Last year, Google had strong financial metrics. According to Googles operational highlights, the company reported worldwide revenue growth and cash flow for the four quarters of 2013, making Google one of the most successful companies within its industry. Overall, Googles last years return on investment, market share, and profitability were positive (2013 Financial Tables n.d.).
Googles main focus is on the customer. Furthermore, the companys mission statement is to organize the worlds information and make it universally accessible and useful.
1.Google has been able to reflect its mission statement by making its customers a priority, always delivering excellence with its products to worldwide customers. 2.Google has been in the technology industry since 1998. Although the company was incorporated on September 4, 1998, Googles founders, Larry Page and Sergey Brin had already built a search engine (initially called BackRub) by 1996. 3.Googles main objective was to create the perfect search engine, an engine that would understand exactly what you mean and give you back exactly what you want. Nowadays, Google has not only been successful at creating this perfect search engine, but has been able to make it smarter and faster. 4.One thing Google focuses on the most is that its business operations are aligned with its strategy.
The Business Operations and Strategy team at Google is in charge of identifying and clarifying Googles strategic priorities, addressing operational challenges, and facilitating innovation. 5.In order to maintain a positive experience for its users, Google considers its policies to play an important role in the structure of the company. Googles policies are against illegal activities, malicious products, hate speech, the distribution of personal and confidential information, the access of another users account without their permission, child exploitation or child abuse, spam, ranking manipulation or relevancy, sexually explicit material, harassment and bullying, violence, impersonation or deceptive behavior; and the run of contests, sweepstakes, and promotions on Google+. 6.Google has proven to be an effective company while under the scrutiny of local and international regulations. Although Google has no control over foreign rules, the company attempts to provide accurate and genuine information within the enforced parameters. Furthermore, Googles main priority is to abide by national and international rules and regulations as much as possible (Company Overview, n.d.).
A.Board of Directors
Eleven members constitute the Board of Directors for Google Inc. The companys board of directors is comprised of a multicultural team that supports the company with their knowledge, skills, and connections. Every member, as a reward for their contribution of knowledge, skills, or connections to the company, is entitled to receive Class B shares of stock. Google is a publicly traded company. On August 18, 2004, 19,605,052 shares of Class A common stock went out for public offering on Wall Street. Googles internal members are:
1.Larry Page, CEO. Larry was the founder of the company and has been the chief executive officer since 1998. He is responsible for the day-to-day-operations, as well as leading the companys product development and technology strategy. His engineering skills are such a great contribution to the company. 2.Sergey Brin, Co-Founder. Along with Larry, Sergey Brin co-founded Google Inc. in 1998. Sergey is responsible for directing the special tasks of the company. He also served as President of Technology from 2001 to 2011. His knowledge in computer science is of a great value to the success of the company. 3.Eric E. Schmidt, Executive Chairman. Eric joined the company in 2001 and helped Google to become the great company it is now. Eric is responsible for building partnerships and expanding business relationships, and for advising the CEO on industry and policy issues. Representing the external members of the company are:
4.L. John Doerr has been a member of Googles board of directors since May 1999. Johns areas of expertise are social networks, greentech innovation, and education and economy development. 5.Diane B. Greene has acted as a member of Googles board of directors since January 2012. Dianes background is in computer science and mechanical engineering. 6.John L. Hennessy has been a member of the companys board of directors since April 2004. John has also been Googles Lead Independent Director since April 2007. Johns areas of expertise are computer science and electrical engineering. 7.Ann Mather has served as a member of the companys board of directors since November 2005. Furthermore, from 2004 to 2009, Ann was the director of a company in charge of developing and operating national commercial television channels and stations in Central and Eastern Europe.
