Recent developments in the internet and software business especially the level of commercial aggression arising from competitors such as (Microsoft, Apple and Facebook) is making it quite hard for Google to conclude that its business model is secured in the near future and the distant future.
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Considering that Google’s main source of revenue is from internet advertising, and software development and companies like Facebook and Twitter, Microsoft, Yahoo and other participants have considerably snatched a lot of business for them since they came into existence.
Google has no option but to respond quickly and effectively with plans that will enable the company eliminate all weakness and forge in the future with a more stable business.
Thus in order for Google to reduce the amount of risks and uncertainty that it is faced by the company, it may be forced to revise its business model and eliminate any elements that may pose a threat or cast a weakness upon their business model.
Today’s business environment is highly dynamic and volatile. How commercial enterprises used to go about business yesterday is not the same today and thus companies don’t have the luxury to assume that the future will be as the same today as it was yesterday ( Kourdi 2009, 122). Everyday there are new trends emerging in the business world which either influence or act as a force of initiating change in the business community and if companies remain rigid, then they may find themselves in problems.
Consumers are becoming more radical and more aware of their rights pushing companies to develop strategies that govern their marketing mix and overall business strategy (Kotler 2003, 161).
The internet and computer software industry is a highly competitive industry that is extremely volatile with the new inventions hitting the market each and every day.
Therefore industry participants who operate within this industry are often forced to use more aggressive strategies to ensure that their business models adapt to the ever changing environment (Beach 2011. 141) Google is a software and internet company that was founded in 1998. The Company is a multinational company that runs its internet business in almost every country of the world. Additionally, the company makes annual profits of over $ 7billion and an intelligent talented workforce of over 20,000 employees.
Google has risen to be one of the most respected companies in the world, and thus has continuously aimed to improve its business amongst competitors such as Microsoft, Yahoo, Bing and Baidu and the various social sites that have arisen such as Facebook and Twitter (Beach 2011. 141).
The future of most businesses is not certain and hence companies vigorously involve themselves in a successful strategy so that the levels of risks and uncertainty can be reduced (Boone 2010, 88).
Google’s business platform involves the selling of many products and services such as Google’s famous Android Smartphone Handset, Google’s social sites such as Orkut and Buzz, Google’s Chrome OS, Google’s instant messenger Google talk and its various marketing and advertisement platforms that act as the main source of revenue for the company (Bhupendra 2011).
Googles mission and vision is to provide simple yet leading technology to the millions of people using the internet, and therefore in order for Google to succeed in doing this the organization must make sure that it operates in a problem free environment by dissolving various problems facing the organization with the help of planning and strategy.
Major problems and issues that Google needs to address
Poor customer service value
The lack of a well set customer support system within Google may act as a hindrance to the mission and vision of Google. Today’s business environment is full of sensitive customers therefore it is necessary that companies develop facilities that will assist the business to make sure that each query and expression of a consumer is properly captured and responded to within a reasonable time frame ( Koontz & Weihrich 2009, 133).
The line “we will not necessarily respond to your message” is normally a common feature of Google’s search engine unlike companies like Facebook which usually make sure they respond to the concerns of customers efficiently while Google does not and this may lead to the downfall of the company.
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For strategy to work properly within an organization it is a must for an organization to treat a customer like king and come up with a mechanism that will respond to the need of consumers whenever need arises and the best mechanism for doing so is a fully equipped and well staffed customer care department (Bhupendra 2011).
Yahoo one of Google’s largest competitor has a fairly stronger customer service and therefore this fact may rub well with consumers and hence dissatisfied consumers may consequently switch to where they think their opinion matters (Bhupendra 2011).
It is important not for Google to recruit the best computer scientists and developers but also dedicate efforts towards implementing superior customer care facilities, because if consumer needs and desires are ignored this may prove problematic. Many companies have become successful because they have set up systems which can mine vital data from their consumers by the help of well established customer care centers (Kotler 2003,203 -211).
