ALPHABET INC.
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Alphabet Inc
Company Name, Mission Statement, and Key Leaders
Alphabet is a multinational company that was formed after a restructuring of Google and its subsidiary. It is an American company whose headquarters are in Mountain View, California. After Google failed to breakeven, Alphabet Inc bought and became the parent company of Google and some of Google’s subsidiaries.[1]. Alphabet Inc was ranked fourth-largest company by Forbes’s revenue in 2019 and among the most valuable companies worldwide. Alphabet Inc aimed to make Google’s business profitable and more accountable by relishing the subsidiaries operate in other companies other than providing internet services.
Alphabet’s mission statement “Make the world Around you more universally accessible and useful.” As an information-sharing company with subsidiaries offering internet services, Alphabet shares information through technology. By not limiting the subsidiaries to internet-providing services only, Alphabet indicates that it aims to explore various ways companies can innovatively use technology to provide services to the people. Innovation creates and allows companies to serve people differently and efficiently according to the technology they have.
The founders of Alphabet Inc are Larry Page and Sergey Brin.[2]. They were also the co-founders in Google and remained the controlling shareholders, board members, and Alphabet employees. They both resigned from their executive posts in 2019. The CEO of Google, Sundar Pichai, filled the position.
Company History and Timeline
As stated earlier, Aphabet Inc came into place after the restructuring of Google. Some of Google subsidiaries brought on board to provide other technology-related services other than internet services. Alphabet Inc was established in 2015 when Google Inc reported its plan to develop a new public traded company. It aimed to move some of the google subsidiaries to Alphabet, reducing Google’s scope[3]. Alphabet Inc will include Google and the following subsidiaries: CapitalG, Nets, Verily, Makani, Calico, X Development. Google narrowed down to companies providing internet while other companies with afar internet products contained in Alphabet. It was necessary to scale down management and allow the running of businesses that are not related independently.
Larry Page documents that reorganization made the business in Google cleaner and more accountable by enhancing oversight and transparency of operations. The reorganization has worked for the company as Alphabet Inc has become the fourth most high revenue-generating technology company globally. It enabled the company to create efficiency among the subsidiaries and allowing the companies offering internet services to remain with Google while the rest moved to Alphabet.
History of Ethical Decision Making and Social Responsibility
Alphabet Inc plays an important role in the ethical platform by building products that will leave people, the planet, and the world communities better than they found them. The improvement and empowerment of the people through the sustainability of products that meet the customer is Alphabet’s continuous endeavor. Alphabet has a consultative process through the product development process while deciding the products to release in the market that will improve the mode of business and improve the welfare of the people using the products.
Before restructuring, Google Inc was also involved in corporate responsibility by empowering young people through sponsorship for technological studies that would hire them. Alphabet Inc has licensed individuals, businesses, government, and non-profit organizations in addressing challenges posed by climatic changes using Google technology[4].
Alphabet Inc, through Google, has created a sustainable workplace that is conducive to people and the environment. Focusing on end-user needs while making the products also focuses on their employees’ workplace and ensures it is healthiest as possible. Such ethical actions ensure the product remains competitive in the market and employee’s welfare is protected.
History of Lack of Ethical Decision Making and Social Responsibility
In business, sometimes entities find themselves served with lawsuits for violating their employee’s or consumers’ rights. Alphabet has in recent years found itself in such a position. In October 2018, Alphabet Inc was sued due to data being exposed in a “non-public” Google+ account[5]. The lawsuits state Alphabet did not protect the user’s privacy of information when they granted the developer a privacy bug that allowed gain access to the private data. Litigation was settled at $7.5 million[6]. Such breach of consumer privacy is likely to lead to huge losses particularly to companies, particularly if it falls in competitors’ hands.
In December 2020, a lawsuit was served to Alphabet by National Labour Relations Board for unlawfully questioning employees who worked at Google. The employees were fired later, with Alphabet claiming the respective employees were unionizing other employees and protesting them. The board also stated the employees were placed on administrative leave in retribution. However, Alphabet Inc has denied the allegations, claiming there was no wrongdoing and the matter is still in court. Such ethical issues influence the company’s reputation and cost firms sums of money if found guilty.
Marketing and Distribution Strategies
Alphabet applies a marketing strategy that involves a marketing mix focusing on a product that provides a solution to customers. Through pricing, the company evaluates the value of the product to the customers. Alphabet sets the list of prices, credit terms, payment period, and discounts awarded to customers. Promotion is a key element in marketing strategy. It creates a product or changes and advancement of its existing development through radio, television, and print advertising[7]. These factors should be strategically appealing to the consumers. Consumer analysis is a critical step in developing the product needed. Therefore, understanding the customers’ attitude and enabling the company to anticipate the revenue to be generated and a life span of a product in the market.
Distribution strategies enable the firm to determine how the products will reach the consumer. The distribution process is a key decision that should be made during the development plan. The company decides whether the consumer will access the product through its channels or distribution partner channels, whether direct or indirect, or type of distribution to be used, including traditional brick and mortar distribution network, online distribution, or both. Since customers prefer to convince, the channels should be to meet this standard.
Operational and Strategic Planning
Alphabet Inc operates as a holding company with Google as the major company. It also has other small companies that were Google subsidiaries. The main activity is advertising. Online advertising has helped to grow businesses through different brands. Due to existing competition rising from Microsoft, Amazon, and Facebook, all online companies, Alphabet, require a strategic plan to maintain its revenue flow while reducing the operational expense incurred[8]. Alphabet Inc took subsidiaries that were not providing internet services from Google. By doing so, management would become easier due to a related company working under one line of operations. Reduction in prices occurs when a company’s efficiency is promoted by allowing companies offering services to operate under one line.
