Summary

(Around 150 words Single space )

Introduction

Google is an American Multinational corporation which provides the world with the biggest search engine. The company was founded by Larry Page and Sergey Brin who both attended Stanford University. Google has been a really successful company for more than two decades. It went from being a simple search engine to offering a vast amount of services, such as cloud, software, and advertising networks. It has never failed to keep the innovation going and keeping up with its competitors as the technology industry is always evolving and becoming more competitive. The variety of products and services it offers in today’s world has helped the company to expand and increased the company’s wealth, but also the class of employees. As competition in the technology industry is stronger than ever, Google has always been one of the top competitors in the industry. Google has been affected by internal and external conditions, making it the company that it is today. This is based on the company's culture, employees, competitors, foreign governments and regulations.

Major Findings of the External Environment and Internal Condition of Google

Google has external environmental factors which impact the operations of the business. These are based upon the microenvironment, which consists of the factors that directly impact the general operations and the macro environment consists of general factors which the business does not have much control over. Both of these factors determine whether or not a company does well. The internal conditions of a firm are elements within the company (Google), which have an effect on the overall performance, for example, current employees, management and the overall company culture. Internally, Google is renowned for having some of the best working conditions for its employees in the world. According to Business Insider, Google is ranked as one of the five best places to work in 2018. This could be due to the installed corporate values which Google has had for many years. Firstly, “do not be evil,” which is about Google not giving itself the advantage when being the biggest search engine in the world, as Google allows its competitors high rankings. Secondly, “technology matters”-- Google has invested a lot of research and development into its search engine, resulting in high-speed search responses. Google also has even attempted to reduce costs by taking the innovative step of installing custom hardware servers inside shipping containers. Thirdly, “we make our own rules,” which indicates that Google consists of unconventional managers, who did not publicly engage in any media because they wanted to keep the search engine a secret. With these corporate values, it seems like Google is a very internally strong company, which does not follow tough rules but instead gets the work done. The Google employees are another big talking point to the internal conditions at Google. Google has adopted unconventional approaches for managing innovation. According to Harvard Business School, “Google policy encouraged engineers to spend 20% of their time working on projects of their own choosing” (page 7). By having this convenience, Google has been able to include new projects, such as Google Docs and Gmail. It introduced a 70/20/10 rule which allocated Google employees to contribute to multiple aspects of the business. 70 percent of engineering time, should be spent on the core business, 20 on projects such as Gmail and 10 new business ventures. With these internal factors, we can see Google’s strategy within the firm is based on intensive growth, market penetration, and product development. The overall strategy has led Google to have over an 80% market share within the search engine industry.

The external environment factors which have had an effect on Google are from competitors and sites which use Google’s search engine as the main aspect for its business. Google has been required to be under regulatory scrutiny over a number of issues. Companies such as TripAdvisor and Yelp criticized Google because their main purpose is receiving reviews, and Google presented a threat to their business model. The U.S Federal Trade Commission had investigated Google but did not ultimately find anything on file for its case. Governments in different countries were also concerned about Google, as it was becoming a threat to a variety of sectors. According to one observer, “Google’s ever-expanding agenda has put it on a collision course with nearly every company in the information technology industry” (Page 16). This shows that many companies within the technology industry are afraid of what Google might do. Companies such as eBay and Apple have been in question with Google with regards to its advertisements. For eBay, economists questioned Google’s AdWorks, with these questions Google responded and then suddenly the algorithmic search traffic of eBay dropped sharply. Apple also had issues with Google, due to the ios 6 not having Google Maps anymore. This surprised Google and later Apple had to reinstall Google Maps as consumers did not understand the change. Below is a graph which shows how the organizational structure and effects of handling external environments can help an exceptional organization.

Options

There are several options, each with their own potential risks and rewards, that Google should consider when strategically planning its future business model, and to assist in maintaining the brand’s current success.

1. Google could develop new products to keep up with its competition, which includes application suites like Microsoft Office, Microsoft 365, Apple iWork, and Apache OpenOffice. Microsoft’s biggest weakness is in its customer privacy and security, such as the encryption of customer information. Google could capitalize on this weakness, by working to create new applications similar to Microsoft Office, but which offer greater security for customer’s data, and better protect their privacy.

2. Google has been working on creating its own software for self-driving cars. Developing this further could put Google Inc. a step ahead of other potential competitors in the future. This market is not yet fully developed and introduced to the public, but it is surely going to be big in the next upcoming years. By creating the software that self-driving cars would use, Google could license and distribute it to self-driving car manufacturers, and establish an enormous market share in this emerging technological industry. Because Google is already a very widely known company with a great reputation, it has a greater opportunity to work with many car manufacturers.

3. Google could expand its Google Shopping feature, initially introduced in 2002, to establish a marketplace similar to Amazon or eBay. This marketplace would benefit greatly from Google’s already existing users, many of whom already begin the shopping process for online purchases with a Google search. By simplifying the price comparison and ordering processes, Google could charge merchants either a flat fee to feature their products, or a commission percentage on all orders placed through Google Shopping.

Recommendation

After careful consideration, we recommend Google invest in the research and development process for new products. Specifically, Google should seek to develop a product with the intention of increasing its competitive ability against alternative services like Microsoft Office, Microsoft 365, Apple iWork, and Apache OpenOffice. Google should specifically aim to develop products that will increase its presence in the business and education consumer markets. Setting this objective will provide both management and employees with a clear strategic goal to work towards, and assist in determining the nature of the development process. With the intention of creating applications that target business and education consumers already clearly established, Google can cater its development to this demographic. Conducting market research to determine what consumers feel their current applications lack, for example, will allow Google’s product to fulfill those needs. This recommendation is consistent with Google’s historical and ongoing operating strategy of innovative development.

Implementation

Google has an existing suite of software, aimed at businesses, called G Suite, which integrates many Google functions such as communication (Gmail, Calendar), storage (Drive), collaboration (Docs, Sheets, Slides), and administrative services together with more advanced features (email with customer domain, 24/7 phone). Google has stated that it “does not collect, scan, or use your G Suite data for advertising purposes and does not display ads in G Suite core services.” Along with this, Google provides “disaster recovery” with data and information and encryption on multiple levels (while data is stored, between data centers, and when data is in transit between data centers and users). All of these features are items that Microsoft has not offered its Office customers, including the “enterprise-grade security and compliance” used in Google Drive, Google’s main application for cloud storage. Google should leverage its advantages over Microsoft Office, along with the lower costs of its services compared to Microsoft Office 365 plans, to attract more small-businesses and universities to primarily use G Suite instead of Microsoft Office. G Suite services tend to be $8 per month less than those of Microsoft Office, and narrowing this gap will still give Google a more affordable alternative, while increasing revenues. For instance, the most common G Suite plan, G Suite Business, is $12 per month versus Microsoft’s most common plan, Office 365 Enterprise, which is $20 per month. An increase of 25% on these plans will still provide customers with better value but also increase revenue generated from G Suite customers for Google. Google can then leverage current relationships with businesses such as Uber, and schools such as Temple, Brown, and Stanford to show how successful the implementation of its software has been for its users. We think introducing college students to G Suite software and having them realize the real-world uses themselves will create future users when these students enter the workforce, and potentially enter decision-making roles at firms and in their own start-ups.