The date that is collected from this stage is then used to formulate, implement, evaluate and control the various forms of strategies that exist within the organization. As a result the companies which have good strategies can easily navigate their way through present and future crises (Koontz & Weihrich 2009, 53).
Stiff Competition and Hostility
Google may have recently gained ground on other business fronts but Facebook and Twitter has significantly threatened its dominance in the internet advertising industry (Bhupendra 2011).
Additionally, the number of people who previously depended on PC’s and Laptops to access the internet is sharply falling since the introduction of smart phones, with the current increase in the number of people who are now using smart phones as their primary means of accessing the internet then Google’s previous assumptions that the Personal computer and Laptops would remain primary sources of placing advertisement has been met wit astonishment.
Internet advertisement companies have been forced to upgrade their technology and enter the mobile telephony advertisement industry. Competition between social sites and Google has also forced Google to enter into the social marketing media although Google’s penetration remains small (Bhupendra 2011).
Thus if Google intends to continue dominating the internet viral marketing atmosphere the company may be forced to either partner up with current dominant social sites or use other mechanisms to make sure their social sites such as Buzz and Orkut gain numbers as fast as possible.
Away from internet advertising both Microsoft and yahoo are becoming more vigorous and thus pose a threat to Google’s dominance thus forcing Google to take part in continuous strategic consultations and evaluation in order to perform well.
It should therefore become the duty of one department within Google to continuously gather competitive intelligence and consult with strategic heads in order to evaluate and control the strategy of Google (Kotler 2003, 211).
Since Google has decided to start manufacturing hardware such as the Android Smartphone and developing other software such as the Chrome OS many previous business partners like Samsung, Intel, have seen this move as a bad move that threatens their business models and therefore are planning retaliatory moves against Google (Bhupendra 2011).
Google’s inability Penetrate the Chinese market
The Chinese market is one of the largest internet markets with close to 400 internet users and therefore gaining control over such a market would prove very profitable to the business of Google (Beach 2011 141).
It is thus necessary that Google sets up proper mechanisms to make sure those negotiations with other Chinese companies’ bear’s fruit for the company. According to “China Digital Times”, Google mainly failed to negotiate the necessary syndication deals with Chinese partners (Beach 2011. 141).
Although Google claimed that the Chinese government was behind its failure in China it should have been the duty of negotiating experts to make sure that the deal was renegotiated because China is a country with a long term potential of doing business.
Therefore with Google not participating in the Chinese market other competitors may use this fact to compete against Google and destabilize Google’s business model. The amount of revenues that could be collected from China by Google could help the company conduct research and development and launch new product or fund their strategies (Kotler 2003, 43).
Data Privacy and security problems
Many users of the internet usually prefer that their anonymity be maintained and that their right to privacy be respected. Personal data belonging to users of Google products and software is only anonymized for up to 9 months thus leaving users of Google vulnerable when this timeframe expires.
Therefore other individuals such as employees and even hackers can access the information and use this information to their advantage and even commit fraud or leak information which was considered private and confidential.
Techniques that can be used to identify the problems
In order for Google to correctly identify the extent to which this problems are likely to affect their business model the company could carry a market research thorough which a SWOT analysis and the use of porters model to accurately explain to what extent competition and rivalry can affect their business objectives (Kotler 2003, 88).
A SWOT analysis for the company, a competitor analysis and an industry analysis would assist the company understands itself better.
Additionally, Google will be able to compare itself with other close competitors and moreover, understand what the industry expects of software and internet companies who participate within the same industry such as such as Google, Mozilla, Bing, Baidu, Apple and others.
The advantage of using a SWOT analysis is that both internal and external factors that influence a company’s business performance can all be determined so that the company can eliminate all weaknesses and threats and therefore maximize revenue streams and overall company performance by tapping into opportunities and strengths that the company possesses (Kourdi 2009, 122).
It is therefore the duty of Google to conduct vigorous research to accurately identify elements of its SWOT analysis, Competitor intelligence reports and overall industry reports.
Figure 1: The link between strategic planning and commercial success.
The diagram above suggests that by putting in place strong strategy and executing it efficiently organizations face almost 100% certainty that they can succeed but if the strategy is weak it is more likely that the strategy will not succeed.
