Strategic Management of Google: An In-Depth Analysis Report

This report delves into the strategic management of Google, examining its operational activities and the factors that have contributed to its success as a technological giant. The report begins with an executive summary and table of contents, followed by an introduction that highlights Google's evolution and its significance in the tech industry. It then explores Google's external environment using PESTLE and BCG matrix analyses, considering political, economic, social, technological, legal, and environmental factors, along with its competitive landscape. The internal environment is analyzed using Porter's Five Forces, assessing competitive rivalry, buyer and supplier power, and the threat of substitutes and new entrants. The report also discusses Google's business-level, corporate-level, merger and acquisition, cooperative, and international strategies. The conclusion summarizes the key findings and insights, emphasizing Google's innovative approach and its ability to maintain a competitive edge in the long term. The report includes references and appendices for further information.

Running head: STRATEGIC MANAGEMENT
Strategic Management
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Executive summary
This assignment on Google has focused on the operational activities and the strategical
management of the organization. Google is considered as one of the most powerful technological
giants and they followed specific steps to reach that position. They have a distinguished internal
and external environment which has kept them ahead of the competitors. Their various corporate
and merger acquisition strategies have provided tough competition to Yahoo and Bing. Google
follows the methods of innovation to keep in the run of long term sustenance in the technological
field. Their constant upgradation has provided the best speed to the internet users. Their current
policies will provide the an opportunity to continue their business in the same way and be
glorious.

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Table of Contents
Introduction......................................................................................................................................3
External Environment......................................................................................................................3
Internal Environment.......................................................................................................................6
Business- level strategy.................................................................................................................11
Corporate- level strategy................................................................................................................12
Merger and Acquisition Strategies................................................................................................13
Cooperative Strategies...................................................................................................................14
International Strategies..................................................................................................................15
Conclusion.....................................................................................................................................16
Reference.......................................................................................................................................18
Appendix........................................................................................................................................20

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Introduction
This assignment is based on the organization Google and its operational activities. The
sarcasm lies in the fact that if someone is asked the definition of Google then he will have to take
the help of Google only. If the Google search engine is used for its definition then the probable
answers can be, a widely used search engine that uses certain methods and techniques to find out
the results relevant to the searches made by the user (Brett et al., 2017). Google has transformed
itself gradually from the searches of the primary words to widely known words. The webpage of
the Google is set as the standard benchmark for the assessment of most of the internet
companies. The success that has been achieved by Google has become possible as it has utilized
its competencies to face the challenges strategically in order to be the leading technological
innovators globally. This can be considered as a remarkable achievement if the present global
crisis in the economy is paid attention. It also puts emphasis on the interdependent relationship
between globalization and technology. If the financial report of the competitors of Google can be
reviewed then it can be seen that Google had not only taken care of its own progress but also led
the market in sharing data and growth categories. It has achieved the second position in the all
round category of profitability. The previous figures and numbers of Google have given the
competitors a tough competition in the run for finance and market share.
External Environment
In order to analyze the competitive industries that the company Google operates in cannot
be specified using a fixed code (Cordray et al, 2015). It has a diversified portfolio which is
spread in the vast arena of products and services which have evolved around the opportunities
that are brought in by the internet. So it can be an extremely ineffective discussion about the

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aspects of the strategies of Google which are associated with the two most outstanding offerings
of web search and advertising. For the reasons that are mentioned above, an overview of the
external environment of Google industry can be well attained by the main competitors such as
Yahoo, Apple and Microsoft that are faced by the company in its offerings arena. The
competitive environment of Google is complex as different markets and industries are involved
with their separate set of challenges and competitors (Cusumano, 2016).
To analyze the external environment of the organization, PESTLE can be used which
takes into consideration the political, economical, social, technological, legal and environmental
perspective.
Political factors- it is a widespread statement that Google follows monopoly. This system has led
to mistrust of action and it had been called for changing the way in which it carries out the
operational activities. Criticism has also given rise to the fact that Google has tried to control
their power over the flow of information. So the technical experts have observed the fact that the
search results provided by Google can influence the outcome of election.
Economic factors- By accumulating a lot of finance, there lay a risk of inflation for Google. If
there is a chance of drop in the currency value, then it would immediately affect the
organizational value. The cash accumulated by the company can be threatening for the currency
market and the exchange rates (Edelman & Geradin, 2016).
Social factors- With the decrease in the use of primitive computers or laptops, the company value
will be affected. It has been reported that the increase in the use of social media applications such
as Face book and Whatsapp for those activities which were previously done on the internet
including video streaming, search, online shopping and money transfer.

