UB:

UnderstandingStrategicManagement
IndividualAssignment
GoogleInc.Stratagy
WordCount1416


Strategyisthelongtermdirectionofanorganisation(Johnstonetal,2011).Basedonthisquote,I
amgoingtolookintoGoogleInc.Strategy,includingstrengths,weaknesses,opportunitiesand
threats,suggestingapotentialpathforthefutureandhowtheymayusecertainstrategic
managementskillstodevelopalongthatpath.

SWOTAnalysis

Strengths
Easyuseforcustomers
Availability
Productintegration
Innovative
Highlyprofitable
Productsuitseveryonesneeds
Internationalbrand

Weaknesses
Reliantononesourceofincome
Productsaddlittlevalue
Ofteninvolvedinlitigations

Opportunities
Increasingnumberofusersoninternet
eachday
Hasmoneytopurchasepatents
allowingbetterservice
FurtherverticalintegrationFibrecable
internet
SocialnetworkingGoogle+

Threats
Moremobileuselessspaceto
advertise
EUantitrustlaws
CompetitionFacebook,Microsoft

Strengths
Googleisknownforitseasyuse,withsimplesettingsallowingtheendusertoaccessinformation
easily.Googleisalsoveryeasilyavailableandsoarealltheirproductsi.e.mapsandcalendars.Not
onlyarealltheseproductseasilyavailablebuttheyareallintegratedwhichislinkedtoeaseofuse
andalsotomynextpointinwhichGoogleproductssuiteveryonesneeds.Googlehavean
innovativeteam,bringingoutuniqueproductseachyear.AlloftheabovecombinedallowsGoogle
Inc.Toenjoy$11billionprofitlastyear.
Weaknesses
AlthoughadvertisingforGooglebringsinavastamountofprofit,itiscloseto90%oftheiroiverall
takings.Withcertainaspectssuchasmobilephones,whichprovedifficulttoadvertiseonwithsuch
littlespacetodoso,advertisingmaynotbeasafebetforthefuture.Googlealsooffersmanyfree

products,inwhichaddlittlevaluetothecompanybymakinglosses.Googlealsooftenfindsitselfin
litigationbattlesoverpatentsitmayhavebreached.Thiscostsvaluablemoneyandtimetothe
company.
Opportunities
Therearemoreandmoreinternetuserseachday,allowinganincreasedmarkettoofferproducts,
andadvertisetoo.Googleswealth,allowsforthemtoacquirepatentsfromcompanies,givingthem
moreinformationtouse.Forexample,GoogleboughtMotorolain2012,acquiring17,000patents.
Googlealsohavethetechnologyandmoneytoverticallyintegratefurtherbyintroducingtheirown
InternetFibreCables,provingsuperfastinternettotheircustomersonly.Googlehavealreadyshown
interestinsocialnetworkingwithGoogle+,andcancontinuethisfurther,usingitasaplatformfor
themtoadvertise.Googlehasmassiveopportunitiestofurtherlinkalltheirproducts,providingtheir
customerswithbetterproducts,and,boostingtheirmarketshareandprofits.
Threats
Asdiscussedbefore,thereisagrowinguseofmobileinternet,limitingtheopportunitytoadvertise
andIhavealsotouchedonthefactthatGoogleoffersunprofitableproducts.Googlearefacing
antitrustlawsuitsforadvertisingtheirproductsfurtherupthelistthanrivalcompetitors,thiscould
beverydamagingforGoogleInc.Googlealsohastofaceuptocompetitioninareasoradvertising,
suchasFacebookandininternetsearchedfromMicrosoft,whohaveintroducednewproducts
themselvessuchasWindows8.

IhaveconstructedaPESTLEanalysisonGoogleInctoshowtheexternal/environmentalfactorsthat
mayaffectGooglestrengthinthemarket.
PoliticalGoogleIncdonotreceiveanygovernmentsupport,potentiallybecauseoftheiralready
massiverevenue,butpotentiallybecauseoftheongoingbattlebetweenthegovernmentand
GoogleIncoverissuesrelatedtoprivacyandthedatainwhichGoogleInchold.Googleshouldseek
supportfromthegovernmentandonewayofdoingsuchistoofferthemsupport.Googlealready
offerthegovernmentsAppsandsurveillance,thiscouldbethewaytogainassistance.GoogleInc,
withtheaforementionedhugerevenue,succumbstolargetaxationbills.Recentlytheyhavebecome
embroiledinarigorousdebateregardingtheirutilisationofataxmanipulationtechniqueknownas
theDoubleIrish.Asaresultofthistechnique,GoogleInchasbeenreportedtodrasticallyreducing
theirtaxesfromprofitsby$3.1million(Drucker,2010).Currently,outofthetop5companiesinthe
US,Googleinpaystheleastamountoftax,throughoffshoreaccountsandtaxavoidingsystems.
Thisisethicallywrongandinthecurrentclimate,IfeelthismaygiveGoogleIncabadreputation,
leavingcustomersdeterredtouseGoogleIncproducts.
EconomicWiththeEconomyatthepresentshowingitshighestinterestrates,itmayslowthe
investmentgrowthconsiderably.Lookingbacktothecurrentclimatesituation,itisalsogoingto
affecttherevenuefromproductsbought.Thismaybethetimetoinvestinmorefreeappsandmore
advertisement.GoogleIncwillalsohavetoexchangecurrencywhichhasthepotentialtoaffect
capital,revenuesandprofit.TheclashbetweenGoogleandtheChinesegovernment,alongwith
theongoingvulnerabilityofintellectualpropertyrightsandcontinuingrestrictionsonforeign