Alphabet Inc has experienced rapid growth through its strategic planning and remarked innovations that have been marked as one strong upcoming technology company with the potential to change the world through technology. Android and Google Maps have become a necessity, and such innovation helps the company’s revenue grow exponentially.
SWOT Analysis
Strength: Brand recognition is a major strength for Alphabet Inc due to the variety of offered products. The products include Google search engine, chrome, and Adsense, Google maps, among others[9]. Innovation has been a continuous process for Alphabet and has continually being rewarded. The research and development division covers 15% of the cover’s revenue, with no other company in the industry matching the numbers[10]. Financial strengths have been a major stride to finance its projects, generating a net income of over forty billion dollars in 2020[11].
Weaknesses: Alphabet entered a cellphone market with Pixel smartphones. However, it experienced competition from other brands such as Samsung, Apple, Oppo, etc., with the brands dominating the smartphone industry. Alphabet has been unable to take a leading position in the cloud industry held by amazon, salesforce. Com and IBM. Its focus on innovation to move to the cloud industry has been made difficult by competitors. Privacy legal issues have seen Alphabet served with lawsuits in the recent past. EU has also taken strictest measures on Google to avoid the problems of data.
Opportunities: Diversification will help Alphabet into new areas of technology that will create faster growth. The field of technology has a great growth potential when explored since technology changes rapidly. Alphabet Inc can also focus on acquiring other technology companies with the potential to grow or have a synergy effect. There are great opportunities for innovation in AL and cloud business. Such design will foster strong growth and compete with other bigger companies.
Threats: Competition threat in the technology industry grows every day as other companies expand in the territory. Microsoft, Facebook, Apple are all concentrating on innovation by investing heavily in research and development. Legal issues ad regulatory pressures have been a challenge that Alphabet Inc has been facing and must address. It has cost millions of dollars in compensation.
Financial Outlook Next 5 Years
Alphabet Inc has experienced rapid growth in revenue for the last five years, with net income rising from $12.662 billion in 2017 to $40.269 billion in 2020[12]. In 2020, Alphabet was ranked fourth in revenue income globally at $182.527 billion[13]. However, its investment in research and development takes 15% of revenue generated, the highest in the technology industry[14]. Alphabet Inc has estimated its revenue will be 226.5B in 2021, while in 2022, it estimates it to be 264.37B with a growth of 24.1% and 16.7%, respectively[15]. Revenue outlook for the next five years in a graph will be as follows:
Global Presence and Standing
Alphabet is a multinational company with its global market expanding rapidly. Through the products offered to consumers, such as Google services, it has become a household name to billions of people. Google search engine chrome has become the most used product. Google, the search engine may dominate for the next hundred years as it is effective to its users. It has continued to generate and funding its research and development division in revenue income than any other technology company in the world.
In the next 5-7 years, Alphabet Inc is likely to be rival other companies such as Amazon and IBM, which dominate in the cloud. Through innovation, Google may be able to defeat the market over other products that rival it. Products such as Android will rival other software as Alphabet continues to invest in innovation and advancement.
Bibliography
Bibliography
[1] Dougherty, Conor. 2015. “Google To Reorganize As Alphabet To Keep Its Lead As An Innovator (Published 2015)”. Nytimes.Com. https://www.nytimes.com/2015/08/11/technology/google-alphabet-restructuring.html.
[2] Dougherty, Conor. 2015.
[3] Dougherty, Conor. 2015.
[4] Chalkidis, Georgios. “Alphabet inc-internet/advertising.” PhD diss., 2019.
[5] “Docket For In Re Google Plus Profile Litigation, 5:18-Cv-06164 – Courtlistener.Com”. 2021. Courtlistener. https://web.archive.org/web/20200806003928/https://www.courtlistener.com/docket/7999009/in-re-google-plus-profile-litigation/
[6] Docket For In Re Google Plus Profile Litigation, 5:18-Cv-06164
[7] 3. Chalkidis, Georgios,p.19
[8] Chalkidis, Georgios,p.20
[9] Chalkidis, Georgios,p.21
[10] Bilić, Paško. “A critique of the political economy of algorithms: A brief history of Google’s technological rationality.” TripleC: Communication, Capitalism & Critique. Open Access Journal for a Global Sustainable Information Society 16, no. 1 (2018): 315-331.
[11] Alphabet Announces Fourth Quarter And Fiscal Year 2019 Results. 2019. Ebook. https://abc.xyz/investor/static/pdf/2019Q4_alphabet_earnings_release.pdf?cache=adc3b38.
[12] Alphabet Announces Fourth Quarter And Fiscal Year 2019 Results. 2019. Ebook. https://abc.xyz/investor/static/pdf/2019Q4_alphabet_earnings_release.pdf?cache=adc3b38.
[13] Alphabet Announces Fourth Quarter And Fiscal Year 2019 Results. 2019. Ebook. https://abc.xyz/investor/static/pdf/2019Q4_alphabet_earnings_release.pdf?cache=adc3b38.
[14] Ragas, Matthew W., and Ron Culp. “Financial Statements and Valuation Essentials.” In Business Acumen for Strategic Communicators: A Primer. Emerald Publishing Limited, 2021
[15] Rocha, Mariana. “Corporate credit report of alphabet inc.” PhD diss., 2017.