader in the market of providing information to the users .
 Over the years, the volume of the company has expanded and the company has given
more focus on the research and development.
 It gives emphasis on tapping the emerging market.
 The company always give importance in building up excellent infrastructure within
the organisation.
Core competencies of Google
According to the CIO of Google, the core competency of Google relies on its ability
to change and innovate on a continuous basis. To stay relevant in the competitive market it is
required to innovate continuously. Google’s unique competency that helps the organisation to
change a lot is that they constantly hire new employees from different backgrounds and
behave well with them (Broberg et al).

15STRATEGIC AUDIT REPORT OF GOOGLE
In short, it can be said that the main strength of Google is their ability to generate user
traffic their brand name the information and data they gather and the fact that they are the
main search engine for most people.
Strategic factor analysis summary
Strategic factors Weight Rating Weighted score Comments
Strengths
Revenue is in
upward trend
.25 5 1.25 Giving more
importance to
customer service
Weakness
Security of
personal data of
customers
.15 5 .75 This is the only
vital weakness
of Google
Opportunities
Exploring the
new markets
like the
production of
Google pixel
.3 5. 1.15 Increased
demand for
luxury mobiles
is considered as
a major
opportunity for
Google
Threat
Threat from the .1 5 .5 The competitors

16STRATEGIC AUDIT REPORT OF GOOGLE
competitors. like yahoo can
become a threat
in future for
Google.
TOWS matrix
Strengths
Revenue from the merging
markets increased.
Weakness
The confidentiality of the
users is the major weakness
of Google.
Opportunities
The number of users of
Google is going to increase
by 80% within 203.
SO strategies
Heavily focus on providing
genuine information to the
users.
WO strategies
Continue to seek more profit
margin from the new
markets.
Threats
Customers data protection
ST strategies
Through regular up gradation
in the research and
development team it will be
able to protect the personal
data of the users
(Taghavifard, et al).
WT strategies
Take necessary steps to bring
technology that is more
advanced so that users feel
that personal information not
get effected by using Google
(Gupta Gajanand and Rajesh

17STRATEGIC AUDIT REPORT OF GOOGLE
P. Mishra).
Strategy goals
The strategic goal of Google is to increase its margin of profit and the company will
try to solve the problem of public’s privacy concern. Google is now focusing more in
advertisement sales and use of personal usage data for earning profit (Bull et al).
Evaluation criteria
The strategic alternatives will be evaluated on the following three criteria
 Sustainability: does it address key opportunities and obstacles that Google faces
 Acceptability does it meet the stakeholders expectations? Is the level of the risk
acceptable? Is the expected rate of return is acceptable?
 Feasibility would the proposed strategy work in practice. Could it be financed? Do
people and their skills exist or can they be obtained?
Strategy alternatives
Google is now focusing on alternative strategies by bringing new products like:
Cloud computing
The cloud computing industry in the recent days has gained popularity and has the
potential to improve the revenue figures.
Sustainability: the market of cloud computing has a 75% rate of growth and
expanding in his arena would allow the organisation to compete more actively.

18STRATEGIC AUDIT REPORT OF GOOGLE
Feasibility: the strategy is realistic but it involves complete change of the structure. In
the current situation, the company’s sales efforts are focused on advertising so large
organisational changes would be required (Noe, et al).
Acceptability: both the expectation of the public as well as the investors can be
fulfilled by this strategy.
Focus on android ads
Google is trying to shift their advertising focus to mobile advertisement on the
android operating system, the company will get more ads as the number of users will
increase.
Sustainability: this strategy does not figure out any weakness of Google but it
effectively use the opportunity provided by the android.
Feasibility: every day Google hires many people so instead of funnelling them into
the existing ad teams, so the company should give more emphasis on creating experts on
android advertisement.
Acceptability: it is not a radical idea so it will be easier to sell from the viewpoint of
risk.
Make Google pixel a luxury brand
To give more competition to iPhone creates an exclusive reputation of pixel among
the users.
Sustainability: this proposal utilises the strength of the existing android brand and
ecosystem.

19STRATEGIC AUDIT REPORT OF GOOGLE
Feasibility: Google pixel is currently does not have the reputation in the market so it
is required to increase the price point and image of the phone (Husted Bryan David Bruce
Allen and Ned Kock).
Acceptability: the company is very sure about the fact that the phone will be very
popular and will be widely acceptable by the stakeholders.
Strategy recommendations
Going in competition with apple in the luxury phone market is Google’s best option.
The risk factor in this case is low and at the same time it will provide greater profit margin.
Implementation plan
The Google should now start marketing its luxurious phone and should start to sell the
products this will help Google to improve its revenue and to sustain in the competitive
market.
Evaluation and control
The management of Google is comprised of very efficient personalities who have
been able to evaluate the performance of Google effectively and take necessary steps to bring
more control in the operations of the company (Vigna, et al).
Conclusion
In conclusion it can be said that from the strategic audit report it can be observed that
Google is one of the biggest players in the technology industry. The company though in the
recent years faced several challenges due to the problem of confidentiality issue of its users
but still it overcome these challenges and become successful to overcome these challenges
and grow more rapidly in the future.

20STRATEGIC AUDIT REPORT OF GOOGLE
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