Ann holds a Master of Arts degree from Cambridge University in England. 8.Alan R. Mulally holds a Bachelor of Science and Master of Science degrees in aeronautical and astronautical engineering, and a Masters degree in Management. Alan has been a member of Googles boards of directors since July 2014. He has also been a member of the U.S. National Academy of Engineering and a fellow of Englands Royal Academy of Engineering. 9.Paul S. Otellini has served as a member of the companys board of directors since April 2004. Paul holds a Masters degree of Business Administration and a Bachelor of Arts degree in economics. 10.K. Ram Shriram has acted as a member of Googles board of directors since September 1998.
Rams areas of expertise range from advice on how to raise venture capital, how to manage the hiring process in a corporation, how to make the right product choices and how to define and adapt the business model to changing market conditions. Ram has a Bachelor of Science degree in mathematics from the University of Madras, India. 11.The last member of Googles board of directors is Shirley M. Tilghman; she has served to the companys board of directors since October 2005. Shirley holds a Doctoral degree in biochemistry from Temple University, and a Bachelor of Science degree with honors in chemistry from Queens University (Corporate Governance, n.d.).
Googles top management is not only composed of some of the most experienced technology professionals in the industry, but of a team knowledgeable in conducting business worldwide. In fact, Googles top management team is responsible not only for the day-to-day operations, but for the companys performance during the past few years. The following six members are part of Googles Top Management team: 1.Larry Page, CEO and Co-Founder.
2.Sergey Brin, Co-Founder.
3.Eric E. Schmidt, Executive Chairman.
4.Nikesh Arora, Senior Vice President and Chief Business Officer. 5.David C. Drummond, Senior Vice President, Corporate Development and Chief Legal Officer. 6.Patrick Pichette, Senior Vice-President and Chief Financial Officer. Most of Googles top management team is hired internally, although they have held management positions with other companies prior to joining Googles management team. As stated in Googles Corporate Governance Guidelines, the duty of the board of directors is to supervise managements functioning to ensure that the company is operating in an effective, efficient, and ethical manner in order to attract and encourage future investors, and to generate value for current Googles stockholders. Moreover, the Board is in charge of evaluating Googles overall strategy and monitoring Googles performance to compare it to its operating plan and the performance of its peers (Management team, n.d.).
III. External Environment: Opportunities and Threats (SWOT)
A. Natural Physical Environment: Sustainability Issues
No natural physical environmental forces threat Google or the industry in which it competes. Google is an internet search engine where users have the ability to gain access to mass amount of information quickly and easily. The ability for users to utilize the search engine is not physically impacted in other regions of the world.
B. Societal Environment
Although physical environments do not affect Google, social environmental factors do.
1.Economic: Google can face economic downtime due to market recession. Making Harder for Google to gain advertisers and therefore decreasing current revenue of 97%, this comes from advertising.
2.Technological: Internet Security Issues is a concern to the massive pool of information and one of Googles major problems is identity theft, which affects its users. Users that use Google and are threat by the possibility of identity theft may cease from usage of the search engine.
3.Political-Legal: As Google grows, putting the competition to shame, it could gain monopoly power. If so regulatory issues pertaining to monopoly power can rise and/or other legal issues. Google can face liability issues with the Digital Millennium Copyright that limits the linking to a third-party site.
4.Social-cultural: Due to different government and other country views, Google is force to censor web content in different locations. Countries like Germany, France, Poland and China have forced these censors. The above social environmental forces vary in other countries due to geographical regulations, languages, and cultural beliefs.
C. Task Environment
Google innovation is transparent. The company continues to strive by gaining users, providers and bringing to light new tools. These achievements do not seem to stop the competition and competitors will remain the same from country to country. A.Threat of new entrants: medium
B.Bargaining power of buyers: high
C.Threat of substitute products or services: high
D.Bargaining power of suppliers: low
E.Rivalry among competing firms: medium
F.Relative power of unions, governments, special interest groups, etc.: high Google faces competition from all internet base companies that intent to communicate information to users. One of Googles possible strongest competitors is Bing. Current threats involve vertical search engines and e-commerce sites, providers of online products. Social Network, such as Facebook and twitter, are driving users in for advertising and other referrals, which causes current and future threats. Other than possible increased on competition, which may drive users and advertising ads elsewhere, Google also faces possible liability issues, Information Technology issues and security issues. With each threat, the company may seek an opportunity. For example, developing operating systems for mobile devices and others, this drives users to continue the use of Google.
