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MGT 4380 – Strategic Management Instructor: Dr Kimberly Boal

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1 MGT 4380 – Strategic Management Instructor: Dr Kimberly Boal
Mikey, Michael, Meredithe, Jake, Charly, Virginie, Natalie MGT 4380 – Strategic Management Instructor: Dr Kimberly Boal

2 Google’s History In 1998 current CEO Larry Page an undergraduate student at Stanford launch Google In 2000 Google enter the foreign market and provide 10 different languages of their search engine As 2010, Google offers over 100 languages

3 Information 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 Search Google Earth Google Desktop Google Maps Google Video Google Groups Google Mail Google Trends 3

4 Innovation Google’s top goal in 2006 was to increase the scale of innovation Google search engine,is the largest search engine on the Web. “bottom up”/mass collaboration capability: which is Internet, personal messaging systems, and social networks Google keeping up with Apple introducing the Android. 4

5 Continual Change Google was a Web-based search engine
Google now has changed and is capable of doing many more things Google maps: interactive Follow trends: finances Newest change it is now possible to get satellite images of Earth at any point 5

6 Creativity Creativity- is the ability to combine ideas in a unique way or to make unusual associations between ideas. Google's new marketing unit- Google Creative Lab Still in its developing stage Small teams Find new ways to communicate the company’s innovations, intentions and ideals 6

7 Google's Vision and Mission Statements
Google's Vision Statement: an open web benefits all users and publishers. “Open” does not be free Google’s Mission Statement: is to organize the world’s first information and make it universally acceptable and useful 7

8 Leadership 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

9 Top Executives Larry Page- Co-founder/ CEO Sergey Brin- Co-founder
L. John Doerr- Board of Director Eric E. Schmidt- Executive chairman Nikesha Arora- Senior VP, Corporate development & Chief legal officer Patrick Pichette- Senior Vice President 9

10 Internal Analysis Google’s mission statement: Strengths Weaknesses 10

11 Internal Analysis Google’s Value Chain Raw material: web users
Finished goods: “conversion” or click 11

12 SWOT Analysis External Opportunities and Threats
Two examples of Google's SWOT Analysis

13 Opportunities New Products along with increased positive outlook for Android Nexus One and Nexus S Android OS

14 Opportunities continued
New Products Google Chrome and Chrome Book

15 Threats Microsoft & Yahoo! Vertical Search Engine
Search engines like Bing and Yahoo! Search Vertical Search Engine

16 Financials Current Ratio Gross Profit Margin Net Revenue
Short term assets and short term liabilities Gross Profit Margin 69.7 Net Revenue

17 Two-Sided Market

18 Global Market Share

19 Time Line Trend

20 Global Relations Crisis Drops Stock Prices

21 Yahoo Bing Baidu Competitive Analysis

22 Operating in 50 countries and 25 different languages
They have good brand recognition Losing Revenues in the past three years have cause layoffs through out the company. 30% of the revenues come from business outside the U.S. Differences They receive income from mobile products, royalties, licensing, premium s, and advertising

23 Yahoo 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 differences Takes away traffic from their own websites. Lacks brand recognition compared to Google Enhanced search capabilities that Google has had for long time.

24 Have 80% of China’s Market Share
Advantages: Better knowledge of Chinese language Better relationship with Government Filters Similarities: Revenue comes from advertising Recently made an investment in Travel Search Engine

25 Google

26 What’s Google doing to Combat?
Investing in other interests Diversifying their product line AOL partnership Helps AOL with advertising Gives Google better video technology New purchase of ITA Software Enhances Google’s travel tab

27 Low Cost and Differentiation Strategy
Low Cost Advantages: Low operating costs Same technology used for all aspects of the business Differentiation Advantages: Unique formula High customer utility Strong Brand Value Low Cost and Differentiation Strategy

28 Current Industry Standing (Visual Awakening)
Awareness of Comparable factors (compared to Yahoo) Cost – less overhead for operations and promotion, search engine is promotion in itself Brand Awareness – Google has higher brand loyalty than Yahoo Views to site annually – Google=82.8% while Yahoo=6.42% Convenience of Information Accessibility and ease of use By Google leading the industry in these key factors, we will not need to adjust corporate strategy as aggressively.

29 Doing What Google Does Best…
Google does very well at adhering to the hedgehog concept and follows the three determining factors Passion – 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 about This helps result in the greatest effort towards new product ideas and is the reason some of the most innovative ideas are formulated

30 Doing 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 useful We have best search engine online today (most viewed) We must continue to have best search engine because 97% of our revenue is from advertisements Advertising expenditures for this industry have rose: 11% in 2008 3% in 2009 12% in 2010 for US internet companies ( 1/3 came from American companies

31 Reaching 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 firms Even 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)

32 Reaching Beyond Current Demand
Unexplored customers: People who search information on non-internet resources Not worth Google trying to attract Refusing Customers: Already have loyalty with other search engine Internet “cult followers” are hard to sway Soon-To-Be Customers: Optimal group for Google to try to reach These internet users may be unsatisfied with current search engine Should advertise improvements in our search engine and pointing out flaws of other ones.

33 Google’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 industry Google operates primarily in one and only industry Google’s long term objectives are to move the organization forward: Growth strategy.

34 Google’s Organizational Growth Strategy
The company implement that strategy through: Concentration strategy Vertical Integration Horizontal Integration Diversification Google operates internationally as its main business support is Internet.

35 Concentration Strategy
Google meets its growth objective through increasing its level of operation in this primary business Google looks for ways to grow through different combinations of its present product(s) and market(s). Google’s options to grow: Product and Market exploitation Product development Concentration Strategy

36 Concentration strategy
Product and Market exploitation The 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 Chrome Google Co-Op Google Labs

37 Concentration strategy
Product Development Google 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. Gmail Google Scholar Google 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 service Through the years, Google: built its own server computers built and operated its own data centers wrote much of its internal operating software generates some of the electricity for its buildings Vertical Strategy

39 Strategy 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 videos Horizontal Strategy

40 There 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 development Google 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 Services Nexus One and Nexus S Software development kit for developers to create applications for Android-based phones Diversification

41 Growth 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 Development Acquisitions Strategic Partnering

42 The 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 spendings Internal Development

43 Internal Development One of the biggest internally developed projects of Google is Gmail Initially the software was available only internally as an client for Google employees.

44 An 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

45 Acquisitions 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

46 A 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 advertising Among 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

47 Environmental Initiatives
Built the largest solar panel Investment in Wind energy Investment in enhanced geothermal system Operates on 50% less energy Recycle 100% of the electronic waste leaving Google Buy food from local farmers Donations for bike riding Environmental Initiatives

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