Consequently, it is true to conclude that if Google goes forward to carefully conduct research and gather relevant data it will be possible for the company to address the route course of their problems, and become a more formidable company (Czinkota 1998, 44).
The results of the SWOT analysis, the competitor intelligence reports and industry reports will be crucial in making the necessary recommendations that will help reduce the impact that may arise out of the problems that Google faces.
In order for Google to be more in touch with the feelings, taste and preferences needs and queries of their customers it is thus a must that the company puts in place a highly efficient customer care structure.
A good customer care strategy will make sure that any shifts in customer care behavior are detected early and thus appropriate action will be taken to make sure that the customer is happy and satisfied.
The customer care services may either be formed in various regions in the world to deal with the large number of consumers or even outsourced to one single country where cheap labor can be found.
Due to the stiff nature of competition within the industry Google should therefore embark on establishing a competitive intelligence unit who will work hand in hand with the strategic development department. This move will enable Google be able to continuously monitor and evaluate their strategy in a real-time basis and thus make any changes depending on the actions of the competitors.
Furthermore Google can alternatively look for other options which may allow it to collaborate with its more hostile partners who do not like the fact that Google has entered into their business field.
Google should also step up its negotiations with the Chinese government and give in to reasonable demands because their absence in the Chinese market can injure their corporate ambitions. Furthermore if this option does not work Google can alternatively look for means by which it will enter into a collaborative business with Baidu thus making their presence certain in China.
Following many complaints and lawsuits concerning Data Privacy and security problems, Google should put more effort and force its developers to come up with techniques that will allow the company to successfully develop methods that would protect the security of all customers whom use their products.
Evaluate the pros and cons of various action alternatives
The advantage of carrying out vigorous research through a SWOT analysis, a competitor analysis and an industry analysis would give Google Leverage that would enable the company to set out the appropriate strategy. Information is power and with power strategic heads of a company can more effectively put in place the right strategic choices.
The dangers that are attached to carrying out strategic changes in the absence of research may offer a cheaper option but may result to weaker strategies that may obviously fail in the process of execution (Kourdi 2009, 122).
Research makes it more possible to gather accurate and unbiased information on the competitors, the company’s internal and external environment together with competitive intelligence information.
But if the company sees that it lacks the capacity for it to carryout research by itself, then the company should outsource and contract other companies who have more experience to carry out research on their behalf (Katakota & Robinson 2001, 133).
Although this may be the most expensive option it is far the best option because third parties are more likely to be more unbiased and professional in their work depending on their previous track record.
Google’s current and future success largely depends on the way the organization will chose to tackle the various problems that are affecting its current business model. Many businesses face problems but the role of planning and setting strategies is a very important issue as it assists businesses resolve their problems and emerge victorious when crises hit their organizations.
It is thus the role of the company’s leadership conduct research and use the data which they have obtained from carrying the research to make valid and efficient strategies that would make sure that the current problems are solved so that the organization can move forward and even beat its competitors in business.
The failure of organizations to take part in strategic planning may lead to loss of market share and revenues hence prevent a company from achieving its mission and vision.
Bhupendra, R. (2011). 10 Reasons why Google may fail in the Future. Web.
Beach, S. (2011). Google’s Future in China Uncertain. Web.
Boone, L. (2010). Contemporary Business. NJ New Jersey: Wiley & Sons.
Czinkota, R. M. (1998). Trends in international business. Malden MA: Blackwell Publishing.
Katakota, R. & Robinson, M. (2001). E-Business 2.0 Roadmap for success. NJ New Jersey: Pearson Education.
Koontz, H. & Weihrich, H. (2009). Essence of Management an International Perspective, New Delhi: Tata McGraw Hill.
Kotler, P. (2003). Marketing Insights from A to Z: 80 concepts every manager needs to know. New Jersey: John Wiley & Sons Inc.
Kourdi, J. (2009). Business Strategy: A Guide to Effective Decision Making, (2 edn), New York: Economist books.