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Google was founded in 1998 as a search engine called BackRub created by Larry Page and Sergey Brin as graduate students. It incorporated as Google in 1998 and has since grown rapidly through innovations and acquisitions to become the dominant search engine with over 84% market share globally. Google's core competencies are its unique culture that fosters innovation, its search and advertising technologies, and brand.
- 2. Brief History • Began in in 1996 when Larry Page and Sergey Brin, Stanford University graduate students, started a search engine called “BackRub” • Worked out the kinks in a garage • In 1998 they became the incorporation that is now known as Google. • In 1998, Sun co-founder, Andy Bechtolsheim wrote Google a check for $100,000 to help kick start the entity. • In 1999 Google already outgrew their garage office. • By 2000, Google started catering to other people in the world and released 10 language variations • The next 9 years brings rapid growth achieving many great milestones. • Currently have their headquarters in California, 20 other locations in the US and 55 throughout the world with over 20,000 employees , 94 subsidiaries, 84.77% market share and 2010 revenue of $8.44 billion. • Classified as an Information Retrieval Service.
- 3. Products & Services • Search (Image, Books, Scholar, • Development (Android, App Video, Photos) Engine, Open Social) • Desktop • Mapping (City Tours, Google Maps, • Stand alone applications (Chrome, Google Earth, Gmail, Picassa) Sky Map, Transit) • Extensions (Toolbar, Dashboard Widgets for Mac, Blogger Web • Statistics (Analytics, Insights, Comments) Trends) • Mobile • Other (Health, Labs) • Online (Calendar, Buzz, News) • Downloadable (sync, Voice, Goggles) • Hardware (Google Mini, Nexus One) • Web • Account Management (dashboard) • Services (Google Crisis Response, • Advertising (Adsense, Adwords) Google Public DNS) • Communication and Publishing (Apps, Blogger, Docs)
- 4. A Look into the Industry • Power of Suppliers- Weak • Google has 84.77% of the market making them very powerful • They can negotiate the terms of a relationship easily • Power of Customers- Weak • 97% of Google’s revenue comes from ads • Google’s market share of 84.77% means very high visibility with ads • If they went to Bing the market share is only 3.89% meaning lower visibility • Rivals- Moderate • Microsoft’s Bing, Facebook, Apple, Yahoo
- 5. A Look into the Industry • Threat of New Entrants- Low • Google has 84.77% of the market • The next largest market share is held by Yahoo representing only 5.69% • Importance of creating new technologies • Large amount of money for R&D • Threat of Substitutes- Weak • Price sensitive? • Search engines are free • Money comes in with advertising: people could advertise elsewhere but won’t see as much traffic • More easily available? • With Google’s huge market share, can be argued that it is harder for customer’s target market to access information the customer is trying to advertise
- 6. Google’s Competencies • Core Competencies/Competitive Advantage • Unique company culture • Offices • 20% time • Innovative minds • Distinctive Competencies • Search • Ads • Apps
- 7. Google’s Capabilities • Internal Processes and Systems • Responsiveness • Over 20 Twitter handles • About 15 Facebook pages • Relationships • Employees: $1000 bonus and 10% pay raise for 2011 • Customers: always focused on giving consumers what they want. • Google succeeds when the consumers are happy • Service quality • Focus on designing, developing and delivering services that meet and exceed user’s expectations
- 8. Key Resources • Tangible • Intangible • Technologies • Brand • PidgeonRank • #1 brand in 2010 by The • Google Analytics Consumerist • Android OS • Intellectual Capital • Google Chrome • Googlers • Financial resources • HR • Gross Profit Margin: 64.47% • Hire based on intelligence and innovation • Operating profit Margin: 35.40% • Net Profit Margin: 29% • Receivable Turnover: 53 • Asset Turnover: 51% • Return on Equity: 18.3%
- 9. Knowledge Based View • Google looks for tacit knowledge – employees minds and skill sets • When hiring Google looks for knowledge rather than experience • This means that “googlers” are very diverse allowing for different backgrounds to work together and to bounce ideas around to reach unique ideas • Google works hard to keep employees happy • Rock walls • Pool tables • Comfy chairs • Snack rooms • Gym • Additional benefits: 10% raise and $1,000 bonus for 2011
- 10. Dynamic & Disruptive Technologies • Google works very hard at being at the forefront of innovation giving consumers what they want and creating needs for them • Dynamic – Google anticipates shifts in market and pays attention to oncoming trends • Social trend with Facebook, Twitter, LinkedIn etc. so they created social search • Disruptive – Google tries to “disrupt” the market by introducing innovative products and services • How they introduced fast and relevant search through their search algorithm • Continue to revolutionize the way people search by introducing things like real-time and social search
- 11. SWOT Analysis • Strengths • Opportunities • Strong brand name • Using higher value content on • Reliable, accurate & fast the web searches • Localized searches • Offers many products and • Create more services for the services growing smartphone market • Intelligent & innovative • New acquisitions employees • Constantly innovating & creating • Threats a need for it’s products and • Lose control over indexing policy services • Competition from yahoo and Bing • Weaknesses • Potential privacy lawsuits • Main source of revenue is advertising • Can lose it’s easy to use interface • Spammers take advantage of Google’s ranking technology • Too much integration with other companies can taint their brand • Lack of presence in social- name networking • Products & services very heterogeneous
- 12. Recommendations • Find other sources of revenue • Tighten security measures on their search algorithm to prevent spammers • Delve deeper into the social networking world • Pay more attention to privacy issues • Don’t lose site of core competencies and always keep the consumer in mind offering easy-to-use interfaces for all services