D. Summary of External Factors
The integration of European Community, Eastern Europe, with economic development of Asia are all external opportunities factors that may contribute to Googles growth. Increasing governmental regulations and new product advances are factors that represent the most threat. The companys opportunity lie on the electronics industry and the driverless cars patent represented.
IV.Internal Environment: Strengths and Weaknesses (SWOT)
A. Corporate Structure
Google is known to be one of the top employers. Googles management executives are not the main decision makers, although executives do have the last say on decision to assure it meet Googles innovative strategic. Employees involvement is highly encourage at Google. At Google, the atmosphere is pleasant, family oriented. Googles approach is for top managements develop strategies and effective implementation while serving as an inspiration to the employees collaborates and brings ideas to life.
B. Corporate Culture
In a successful company, the employers are the main drivers. At Google, employees are the Googlers. One of Google firm belief is that happy employees make a company. Google hire talented, strong-minded individuals who strive for better, greater results. Many companies use this approach where they encourage employees to take lead and executives/managers simply assure projects are met and within the organizational goals. Google is a transparent company where they make sure employees keep inform by using technology and standard process for communication. Their developments and announcements are discussed in forums. Google has adapted well over 12 languages, reflecting the global audience that they serve.
C. Corporate Resources Marketing:
Googles marketing objective is clearly stated, the company doesnt shy away.
Companys mission is to provide accessibility to information to users. Googles User Interface is everywhere and can be access from any device. The corporation performs well and has sustained growth. Google continuous growth come from innovation. Google has created new products in the past years, such as, Google Maps, Google Video, PageRank, Google Docs, Gmail, among others, providing users free accessibility to several products within the brand.
Advertisement drove the revenue gain of 97% for Google and in 2008 it amounted to 51% gain. The company was not affected by the economy downtime. Although like many companies, seasonality affects Googles growth, but not significantly. After 2008, Google financial position remains stable. Revenues are constant, around $13-14 million per quarter, and operating/net income do not fluctuate a lot. Googles growth comes from the development of new products. Research and Development (R&D) / Operation and logistics:
Google hires innovative and talented employees so their creativity is used for developments of new product and processes. Google objective and strategies have been consistent with the companys mission. One of the strategies Google is to obtain knowledge about the markets need to create programs funding, company acquisition, and product development. Google products do not require storage, delivery; it is not a tangible service. Googles products are at no cost to users. Googles operation mirrors their mission, provide relevant and useful search results for users, advertising, and always strive to improve users experience in their search engine.
Human Resource Management (HRM):
At Google, the Human Resource Management seeks talented individual to come aboard. Employees at Google are awarded for high performance. In 2009, Google had around 19,835 employees. In 2010, all employees received a one thousand dollar cash bonus and a 10% pay raise. Google provided such incentive to retain skilled employees. Googles rapid growth and innovations are due to its talented employees that bring their experience and technology wisdom. Google works hard to retain those employees by providing a family oriented workplace and striving for employee satisfaction.
Information Technology (IT):
Information Technology is a concern for Google. Because hackers and spammers can harm Googles credibility, Google IT system must avoid injuries from hackers, spammers and even natural disasters. IT must work towards providing an utmost internet security. Google is well aware of these issues and it uses appropriate technology to help maintain its integrity and services.
D. Summary of internal factors
Internal Factors are brand, user experience, marketing, advertising, employee retention, and information technology issues. Google stands out and dominates the market. Bing, Yahoo and even AOL are Googles current competitions, yet Google excels with their continuous products creations and services. Google mission statement is clear and through the services it provides it is recognized how it holds true to its mission. Working at Google it is known to be pleasant, everyone would like to work happily at such employee driven company. In summary, Google has strong brand recognition, utmost service quality, and a creative cultural atmosphere. Googles success comes from its retention of skilled employees, resources in technology and innovation, and advertising.
