Introduction
Google Inc. has developed a unique business and operation strategy that enables it to provide its software almost free of cost to its customers. Since 1998, when it was first incorporated in 1998, Google has shown continuous growth and expansion. Due to its eminence as an innovative tech company, Google stresses highly on developing new and innovative products. It has captured a large part of the smartphone software market for its mobile operating system, Android, through its unique alliances.
The most recent endeavour of the company is to build an innovative hands free wearable computer device called Glass. The Glass can be worn with a sunglass or a prescription glass. Being the first firm to have achieved the possibility of a wearable computer, Google enjoys the status of the first entrant into the wearable computer market, which is yet to develop. Recently the company has decided to mass market the product (Melton 2014). This paper analyses and evaluates the operations strategy of Glass. The paper will first try to understand the general environment of the Google Glass and the objective and goals of the company for the product.
Theory
The evaluation of the operations strategy of Google Glass will be based on understanding the entry strategy for an innovative futuristic product that faces social barriers to adaptation. In order to understand the operational strategy of a company it is paramount to understand the strategy that the company undertakes and the internal and external environment that possible has an influence on its decision-making process.
In case of Google Glass, it should be understand that understanding the market is important as it is creating a completely new product for the market and adaptability of the innovation will influence its performance. Hence, the operations strategy will depend on the market requirements. Being the first entrant into the wearable computer market, Glass has its strategic and competitive advantages (Lieberman & Montgomery 1988). Earlier researchers have often replied on the reason for the failure or success of first-mover opportunity on ‘luck’ (Lieberman & Montgomery 1988) that the more recent scholars have rejected (Chesbrough & Rosenbloom 2000).
Google Glass – Evidence
Competitive Advantage
The competitive advantage of the product is its first mover’s advantage. Google Glass enjoys the position of the only product that is present in the market. Presently, Google has given the product to 8000 select developers but in 2014, it has entered into and alliance with Luxottica and VPS Global to mass markets their product (Melton 2014). However, the product is still nascent and is in the introductions stage of the product life cycle.
SWOT Analysis
A SWOT analysis of Google Glass is shown in table 1 that shows the strengths and opportunities for Google Glass and the problems it may face in its latest strategy to mass market.
Table 1: SWOT Analysis of Google Glass
The strength of Glass is its first movers’ advantage into the market. The SWOT analysis shows that the three main constraints that will determine the adoption of Google Glass are – cultural constraints, pricing, and developer’s interest (Danova 2013). Google has segregated the innovators and the early adopters through two distinct actions – first, Google distributed the product exclusively to select 8000 developers who could have been innovators and second, by entering into an alliance with eyewear makers for mass distribution to general users.
Threat that Google Glass faces are government regulations and social barrier to adoption of the product. Further, the weakness of Google Glass is high price tag and lack of market penetration (Miller 2014).
Google Glass is an innovation, and adoption of an innovation takes time. Proper distribution and marketing of the product can break the geeky perception of the product and help greater adoption. Presently, the product image is one that is of an expensive, high-tech innovation that only early adopters will be willing to buy. In order to create a mass popularity of the product, the product’s perception must dwell on usability and fashion. Hence, the new form of positioning of the product as a fashion gadget can be successful.
Value Chain for Glass
The value chain of Google Glass so far consisted of research and development of the hardware. The operating system it works on operates almost on a similar platform as Google’s smartphone OS. However, Google affiliated developers develop the content and applications. In 2013, 2000 Glass Explorers were given to few early adopters of innovation who, the company believed, would be enthusiastic to use the product. However, in 2014, Google decided to mass market the product and so went into an alliance with Luxottica and VPS Optics (Melton 2014). Thus, the value chain of Glass was split into five sections (see figure 1) where Google directly controlled the first and the last segment. Its partners, the application developers and distribution and retailing partners, controlled the rest.
Analysis
Google developed Glass as a futuristic eyewear that was a wearable computer. It allowed the users information, computing ability, and real time networking possibilities. However, Google did not mass market the product (O’Toole 2014). However, in 2014, the company has entered into an alliance with Luxottica and VPS Optics, which shows clear intention to mass market the product (Stone 2014).
The SWOT analysis shows that the three main constraints that will determine the adoption of Google Glass are – cultural constraints, pricing, and developer’s interest (Danova 2013). A few threats that Google Glass faces are government regulations and social barriers to adoption of the product.
Google glass can be used in many different industries to great effect. For this purpose, Google has targeted the specific industries for adoption of the product. One of them is the healthcare division (O’Reilly & Hartley 2013). Royal Philips has demonstrated the benefit of using Google Glass for research and surgical purposes (O’Reilly & Hartley 2013). In another instance, Google Glass was distributed for military usage (Sullivan 2014). Such targeted marketing of the product through industry channel will help in adoption of the product more effectively.
One problem with the operations strategy of Google Glass is the company’s interest to enter both, the mass market and the high-end market, simultaneously. In 2013, Glass was marketed to a few enthusiasts and to surgeons, developers, military use, researchers etc. Hence, the aim was to make the Glass available for specialised functions. However, in 2014, the company changed its strategy to market the product to general users, thus, lessening the exclusivity of the product.
These two strategies are contradictory and at times may create strategic problems. However, prior experience from Blackberry demonstrates that a niche marketing strategy may backfire when a competitor becomes stronger in the targeted market. It was observed in case of Blackberry who lost their stronghold in business-smartphones when Apple captured the market with iPhone. Then it tried to enter the mid-range smartphone market but lost out due to stiff competition from Asian manufacturers. Blackberry lost its control in the smartphone market.
Conclusion
The operations strategy that Google employed for Google Glass is specifically two fold – first, carter to targeted market and second, masses market the product for general users. The strategy is to convince more consumers to adopt the product. This bifurcated strategy allows Google to capture both the business-to-business market as well as the business-to-consumer market. The product positioning in these two markets is different. In the first market, it is sold for its utility while in the latter it is sold as a fashion accessory.
Reference List
Chesbrough, H & Rosenbloom, RS 2000, ‘The role of the business model in capturing value from innovation: evidence from Xerox Corporation’s technology spin off companies’, Industrial and corporate change, vol 11, no. 3, pp. 529-555.
Danova, T 2013, ‘Google Glass Will Become A Mainstream Product And Sell Millions By 2016’, Business Insider, Web.
Garfinkel, S 2014, ‘Glass, Darkly’, MIT Technology review, vol 117, no. 2, pp. 70-77.
Lieberman, MB & Montgomery, DB 1988, ‘First Mover Advantage’, Strategic Management Jurnal, vol 9, no. S1, pp. 41-58.
Luxottica 2014, GOOGLE and LUXOTTICA announce strategic partnership for Glass to develop innovative iconic wearable devices, Web.
Melton, NM 2014, ‘Google launches first retail effort for Google Glass’, Fierce Retail, Web.
Miller, CC 2014, ‘Biggest Eyewear Company Signs On With Google Glass’, The New York TImes, Web.
O’Reilly, K & Hartley, C 2013, Philips collaborates with Accenture to create first proof of concept for delivering vital patient data via Google Glass , media release, Web.
Stone, B 2014, ‘Google to De-Dorkify Glass in Partnership With Ray-Ban Maker Luxottica’ , Busienssweek, Web.
Sullivan, L 2014, ‘How Special U.S. Military, Law Enforcement Ops Could Put Google Glass In Tactical Situations’, Media Post, Web.