Presentation on theme: "MGT 4380 – Strategic Management Instructor: Dr Kimberly Boal"— Presentation transcript:
1MGT 4380 – Strategic Management Instructor: Dr Kimberly Boal Mikey,Michael,Meredithe,Jake,Charly,Virginie,NatalieMGT 4380 – Strategic ManagementInstructor: Dr Kimberly Boal
2Google’s HistoryIn 1998 current CEO Larry Page an undergraduate student at Stanford launch GoogleIn 2000 Google enter the foreign market and provide 10 different languages of their search engineAs 2010, Google offers over 100 languages
3Information Revolution Google has introduced revolutionary changes in the way that any kind of information is managed, shared and made useful. Google has created these products over a period of time.Google SearchGoogle EarthGoogle DesktopGoogle MapsGoogle VideoGoogle GroupsGoogle MailGoogle Trends3
4InnovationGoogle’s top goal in 2006 was to increase the scale of innovationGoogle search engine,is the largest search engine on the Web.“bottom up”/mass collaboration capability: which is Internet, personal messaging systems, and social networksGoogle keeping up with Apple introducing the Android.4
5Continual Change Google was a Web-based search engine Google now has changed and is capable of doing many more thingsGoogle maps: interactiveFollow trends: financesNewest change it is now possible to get satellite images of Earth at any point5
6CreativityCreativity- is the ability to combine ideas in a unique way or to make unusual associations between ideas.Google's new marketing unit- Google Creative LabStill in its developing stageSmall teamsFind new ways to communicate the company’s innovations, intentions and ideals6
7Google's Vision and Mission Statements Google's Vision Statement: an open web benefits all users and publishers.“Open” does not be freeGoogle’s Mission Statement: is to organize the world’s first information and make it universally acceptable and useful7
8Leadership Level 5 leaders Modest and Willful, Humble and Fearless Set up their successors for even greater success for the next generation.Many Google offices- Googlers work in small, focused teams and high- energy environments.8
9Top Executives Larry Page- Co-founder/ CEO Sergey Brin- Co-founder L. John Doerr- Board of DirectorEric E. Schmidt- Executive chairmanNikesha Arora- Senior VP, Corporate development & Chief legal officerPatrick Pichette- Senior Vice President9
22Operating in 50 countries and 25 different languages They have good brand recognitionLosing Revenues in the past three years have cause layoffs through out the company.30% of the revenues come from business outside the U.S.DifferencesThey receive income from mobile products, royalties, licensing, premium s, and advertising
23Yahoo and Microsoft collaboration started in 2009 effective till 2015. Currently powering both Yahoo and MSN searches.Advantages:Best Resources from each company:Combines Microsoft’s new search technology, and Yahoo’s video and advertising capabilities.Disadvantages:Cultural differencesTakes away traffic from their own websites.Lacks brand recognition compared to GoogleEnhanced search capabilities that Google has had for long time.
24Have 80% of China’s Market Share Advantages:Better knowledge of Chinese languageBetter relationship with GovernmentFiltersSimilarities:Revenue comes from advertisingRecently made an investment in Travel Search Engine
26What’s Google doing to Combat? Investing in other interestsDiversifying their product lineAOL partnershipHelps AOL with advertisingGives Google better video technologyNew purchase of ITA SoftwareEnhances Google’s travel tab
27Low Cost and Differentiation Strategy Low Cost Advantages:Low operating costsSame technology used for all aspects of the businessDifferentiation Advantages:Unique formulaHigh customer utilityStrong Brand ValueLow Cost and Differentiation Strategy
28Current Industry Standing (Visual Awakening) Awareness of Comparable factors (compared to Yahoo)Cost – less overhead for operations and promotion, search engine is promotion in itselfBrand Awareness – Google has higher brand loyalty than YahooViews to site annually – Google=82.8% while Yahoo=6.42%Convenience of InformationAccessibility and ease of useBy Google leading the industry in these key factors, we will not need to adjust corporate strategy as aggressively.
29Doing What Google Does Best… Google does very well at adhering to the hedgehog concept and follows the three determining factorsPassion – Google hires employees who strive for innovation in R&D and enjoy creating new globally accepted, innovating ideas.Executives allow free time for Google employees to work on their own projects they are currently passionate aboutThis helps result in the greatest effort towards new product ideas and is the reason some of the most innovative ideas are formulated
30Doing What Google Does Best… What Google is the best at is also their mission statement:Mission – Organize the worlds information and make it universally accessible and usefulWe have best search engine online today (most viewed)We must continue to have best search engine because 97% of our revenue is from advertisementsAdvertising expenditures for this industry have rose:11% in 20083% in 200912% in 2010 for US internet companies ( 1/3 came from American companies
31Reaching Beyond Current Demand More people are naturally migrating to online materials for their information research.Industry is naturally growing in customer base because online business is the new status quo for profit and non-profit firmsEven first time internet users are bound to use Google at some point to explore the internet.We should aim to attract soon-to-be customers, rather than refusing customers or unexplored ones (three tier framework)
32Reaching Beyond Current Demand Unexplored customers:People who search information on non-internet resourcesNot worth Google trying to attractRefusing Customers:Already have loyalty with other search engineInternet “cult followers” are hard to swaySoon-To-Be Customers:Optimal group for Google to try to reachThese internet users may be unsatisfied with current search engineShould advertise improvements in our search engine and pointing out flaws of other ones.
