Business level strategy is one of the three levels of strategic management that looks at the general objectives formulated at the corporate level and converts them to specific objectives to fit various business units of the organization (Warren, 2008). To acquire a competitive edge in the industry, an organization’s business unit can employ cost leadership, differentiation and focus strategies (Morden, 2007).
Cost leadership is where a firm offers quality products at a lower price relative to their competitors while in differentiation the firm diversifies its products to meet the needs of various markets. In focus strategy, the firm inclines its efforts towards producing goods or offering services that are unique to a particular market niche.
Google is a website that allows customers to conduct research, publish and advertise their businesses at their convenience. This website can be accessed through personal computers and even mobile phones. Of late, the use of mobile phones for research is becoming more common among students who spend most of the time on these gadgets.
In response, the company has enabled the use of these phones to create ads especially for those who want to advertise their products and services at their disposal. This has been facilitated by the latest mobile phones such as iphones that have many features that enhance their use as substitutes to computers.
To remain highly competitive in the market, Google employs cost leadership and differentiation strategies in its approach to competition. Through differentiation strategy, the company is offering a variety of products and services including Page Rank, Google AdWords, customer service, Caffeine, Google Instant and Google Android. This diversification of products aims at meeting the needs of different market niches both in the company’s mother country and in the foreign markets.
As for Page Rank, related web pages are accessed at once by the user and do not depend on the number of times a given item occurs on the webpage unlike other competitors whose search engines rely on the number of times the pages have been accessed. Google keeps on restructuring the Page Rank algorithm to keep it up-to-date (Levy, 2010).
The restructuring targets the ever changing competitive environment that is fueled by dynamic technology and innovations from other competitors such as Twitter and Bang. To remain competitive, one has to be the technological leader in a given industry.
Given that Page Rank is an intangible product, its imitation by rivals has proved a hard nut to crack that has given Google a competitive advantage for a long time (Talwar, 2011).
Since the company acquired patent rights for this product, they have been giving Google protection against duplication by its competitors such as Bang. To curb these competitors, the company has also employed a grand strategy of product development from time to time to rebrand its products and services so that they remain appealing and attractive to their customers.
In addition, Google’s internet search driven advertising is one product that has given credit to the company’s differentiation strategy. For instance, the use of Google AdWords allows the users to reach their target customers as fast as possible. This product allows businessmen to reach their target market niche in a convenient manner, at low costs compared to the high costs involved if other forms of media were to be employed such as television and radio.
The minimum charge for advertising using Google AdWords is one dollar per day (Puglisi, 2010). This places the company in a competitive edge because its competitors and substitute products are relatively expensive. This has seen it enjoy a large market share both locally and internationally.
Over time, Google has gained customer loyalty as it currently holds 65 percent of the market share (Levy, 2010). This is largely attributed to its continuous product development that has resulted to products that are appealing to its customers who have unique needs. The customers include students, businessmen, and sportsmen, just to mention a few.
Another reason for this inclination is the speed with which the users are able to access a number of materials on the company’s search engine, which create convenience for them. This has been enabled through the usage of a product termed as Google Instant that is able to predict what the customer wants to search. Besides, the company offers its services at a low price allowing advertisers to pay for their ads after they have been accessed by their customers.
Google is still in good competitive position given that in 2010 it introduced a web indexing system termed as Caffeine (Jennifer, 2010) that provides the users with 50 percent of new results compared to the previous index. This provides the users with a wide range of choices to search and also exposes them to other items that are closely related to them.
In addition, Google Scholar lets the users gain access to the latest research findings that have been published, enabling researchers to track the developments in the fields of study. Another product is the Google Android which is a mobile operating system that allows the cell phones to make use of Google applications.
To be able to sustain the above strategies, the company has embraced market development in which it’s trying to open up new markets in foreign countries. It initially started from the U.S but now it has spread its wings across the world opening centers in various countries. This move has enhanced the company’s determination of the latest developments from different regions of the world and also get a glimpse of the extent to which their competitors have ventured into the industry’s market.
In the light of the developments in the education sectors, many innovations and inventions are emerging that have given rise to new websites, new online software and other services that have embraced the latest technology. This poses a challenge to Google as it has to be able to provide facilities for its search engine in the developing countries that adopt the new innovations at a high rate.
However, all these developments come as costly as they involve the use of technology whose acquisition could prove expensive for the company.
Hence, if Google can employ strategies such as strategic alliances, joint ventures, mergers and acquisitions, then it will enjoy economies of scale as it will acquire technology from these other companies and even be able to penetrate to broader market with ease. The company can also adopt defensive strategies other than patency for its intangible products that will see it remain competitive for a longer time.
In addition, for the company to be in a position to avert law suits from time to time from competitors, it should impose control over the use of its search engine so that sites with pornographic material and any other material deemed immoral or improper in a given nation, are not allowed to be accessed.
Also, the company should device a better way of handling its human resources as it’s noted that one of its executive officers left for Facebook because of lack of loyalty and dedication (Shiels, 2008). The management should, therefore, device ways of communicating with their staff and in addition review their salaries based on the market rate or even adding them bonus as a motivation token.
Since Google outsources its contractors, the costs of paying for their services are high. It would be prudent if they employed their own contractors who could create convenience and get paid on contract basis; in case they leave, the company will be able to plan in advance. As result, Google’s reputation could get better as employees’ turnover will come down.
TOWS matrix is a tool used for analyzing the business environment’s situation (Schendel, 1978). It stands for Threats, Opportunities, Weaknesses and Strengths.
The external Threats and Opportunities are assessed and compared with the organization’s Strengths and Weaknesses to see how the management can make use of its strengths and take advantage of the opportunities in the industry to remain competitive (Steiner, 1977).
In addition, the management looks at how to employ its strengths effectively to curb its external threats and overcome its weakness. The TOWS matrix is illustrated in the following case of Google Company in the following page.
References
Adam. (2009). Google SWOT Analysis. MBA Tutorials website. Web.
Jennifer, J. (2010). Google search engine gets a caffeine boost. Web.
Warren, K. (2008). Strategic Management Dynamics. John Wiley and Sons, Ltd.
Levy, S. (2010). How Google’s algorithm rules the web. Web.
Morden, T. (2007). Principles of Strategic Management. Ashgate Publishing Limited.
Puglisi, B. (2010). How to advertise your business with Google. Digital Brand Marketing Education website. Web.
Schendel, D. (1978). Strategy Formulation: Analytical Concepts. West Publishing. St. Paul.
Scott, J. (2006). Google’s Weakness. Web.
Shiels, M. (2008). Google denies staff brain drain. Web.
Steiner, G. (1977). Management Policy and Strategy. Macmillan, New York.
Talwar, A. (2011). Business level strategy of Google search engine. Web.