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Technological factors- The technological factors that have affected the business of Google
include the increase in the use of mobile devices for connecting to the internet. The popular
competitors of Google who have introduced search algorithms include Microsoft and Amazon.
With the increasing affinity for the social media solutions and instant messaging services have
changed the way in which Google used to conduct its business (Encheva & Pedersen, 2014).
Legal factors- Google have already penetrated the highly regulated fields such as insurance,
finance, automobiles and communications. This system is responsible for putting up severe
limitations on its operational activities. The cost of liabilities might increase with Google’s entry
in the field of insurance and the experiments done with the delivery services.
Environmental factors- The business model of Google is totally reliable on the data centers and
the other infrastructure of internet which consumes a lot of electricity. Therefore the efforts put
for controlling global warming is to encourage the use of expensive sources of green energy for
producing electricity to increase the operating cost of Google.
The BCG matrix can also be used as one of the strategies for analyzing the external
environment of the Google organization. The BCG or the Boston Consulting Group analysis is a
portfolio diagram which includes cash cows, dogs, question marks and stars. The cash cows are
considered when the company has high market share in a slow industry. The dogs refer to a low
market share in a slow but developed industry. The question marks consider those businesses
which are functioning with a low market share in the high growth market. Finally, stars are those
units with a high market share in the fast industry (Erhemjamts, Li & Venkateswaran, 2013).
The cash cows in the matrix are the search engine of Google is widely used and a reliable
source since its inception. The product has been responsible for bringing in constant revenue.

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The stars in the matrix include the applications such as Gmail, Blogger, Google maps, and
Google docs, Android, Advertising and YouTube. The question marks represent the Chrome
book which refers to the new product and the uncertainty of its success or failure that is attached
to it. The dog in the analysis signifies Google Mar and Google TV which were unable to reach
the expectation of the market share (Gamble & Thompson, 2014).
Fig- BCG matrix of Google
Source- (Faktor, 2013)
Internal Environment
The internal environment involves those events and styles inside the organization which
has an impact on the management, employees and the culture of the organization. The statement
that is provided by Google about organizing the world to make universal and useful information
globally accessible, throws light on the fact that the organization is less interested in maximizing

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its profit and at the same time works hard to meet up to the expectations of the customers by
providing a high quality product. That is why, Google delivers high value product which meets
the consumer needs with a quick and efficient action. According to the organization, the place
where they are placed currently has been possible for their customers (Taufick, 2015). They have
gained this position because of their strategy to hire smart and confident people who might not
be experienced but able enough. The employees of the organization might share a common goal
and objective although they belong to different cultural background, speak a variety of languages
and come from different parts of the world. They put maximum effort to maintain the
organizational culture keeping in mind the different race and background of the employees
which provides an effective internal environment to work for.
The strategic analysis of Google serves at a direction which is different from the external
forces applied in the industry environment. Therefore, Porter’s five forces are used for clarifying
the direction strategically. After it was established in 1998, Google has attained a prestigious
position in the industry for instance, online advertising market. Being such a large enterprise
Google has around 57000 employees in various locations all around the globe. When the five
forces model of Porter is used for analyzing the current business scenario of Google, the
characteristics of the company’s industry environment can be easily determined. The consistent
success of the organization lies on the basis of the organization’s ability to consider the internal
factors (Team, 2014).