ownershipinChina(Tse,2010).This,haslargelymadeGoogleinChinainaccessibleduetoChinas
strictpolicies,thiswillaffectGooglesrevenuesfromChinaandisalsoapotentialupsetasother
countriesmayfollowsuit,reducingGooglesmarketshare.
SocialGoogleofferproductsthataredirectlylinkedwithsocialnetworkingandcommunication.
Thisisagreatlinktohaveasmoreandmorepeopleareusingtheinternettokeepintouch.Notonly
areindividualusersfindinganeedforGooglebutalsolargecompanieswilluseGoogleIncproducts
intheirbusiness.Moreandmoreusersarelookingontheinterneteachday,evenwithanageing
populationinthewestthenumbersofusersstillgrows.
TechnologiesTechnologicalinfluencesmaybethatinternetprovidersaregrowingrapidlyaround
theworld,offeringbetterservices.ThisissomethingthatGoogleIncneedstotakeinto
considerationandaimatdiversifyingtheirproductrangetoprovidingtheinternet,creating
verticallyintegratedproducts.Googlehavesomeextremelyinnovativedesigners,productsand
plansforthefuture.Itissaidthatstaffspenduptop20%oftheirtime,designingnewproducts,
testingthemanddiscardingtheonestheydonotlike.Afocusondifferentiationisagreatwaytogo
forGoogleastheyarenotinafullymonopolisedmarketandwhentheybringanewproductout,it
isnotlongbeforesomeonecopiestheidea.Strongerpatentsandtrademarksmayhelpcombatthis.
EnvironmentalGooglearearelativelyGreenasof2007whentheybecamecarbonneutral
throughconcernsovertheirenvironmentalprotectionconcerns.ThroughGoogleIncinputtingnew
dataserversandsolarpowerenergy.
LegalWithofficesin60countries,Googlehastoabidebymanydifferentcountrieslegislationso
fromanoperationalviewthelegaldepartmentwillbeaverylargeandintricatepartoftheGoogle
Corporation.Especiallyensuringthateachlawineachcountryisadheredtoandnotbrokendueto
confusionbetweendifferentcountriesetc.Inchinathereisnotoleranceforspyinginformationand
thewaythatGoogleIncretrievestheirinformationisunethical.Thisisoneofthereasonsthat
GoogleisalmostnonexistentinChina.

Conclusion
Ibelieveoutoftheweaknesses,GoogleInc.ShouldfocusoftheirBusinessLevelStrategybyfocusing
onhowtheyaregoingtocompeteagainstthelikesofFacebookandMicrosoft.Iwouldcontinue
withthedifferentiationoftheirproductsgainingmarketsharefromofferingdifferentproductsto
anyotherbusiness,leavingthemtocatchup.Iwouldalsoinvestincopyrightsandpatentstoensure
noonecancopyyourproductthatyouhavespenttimeandmoneycreating.IbelieveGoogleIncis
inagreatpositionwithitscustomersanddontfeelasthoughyourtaxavoidingschemeswill
damagethecompanymorethanthemoneyyousave.ItiscleartoseethatGoogleIncisinasafe
placeatthemomentwithaprofitof$11billionlastyear,however,itwouldbeunwisetoreston
yourlaurelsandactnowtomakeGooglebiggerandbetterthanever.

References
GerryJohnston(2011).ExploringStrategy.9thed.Essex:PearsonsEducationLimited.3.
Jesse Drucker. (2010). Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes.
Available: http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how60-billion-u-s-revenue-lost-to-tax-loopholes.html. Last accessed 5th May 2013.

Tse,E.(2010)IsittolatetoenterChina?HarvardBusinessReview.88(4),96101