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.

Google becoming alphabet

Even in the early days of Google, cofounders Page and Sergey Brin would let their minds wander to other seemingly impossible projects beyond the already ambitious task of building a search engine to change how millions use the Internet. Nearly 17 years after founding Google, Page and Brin remain as ambitious as ever, if not more so. Yet, the day-to-day management demands of running Google, essentially an elaborate $400 billion advertising business, increasingly weighed on Page in particular.

     The high-profile structural change may offer many benefits to Google: more C-suite opportunities and autonomy to prevent promising executives from leaving; an improved organization for acquiring multi-billion-dollar businesses; more transparency for Wall Street about Google's many varied investments. Ever since Page returned to the CEO role at Google in 2011, he has been debating possible changes to the organizational structure that would allow him to maintain broad control of the business he created while nonetheless giving him more freedom to pursue new ventures (Seth Fiegerman 2015).

     Not only does the structure of Alphabet offer more appealing slots for these big new ventures to grow and potentially be spun off one day, the name change might also help protect Google proper, which is by far Alphabet's biggest money maker. As one former exec put it to us, "How can you take big swings when everything may hurt the Google brand? “Google, like many established technology companies, is also competing against the growing number of billion-dollar startups, or Unicorns, to hire and hold on to its top talent. The option to have more C-suite jobs across the company may help.

The idea seems to be to allow Google to remain focused on things related to its mission while Alphabet can expand into new areas without the burden of explaining how everything supposedly fits into Google.

Alphabet is a new company being created by the founders of Google that will take over everything currently run by Google. Call it a conglomerate or holding company, Alphabet will become the new parent of Google and for other companies like Nest that are currently owned by Google. 

Reference 

Seth, F. (2015). The inside story of why Google is becoming Alphabet now retrieved https://mashable.com/2015/08/11/google-alphabet-timing/

Pay-Per-Click

There are numerous advantages of pay-per-click over other concepts like impressions, as impressions alone do not guarantee anyone actually saw the ad, only that it displayed. A click is an indication that there was some level of interest, and verification someone actually saw the ad. Once the ad has been clicked you can at times glean a decent amount of information about this potential customer, how they came to see the ad in the first place, what they did once they clicked the ad, and other various location, demographic, and user agent data that is being tracked for the user. A pay-per-click campaign can have an average budget per day that can be adjusted and the ad can be retargeted as desired. A negative to the PPC model would be the need to maintain the parameters, as if left unchecked you might end up paying lots of $$$ for irrelevant clicks derived from similar but unrelated search terms. These have to be culled from the phrases that display the ad. Another downside to PPC ads is that consumers are ignoring ads, and advertisers need to find other ways to influence us (Dodson, 2016).

When it comes to promoted search ads, I will sometimes click the links of companies I do not care for, though I do pay attention to the ads and will click them if relevant. While marketing is not my department, I get involved in all aspects of the business I work at, and as such, I have set up several AdWords campaigns and get great results and when combined with the analytics data from the website you can see what users are doing once they click your ad which can be quite insightful.  I also promote open position ads on indeed.com which are pay per click, with the cost per click being tied to the number of other employers I am competing with to get my listing highlighted based on the position type and location. 

Reference

Dodson, I. (2016). The Art of Digital Marketing: The Definitive Guide to Creating Strategic, Targeted, and Measurable Online Campaigns, 1st Edition.