Google's Business Strategy

Google is continuing to move to broaden its business allowing it to obtain access to more desired investment options in its market. We can see in particular that, through information and hi-technology, Google is directing its focus to ways to gain competitive advantage.

Google may attempt to enter industries with existing competitive advantages, such as mobile phone platforms, advertisements or online payments, by acquiring an existing rival, in which case the acquisition cost is likely to capitalize entirely on the profit potential of the target company.

Once Google joins a sector such as operating systems, there will be a fair competition with Microsoft and as such all businesses must compete to provide the best operating systems to gain a broader market and high revenue. The strategy of diversification provides a competitive advantage. Maximizing income is the primary desire to create a company. This is why Google attracted its customers by offering a broad range of products by joining other businesses.

Google’s business strategy is diversification whereby the company has ventured in different businesses. From the case study, Google lacks a clear vision simply because it has taken numerous diverse directions at once making its identity mixed-up. The establishment of Alphabet Inc. as the top management of Google elicited mixed reactions as some people saw it as just a thoughtless technology based expansion over shareholder interests which according to them lacked a clear vision. Lacking a clear vision by venturing into several markets rendered Google into direct rivalry with many web and software companies like Amazon, Apple, Facebook, Microsoft, Expedia, Honeywell, Verizon, and Netflix (Grant, 2016). 

Diversification strategy creates competitive advantage. For instance, when Google enters into a business like operating systems, there will be a healthy competition with Microsoft and as such both companies will strive to offer the best operating systems in order to secure a wider market and good returns. The ultimate intention of starting a business is to maximize profit. It is the reason why Google was enticing its clients by offering a wide range of products through joining many businesses (Rugman & Verbeke, 2017). In my view, profit is one of the reasons for commencing a business. Therefore, a company will always choose a strategy that satisfies its needs. In this case, Google had to develop a plan that would ensure that it continued with its operations as a going concern. The stiff competition faced from other established firms in various businesses made Google to announce plans for restructured operations.

As a search engine, Google performed well in the market due to its simple design and superior page ranking. It is the reason why the competitors and other individuals were accusing it of using the wrong strategies. The demand for their products was significantly growing despite the condemnation from critics. It is therefore evident that Google’s innovations enabled it to gain a competitive advantage over its rivals in the industry. Among the threats that Google encountered, stiff competition from rival firms prompted the company to restructure its operations. Establishments like Amazon which deals with online trade, Apple in mobile platforms, Facebook, Microsoft in browsers, Expedia, Honeywell, Verizon, and Netflix in streaming videos compete with Google for the same market space. According to the Federal Trade Commission, Google had violated its monopoly power by using anti-competitive tactics (Grant, 2016).  

Google requires change. The refocus plan should attain the company’s intended objectives by dwelling on the businesses or products that best suits and adds more value to the brand name of the company. Products or businesses which fetch more revenue should be given priority and those that face stiff competition and do poorly in the market should be abandoned. Above all, Google need to contain measurable outcomes and communicate a clear and common vision that could sail it through the corporate strategy.

Reference

Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Rugman, A. M., & Verbeke, A. (2017). Global corporate strategy and trade policy. Routledge.

Bakos, Y., Treacy. M. (n.d). Information technology and corporate strategy: Competitive strategy research.