V. Analysis of Strategic Factors
Google is a global technology company, whose main focus is to improve the ways in which people connect and transfer information via the web. With that in mind, Googles capability as a company has positioned it as one of the most important entities in the market. The main source of revenue for Google comes from the placement of online advertisements. However, because Google itself already has an established name within the public eye, the company does not need to need to place much emphasis on their own company advertisement being rated the number one search engine. Googles operation cost is very low. The way that Google extracts its information for searches is through the use of low cost Unix web servers, which index web pages across the Internet. Moreover, with the use of Pagerank, Google is able to rank web pages and give users amplification to the most important sites first.
Google is not only a search engine, but also a sort of portal to information of various categories across the web. Its product line includes: Images, Groups, Directory, and News among others. It is apparent that Google envisioned this as on its home page it keeps tabs so that the simplicity of the site can give users easy and accessible navigation. Through the use of AdWords, an advertising platform that incorporates relevant ads to the right of Googles search results, buyers and sellers are instantly connected. Users have the decisive choice to pick how much will be paid per click and the number of times the ad is to be displayed.
As for advertisers, they do not have to pay by the number of clicks on the advertisement, the can choose to pay for the number of sales. Google is a company that is continuously evolving and under development. Because the market of this company has unlimited possibilities, the source of revenue is endless. Googles growth has lead to the purchasing of other large emerging companies such as Postini, YouTube and DoubleClick, which have ultimately continued to enlarge the growth of the overall company. With expansion and strengthening of the company, Google has also been able to develop solutions for personalized toolbars as well as wireless handled devices and tablets.
As of the current moment, Googles momentum and development (through low operation cost) have lead it to be considered within the top 10 brands in the U.S., surpassing Microsofts market cap with 221.19B.
Like every company out there, though very potent, Google also has its drawbacks. On a scale, only 50-65 percent of web search queries are answered within precision. Regulatory scrutiny was made to be increased by Google, which in turn negatively impacted the business. This particular situation gave way for increased risk with continued growth and corporate expansion. Spammers, who have created dummy sites with links of pages they want Google to rank highly, have manipulated Googles search ranking technology. Google has also been faced with problems with censorship, as Government pressure has lead the company to block certain information in several locations.
For example, in Germany, France and Poland, it was illegal to post material that denied the Holocaust. As a result, Google was forced to filter out this information. With the increasing amount of data and applications available on the web, and the rising privacy issues, Googles concern for identity theft has increased as well. Cost per click advertising is confusing for customers and makes it hard for marketers to predict the cost and positioning of their ads. The presence of Google on social networks is not very big, and therefore their advertisement presence is not as big as other companies though it heavily relies on it. Nonetheless, the cost of data centers rise per year, which also means that Googles expenditures increase substantially yearly as well.
Through the use of portalization, Google can increase its income. Another opportunity on the plate is also for Google to merge with other already existing portals in order to enter the social media loop market and become a strong competitor with companies such as Facebook and Twitter. Being a developer of wireless handheld devices, Google could increase into telecommunication products such as tablets in order to enter a market that goes beyond the systematic World Wide Web. Capitalizing on the use of e-books and buying consumer sales based sites as Groupon and Gilt City could also signify a great opportunity for Google.
Googles biggest threat is losing its name value. Google runs the risk of its name being used by the public as a simple search engine. Although Yahoo! Was the first search engine to gain widespread acceptance and top the charts, it quickly lost its top notch title to Google when it introduced its state of the line search engine technology. Google fears that the same can happen to its company, the biggest threat being Bing, who owned by Microsoft, could become a serious competitor due to the great marketing power of Microsoft. Other threats include social networks (Facebook, Twitter, Yelp) as users are beginning to rely heavily on product/service referrals rather than having to take the time to search for information themselves through the search engines. Mobile applications are another threat that Google encounters. Other forms of advertisement such as billboards, magazines, newspapers, radio, television and yellow pages are also parties that Google competes against for ad dollars. Being a portal of creation and connectivity, Google provides services such as Gmail and Google Docs which compete directly with other companies who offer the same services embedded into their medium.