33Google’s Corporate Strategy “The corporate strategy is usually defined as those strategies concerned with the board and long term questions of what business(es) the organization is in or wants to be in, and what it wants to do with those businesses”Google is operating the Internet and Computer Software industryGoogle operates primarily in one and only industryGoogle’s long term objectives are to move the organization forward: Growth strategy.
34Google’s Organizational Growth Strategy The company implement that strategy through:Concentration strategyVertical IntegrationHorizontal IntegrationDiversificationGoogle operates internationally as its main business support is Internet.
35Concentration Strategy Google meets its growth objective through increasing its level of operation in this primary businessGoogle looks for ways to grow through different combinations of its present product(s) and market(s).Google’s options to grow:Product and Market exploitationProduct developmentConcentration Strategy
36Concentration strategy Product and Market exploitationThe product/market exploitation strategy option describes attempts by the organization to increase the sale of its current product(s) in its current market(s) .By developing its core product, Google uses incentives to get current customers to buy more, or advertises other uses for the product:Google ChromeGoogle Co-OpGoogle Labs
37Concentration strategy Product DevelopmentGoogle focuses on complementary products and services that are consumed alongside their products or services.The company developed applications and solutions which respond to their consumers’ full needs.Google created new applications that provide a highest level of product performance, of functionality, of product innovation and the latest technology.GmailGoogle ScholarGoogle News
38“Backward” Vertical Strategy: occurs when a company decides to merge with or acquire its suppliers It is the ownership by the same company of different functions in a supply chain relating to the provision of a particular good or serviceThrough the years, Google:built its own server computersbuilt and operated its own data centerswrote much of its internal operating softwaregenerates some of the electricity for its buildingsVertical Strategy
39Strategy to increase your market share by taking over a similar company. This can be done through take overs, mergers our buyouts. One of the biggest Google buyout was Youtube, The combined companies focus on providing a better, more comprehensive experience for users interested in uploading, watching and sharing videosHorizontal Strategy
40There is an ambiguity in either Google is still operating in a single business. Google explores new opportunities constantly through a solid base of research and developmentGoogle use a “related diversification” strategy as Google moved into a new industry but similar to the company’s current business. Google tried to find a strategic fit.Google Mobile ServicesNexus One and Nexus S Software development kit for developers to create applications for Android-based phonesDiversification
41Growth Strategy Implementation Strategy implementation skills are not easily mastered.Implementation is often defined as the most difficult aspect of managers work, often more difficult than strategic analysis or strategy formulation.Google implemented its growth strategies through several types of actions:Internal DevelopmentAcquisitionsStrategic Partnering
42The fact of growing by creating and developing new business activities itself, without the help and action of other entities.Need for resources, distinctive capabilities and core competencies.Google has a strong willingness to accept risks of starting new business:Time frame and development costs associated with the creation of a new business.Google’s 2nd quarter results for show a 22% increase in internal development spendingsInternal Development
43Internal DevelopmentOne of the biggest internally developed projects of Google is GmailInitially the software was available only internally as an client for Google employees.
44An acquisition is a corporate action in which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm.Since 2001, Google has acquired many companies, mainly focusing on small venture capital companies.Google has acquired over 90 companies.Today, several of Google’s products are derived from acquisitions including Docs, Earth, and YouTube.Acquisitions
45Acquisitions Google’s biggest acquisitions: #1: DoubleClick display ad technology, $3.1 billion#2: YouTube video sharing site, $1.65 billion#3: AdMob mobile advertising, $750 million#4: Postini security and services, $625 million#5: Android mobile platform, "up to" $50 million
46A partnership is an arrangement where parties agree to cooperate to advance their mutual interests. Google has partnered with many other organizations for everything from research to advertisingAmong all its partnerships, some were particularly important and enable Google to grow rapidly.#1: AOL#2: GeoEye for Google Earth#3: National Aeronautics and Space Administration (NASA)Strategic Partnering
47Environmental Initiatives Built the largest solar panelInvestment in Wind energyInvestment in enhanced geothermal systemOperates on 50% less energyRecycle 100% of the electronic waste leaving GoogleBuy food from local farmersDonations for bike ridingEnvironmental Initiatives