Strategic Position Of The Google Corporation Commerce Essay Example

Porter's principle of "the bargaining power of suppliers" as they required skilled programmers and high-tech computer components for their monolithic database and advanced algorithms based on artificial intelligence (AI). Fortunately for Google, there was an abundance of these resources available which limited suppliers' bargaining power. Furthermore,

Market and Financial Position

Google had easy access to necessary capital through venture capitalists in California. In 2007, around 50% of the top 100 venture capital firms in the United States were located in Silicon Valley (Girard, 2009), providing Google with a geographical advantage for funding access.When Google went public in 2004, they chose a different approach called OpenIPO. Similar to a Dutch auction, this strategy allowed investors to bid on shares at their perceived fair price. Unlike traditional Wall Street IPOs where bankers can manipulate the system, all winning bids in an OpenIPO pay the same amount regardless of higher bids. This unique method gave Google credibility and favorable public sentiment right from the start.

Before Google became a strong competitor in the internet search market, dominant players included Magellan, InfoSeek, AltaVista, Yahoo, Inktomi, and Northern Light. However, starting in 2000, Google gained traction due to its distinctive technology and simple homepage design [5]. By 2002, Google surpassed Yahoo and MSN with a slight lead in market share (29.2%[6]). In May 2003, Google's global search engine market share reached 55%, while Yahoo lagged behind at 21.7%[6]. Even though Microsoft has made gains through Bing and its partnership with Yahoo, as of March 2011 google still holds about two-thirds of the search engine market (Parr ,2011).

Thanks to their advertising revenues, Google currently has a remarkably strong financial position. According to unaudited reports

from $86 million in 2001 to over $29 billion in gross income for them by year-end of December month.
Google's advertising revenue in 2010 amounted to $28 billion [7], showcasing its remarkable success and profitability compared to struggling dot-com companies post-2000s. While their net profit was a mere seven million dollars with earnings of four cents per share in 2001 [8], Google's financial triumph is evident as their net profit reached eight and a half billion dollars with earnings per share of 26 dollars [8]. In the tech industry, Google surpasses its closest rivals Yahoo and Baidu, grossing 23 billion and 28 billion dollars more than them respectively [9]. A significant factor contributing to Google's triumph is its commitment to research and development, investing $3.7 billion while Yahoo allocates $1 billion (up from $200 million in 2009) for product development, and Baidu devotes just over $700 million for research and development [9] (Google investor relations, n.d.). Differentiating itself from other organizations, Google implements the "20 percent rule" which allows employees to dedicate 20 percent of their time towards research and creativity instead of solely focusing on specific projects (Girard, 2009).Google recognizes the importance of staying connected to competitors' activities in order to effectively respond to market demands, aligning with Sun Tzu's principle of "Deception and Foreknowledge, Maximizing the Power of Market Information" (McNeilly, 1996) [10]. This connection is particularly crucial in the field of information technology, where dynamism is inherent. Google distinguishes itself from its counterparts by establishing external connections for fresh ideas and innovations, as stated by Bernard Girard (2009). To achieve this, they establish networks within the Silicon Valley region and encourage employees to

maintain ties with their alma maters and university students. These strategies contribute significantly to Google's strengths as a large corporation that thrives on current technology and innovation (Girard, 2009). Founded in 1998 by Larry Page and Sergey Brin, Google is led by dynamic leaders who consistently drive the company forward. With a strong financial position, Google can invest in new technologies, overcome legal challenges, and introduce fresh services. The majority of Google's revenue comes from advertisements, setting it apart from competitors when it first launched.Google introduced the cost-per-click system, which allowed advertisers to determine the value of their ads and resulted in mathematically calculated search rankings. This innovation made it visually easier for advertisers to track marketing effectiveness. According to Porter's concept of industry competition, Google became a utility product by providing companies with a fair way to assess ad value and effectiveness on various media platforms, including online ones. This information became crucial for marketers and offered a superior opportunity compared to blind ads. Furthermore, Google's algorithmic approach incorporates artificial intelligence and word content relevance, setting it apart from other search engines. The strategy can be seen as "avoiding strength and attacking failing". Instead of following traditional methods, Google created a unique system that revolutionized internet searching today. However, like any organization, there are vulnerabilities such as the potential loss of key members like executive management and software engineers. The IT market is highly competitive and relies on scientific and mathematical talent that may not be readily available compared to other fields. Employees involved in product development might choose better opportunities elsewhere or start their own tech companies.Furthermore, Google's significant growth could be seen

as a weakness due to the attraction it holds for other companies seeking to gain a share of its dominant market position. One such example is Microsoft's Bing Maps, which directly competes with Google Earth, demonstrating the threat posed by rival products and services. Additionally, new entrants in the information technology industry present challenges for Google as they attempt to capitalize on their successes.

Wolfram|Alpha, renowned for Mathematica, has developed an innovative computational cognition search based on natural language communication and algorithms similar to those employed by Google. This development directly competes with Google's search engine market. Innovation, collaboration, and creativity are prioritized by Google in the realm of technology.

Google possesses a robust software platform consisting of around 450,000 personal computers for their data house. Their enterprise-wide application known as Moma provides comprehensive statistics on their operations and research and development activities. With these technological resources at hand, Google is well-prepared to compete with other companies.

Significant advancements made by Google include their fast web browser Chrome, widely-used Android Mobile operating system, and popular Gmail service. Gmail utilizes cloud technology to offer ample free storage and has gained popularity within today's email systems.Google is aiming to compete directly with Microsoft by offering a range of computer applications for personal and workstation use through their cloud technology infrastructure. An example of this is the development of Google Chrome OS, which is designed specifically for computers made by Google's partners. In addition to expanding into new areas like renewable energy investment through their subsidiary Google Energy, they have also invested in a wind project in North Dakota. Furthermore, Google is exploring opportunities in the broadband service market and has

an agreement to install their high-speed fiber optic system that provides speeds up to 100 times faster than traditional broadband. They are currently beta testing a free internet radio service called Google TiSP. On an international scale, large corporations face challenges related to their role in the global community and can be limited by anti-monopoly laws. Google had its own difficulties when it clashed with China's censorship policies due to conflicts with its values and approach. Despite trying to avoid it, they had no choice but to comply with Chinese government data regulations. This clash of values even affected Google's policy of allowing employees to spend 20% of their time on independent ventures, which was not well-received in Chinese culture.Corporations not only face different laws but also cultural differences that impact their operations. For Google, improving market share is a challenge as they compete against themselves within their own industry. They expand in various directions to gain more market share and enter new markets, utilizing their resources and capabilities. With these assets, they can even enter the rural areas' ultra high-speed broadband services market. Additionally, Google has the potential to penetrate the smart device industry and use programming features for energy control in households.

Google's progressive management style allows them to stay connected with employees, adapt to customer demands, and embrace emerging technologies. As a response to user dissatisfaction, they introduced the Chrome web browser and improved Gmail's email storage capacity. Currently, Google meets the public's need for faster internet speeds by offering an ultra high-speed service. However, they must also consider privacy laws and antitrust regulations to maintain their leading position.

The Patriot Act requires companies

to disclose information upon request, which could negatively impact user perception and market share for Google. Furthermore, being a large growing company raises concerns about antimonopoly laws that may hinder its expansion in specific markets.Despite Google's track record of acquiring technologies through company purchases, there are concerns about potential growth limitations due to legal restrictions on monopolies. In the highly competitive IT industry, which covers a wide range of fields, it is crucial to question whether Google can maintain its own growth trajectory. The rapid expansion could result in neglecting necessary advancements and changes needed for their core services.