E. Review of Current Mission and Objectives
Googles overall mission was to be able to organize information and make it readily available to people around the world. Management of the company believed that in order to achieve the purpose in the most effective and fruitful way would be to put the needs of the users first. Committed to maintaining this, the mission of the company has been carried out in accordance and has provided heightened results.
VI. Strategic Alternatives and Recommended Strategy
Strategic alternatives and recommended strategies for Google include taking advantage of new emerging technologies and embedding them into the new creation of products and services. An example of such use can be portrayed through the artificial intelligence being incorporated into the software of cars, in order to have them drive themselves and have memory of recurring routes. Having a op of the line management team that will lead the company to the top is always a factor that should be kept in line a highly driven and talented workforce. The culture of Google should always be kept as a strategy: emphasizing teamwork, innovation, flexibility and transparency. Moreover, Google needs to place a large focus on the development of ideas in the mobile computing market due to the fact that mobile devices are quickly growing in use and soon the use of desktops and laptops will be replaced and outdated by the use of smart phones.
A. Programs to be developed to implement the recommended strategy Reconstructing Google is not a feasible nor needed option. Having the market strength that they possess allows them to go the route of instituting TQM. Total quality management will allow them to continuously improve. In order in order for the implementation of TQM, a program should be developed, to keep improving both the product and the process quality. Top management should take the role of developing these programs. In the TQM program there has to be a process where employees that work directly with the product and services are highly involved to make sure that everything is running smoothly and evaluate the situation to see where improvements can be made.
B. Financial feasibility of the programs and appropriateness of timetables and priorities Fortunately for Google, they are very financially stable and able to take on new projects and programs. A program like the suggested TQM program will not have a significant impact on their financials but it will have a great reward when it comes to their long-term success. This long-term success will come from the heightened attention to quality that will be seen by consumers in the product that are made. This will make consumers trust the brand even more and give Google a completive advantage.
C. Need for new SOP Development
As of now it seems clear that Google has very effective standards of operating procedures, as with anything, nothing is static and change is inevitable. In the future as demand changes and new technology is introduced, Google will have a need for a new SOP in order to stay efficient and above in the market.
VIII. Evaluation and Control
A. Current information system
This case does not mention the current information system used by Google, but in researching the top business intelligence systems that are available, Google no doubt has custom software that does everything and even more than the ones available in the market. Some examples of BI solutions are SAS and IBMs Cronos. Both of these solutions offer reporting, analytical processing, data mining, event processing, business performance management and many more useful tools. With the programs containing historical and present data, it can help business plan for their needs and see where they are able to get a competitive advantage by forecasting and creating what if scenarios.
B. Control Measures to ensure conformance with the recommended strategic plan
In reading over the case it was not clear what control measures were used by Google, form researching, Google sends out Tech Talks blogs and weekly TGIF meetings to pass information and communicate with employees. Rewarding good performance is something that is at the top of the list for Google. In todays competitive job market, competitors are always looking for new talent. Talent management comes into play, where Googles HRM has to constantly monitor top talent and retain them. Google has a history of maintaining a corporate culture of innovation and performance aligning the needs of the corporation with that of their employees. Google paid $1,000 cash bonus and a 10% raise to all of their employees in 2010, this here shows how valuable it is to Google to maintain their employees.
Company ƒ¢‚â‚¬‚ Google. (n.d.). Company ƒ¢‚â‚¬‚ Google. Retrieved July 18, 2014, from https://www.google.com/about/company/ Wheelen, Thomas L., and J. David Hunger. Strategic Management and Business Policy: Toward Global Sustainability. 13th ed. Upper Saddle River, NJ: Pearson Prentice Hall, 2011. Print.