Google’s Internal and External Environments
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May 17, 2020
Google’s Internal and External Environments
Introduction
Google Inc. is an American based technology company that was founded in 1998 as an online search engine. Its founders are Sergey Brin and Page Larry. Its headquarters are in California, Mountain View, to be specific. Since then, the company has continued to grow, and it now controls over 70% of the search requests globally (Langville & Meyer, 2011). The firm has diversified its products and services to include other platforms like YouTube, Google Maps, Gmail, Google Earth, Google Nexus, and Google Drive. It also offers advertisement services, search tools, statistical tools, and other web-based services and products. Google’s growth trajectory has not been without challenges. It has faced competition from other firms and other factors in the general environment, as discussed below.
Segments of the general environment with the biggest influence on Google
Among the external factors, the political environment has a significant influence on the growth and operations of Google company. The political climate relates to government stability across nations since Google is a multinational enterprise. Political tranquility allows the company to expand its services to new markets. Stability in countries creates a conducive environment for businesses to thrive, and that becomes an opportunity for Google through advertisements. The other political aspect affecting Google is the issue of political censorship. The company has been accused of censoring pro-democracy messages in China under the direction of the government (Google, 2020). That presents a challenge to Google in China and other similar nations. Therefore, the political environment has a lot of influence on Google’s operations and success.
The socio-cultural environment has continued to influence how Google operates and the strategies it lays down to stay competitive. The change in lifestyles affects how people use the internet and the means they use to access it. Over recent years, there has been an increase in mobile phones’ use, a significant shift from the use of computers and desktops. Such change forces Google to modify its advertisements to suit mobile ads. Besides, other platforms like Facebook and WhatsApp have come up to challenge Google’s dominance in the industry. People can now use these platforms to search and share information hence affecting Google’s market.
The Two Forces of Competition Significant to Google
Among the critical forces of competition, threatening Google is competition in the technology industry. Google faces substantial competition from other technology companies such as Bing from Microsoft, LinkedIn, Yellow Pages, Facebook, Amazon, Twitter, Baidu, among others, that have risen as alternative sources of information and advertisement platforms. Besides, Google faces the threat of new entrants who threaten its dominance in the advertisement industry and as an information search engine (Chappelow, 2020). Due to the advancement and innovation in the technology industry, new social platforms keep coming up, and some businesses shift their advertisement to those platforms hence denying Google income. Therefore, among the five forces of competition, competition within the industry, and threats of new firms entering the market are the most significant to Google. To address, the company has taken various steps to counter the challenges posed by the above two forces. For instance, it has tried to reduce competition by acquiring many of the competing platforms entering the market. It has diversified operations by delving into non-Ad businesses such as cloud computing and research. Such moves have ensured its revenues remain stable
What Google might Do to Improve its Ability to Address the Above forces of Competition
To address the challenge of competition and threats by new entrants into the market, I think Google will likely try to diversify its products beyond advertisements and being a search engine. To maintain its income level, it is probably going to find new platforms and markets to venture in. Such moves are evident in its recent actions, where it acquired new platforms such as YouTube (Google, 2020). Such a platform offers a new stream of income to the company and helps it remain competitive in the technology industry. Besides, I think Google will purchase and acquire many of its competitors of any new entrants into the market. It is also likely to expand its Cloud services and make it among the key business pillars. Such moves will ensure it remains a dominant player in the industry.
External Threats and Opportunities Available to Google
Among the threats facing Google is completion from other firms in the industry such as Amazon, Yahoo, Apple, among others. It also faces the risk of increased social media platforms in which businesses have turned to for advertisement. It also faces the threat of lawsuits over copyright issues on its innovations. However, the company has excellent opportunities for growth and expansion (Kuntze & Matulich, 2010). These opportunities include the growing use of internet services and the need for online advertisement, the chance to grow its Cloud services, and the chance to invest in other areas besides advertisement. The greatest threat to Google is competition, and it should solve that by buying off many of its competitors since the firm has vast resources. It should also continue to innovate and upgrade so that it remains competitive. Its most significant opportunity is the increasing growth of internet usage across the globe. It should take that opportunity to create new products and platforms to serve the growing market.
Google’s Strengths and Weaknesses
Google’s greatest strength is its dominance in the technology industry and especially the search engine. It also enjoys the benefit of being a first-mover in many of the products in the market. Besides, the firm rides on the culture of invention and innovation, which has enabled it to develop new products frequently. Also, the company has a dominant control in mobile operating systems. All these strengths keep the company competitive.
On the other hand, the firm has several weaknesses. Among those is its code of conduct that allows it to share confidential information with outsiders. That has caused a lot of uproars and reduced public confidence. Besides, it encounters high employee turnover rates. Such employees join competitors and disclose Google’s strategies and business tactics (Kuntze & Matulich, 2010). Its greatest strength is the dominance in the industry, while the most significant weakness is the sharing of confidential information. To maximize its power, the firm should invest more in innovation to develop products that meet the market needs. To address the weakness of sharing confidential company information, it should change such a policy or relocate from markets that have such regulations.
Company’s Resources, Capabilities, and Core competencies
The Google company, a subsidiary of the Alphabet Inc. company, is one of the most valuable firms globally. In January 2020, the Alphabet company became the fourth firm to hit a market value of over $1 trillion. As of March 2020, Google had recorded a revenue worth $161.9 billion and a net income of $34.3 billion. It is among the four biggest technology firms globally (Copeland, 2020). The company’s financial capabilities have been growing over the years, and that is manifested in its ability to buy and acquire various competitors. Its core competencies are advertising, offering search services, and driving innovation in the technology world.
References
Chappelow, J. (2020). “Porter’s Five Forces.” Investopedia. https://www.investopedia.com/terms/p/porter.asp
Copeland, R. (April 28, 2020). “Google revenue climbs, but the company warns of ‘tale of two quarters.” The Wall Street Journal. https://www.wsj.com/articles/google-revenues-climb-in-encouraging-sign-for-big-tech-11588105574
Google. (2020). “More about us.” https://about.google/intl/en-GB/products/
Kuntze, R. & Matulich, E. (2010). “Google: Searching for value.” Journal of Case Research in Business and Economics. https://www.researchgate.net/publication/303244552_Google_Searching_for_value
Langville, A. N., & Meyer, C. D. (2011). Google’s PageRank and Beyond: The science of search engine rankings. Princeton university press.