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Fig- Porter’s Five Forces Analysis of Google
Source- (Taufick, 2015)
The five forces analysis of the internal environment of Google involves- strong competitive
rivalry from the competitors; weak bargaining from the side of the buyers; weak bargaining
power of the suppliers; moderate threat of substitutes and moderate threats of the new entrants.
On the basis of Porter’s five forces analysis, the competition from the rivals of the company is
considered as a strong factor for the company. The factors of the threats of substitution along
with the threat of new entrants are considered as moderate factors in the internal environment of

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the Google industry. The bargaining power from the buyers and the suppliers are considered as
the least significant factors of the industry environment.
Competitive rivalry is the strong force faced by the Google organization. Under the
analysis by Porter’s five forces, the competition from the rival companies have restricted the
growth and development of the firm. The factors that are a part of strong competitive rivalry are-
large number of firms, large diversity of firms and low costs for switching.
The bargaining powers of the buyers are poor in encouraging the business of Google
(Stevenson, 2014). In the particular analysis model, a weak external force has minimum
consideration while making strategic decisions. The small size of the buyers is considered as
weak force; high and increasing expectation and demand from the buyers are also considered as
weak force; the moderate quality of information refers to the moderate force of the analysis.
Every individual buyer only makes a little contribution in the revenue gaining of Google, thus
applies only a weak force on the company. The moderate quality of information actually implies
the limited knowledge of the customers. For instance, the advertisers might access the analytics
but those data will be limited to inform the advertisers regarding the dynamics and complexity of
the environment of online advertising (Team, 2014).
Bargaining power of suppliers is weak when it comes to the organization, Google. In the
given analysis of Porter’s five forces, it is seen that when there comes a method of selection
among the suppliers, then the bargaining power is weak. The weak effect of force is applied on
the organization due to high availability of supply and large population of suppliers. The large
availability of the supply mixed with the wide population of suppliers reduces the effect of the

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bargaining power of an individual supplier in the business plan of Google (Steiber & Alänge,
2013).
Moderate threats of substitution are experienced by Google that involves advertising
channels for instance radio, TV and print media. The factors that are considered by Google in
this respect are low switching costs and moderate to high availability of substitutes both of which
are considered as the moderate force in the organization. The low switching costs is easy for the
customers to shift from the Google’s advertising services towards the substitute services. In this
model of porter’s five forces, a moderate force is exerted on the business of Google (Shaw &
Graham, 2017). Therefore the all round effect of the factors provides moderate threat of
substitution against the products and services of Google.
Threats of new entry have moderate effect on the business model of Google. The new
entrants can come in the form of new ventures and investments of huge technology companies
and also the start- up companies which deliver the similar products as that of Google. In this five
forces model of Porter, the factors that contribute to the moderate threat of new entrants include
moderate cost of conducting the business. The weak force is exerted on the high cost of brand
development whereas strong force is applicable on the regulatory requirements which can be
easily fulfilled. The moderate cost of conducting a business refers to the fact that a certain
number of start- up companies and some other firms can penetrate the market to come in
competition with Google. Moreover, it is easy to fulfill the regulatory requirements thus,
providing an easy way for the new entrants to get connected and compete with Google
(Shaughnessy, 2014). But due to the high cost of brand development, it might be difficult for
some start- up companies and the other firms to sustain a long- term operation and also because
Google has already become one of the leading and popular brands in the world.

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The internal analysis of Google can also be on the basis of SWOT which is elaborated in
the appendix part attached with the report.
Business- level strategy
At present, Google has been pursuing the generic level strategy of differentiation in the
business by providing different products and services which are unique in their own way and
appealing to the customers. The web search engine of Google is the most famous service offered
by it which helps the user to get hold of a reliable way for searching. The biggest advantage of
the differentiation business strategy of Google is the establishment of the loyalty of the
customers. The current figure of Google’s web search engine is 66% with respect to the
worldwide internet searches. The customers are consistently using the Google search engine for
the ease and reliability of the search results (Schmidt & Rosenberg, 2014).
Google has launched its new service Google Instant which decreases the required time of
search and provide the customers with more predictions and better dynamic results. This service
was actually provided by Bing and Google has won over the competitive advantage because the
time required in searching in Google is much less compared to Bing. Also, the instant effect on
the cost of paid searches in the search engines was used to be higher than the competitors. But
then recently the pricing strategy has been revised by Google and has become moderate as
compared to its competitors which have given the company with competitive advantage. The
prevalent market of the Google search has continued to observe modification in trends and styles
because of the expansion in the market of internet user and their diversified needs. The strategic
direction has been considered as product development and market penetration along with
diversification in the market (Rushdi & Kamal, 2014).