The Sources of Googles Competitive Advantage - Assignment Example

Name Tutor Course Date Case Study: Google 1. What are the sources of Google’s competitive advantage? As the leading firm in its field, Google has been able to maintain a far much greater profitability than the average profitability of all others companies in this industry. In fact, the company has a sustained competitive advantage since its profitability has been above average for a number of years since its inception in 1996 (Hammonds 2009). There are several strengths specific to Google that have allowed the company to differentiate its products than its rivals. These include its resources and its capabilities. In terms of resources, Google has invested in some state of the art technologies that are unmatched by any of its rivals. These give the company an ability to perform any task without a limitation in technological capabilities. These ranges from powerful servers that are location all over the world, as well as some innovative technologies that have been designed and developed by the company’s team of inventive engineers. Since there is numerous loads of data and processing capabilities required to run a search engine, Google has acquired some custom high performance system which are exact cost-efficient, beating all its principal rivals in terms of costs (Hardy 2005). In additional, the company has gone ahead to acquire some already existing firms which are highly performing and offer unlimited opportunities for growth. These include Blogger, Orkut, Youtube, Andscape Media, Trendalyzer and JotSpot. In addition, Google possesses various intangible resources that offer it competitive advantage over its rivals. These include a strong brand name and reputation, which it has developed through its innovative and its efficient services. The company can bank on its brand name to launch new services and products, since it has earned the loyalty of the users. Google also has a number of most the competent and innovative minds in the field. These people ensure that Google is way ahead of any competition in terms of new products and service delivery. This is the reason why its services are unrivalled up to date, and any attempt by competitors to march their services finds Google on a higher level than the company was. Google also owns and runs various services that are unique to it. These have mainly been developed through acquisitions of well performing unique companies such as Youtube and Blogger. These companies are significant trademarks in their own fields. Having these companies has given Google another platform that its competitors do not have and cannot work to build within a short time. Some of them also have patented technologies, which is now proprietary of Google. There are also several capabilities that Google uses to its advantage. In terms of organisational structure, the employees have substantial authority to act as their own managers, and are given the opportunity to be wild in inventions. This has led to development of a highly efficient and inventive team that supports the operations of the company. The company also has a well-regulated hiring system that ensures that they have the right staff that they need. 2. What value does Google create for customers and advertisers? For a company that heavily relies on quality and efficiency of services offered to add and retain customers, Google must keep adding value to its services to ensure the users remain loyal, which in turn will bring in more advertisers. The users must always get the service that is unmatched elsewhere; while the advertisers always must get cost friendly services that will yield returns for them. To the advertisers, Google ensures that they offer efficient services, which are cheap and yield result. The company allows advertisers to pay only for effective ads, since the payment is not based on the number of ads that are displayed but on the number of clicks that an ad gets. Since the advertisers bid for advertisement space based on price and the quality of the ad that is determined by the landing page, it may result that the highest bidder does not necessary get his ad displayed on top. In such cases, the winner is allowed to pay just one cent above what the runners up was offering. The advertisers are able to get a real specific market, target certain words, or even constrained to a specific geographical location like a country. In addition, Google advises the advertisers on how to advance the transfer rate of site visitors. For customers, Google provides unique services that its competitors cannot match. Their best advantage is the simplicity in which they have made the search process to be, whereby their search home page is so easy for everyone to use. In addition, the Company also allows users to use an advanced search that can be extremely specific in getting the exact information, which they want to get. The search engine is far much advanced than any other search engine that is in use by other competitors. This is the reason why although the users can switch from Google without any losses being made, they choose to remain loyal. Google also offers a variety of services within its portal, which make it to be a typical Wall mart in technology. These include mail services, website hosting services, maps, and video sharing. There is also cloud-based software like Google Docs and operating systems like Google Chrome and Android. All these make users to have access to so many things under one portal (). In addition, Google allows customers to share in the lucrative advertising service, whereby they can put on show commercials from Google on their websites. This helps them to earn revenue as well and it helps Google to increase its sales in the form of advertisements. This is a win-win situation. 3. Apply the four building blocks of competitive advantage to Google. Analyse each factor by providing detailed examples from the case. In terms of superior efficiency, Google performs exceptionally well. One of the main reasons that it has low running costs is because it has some custom high performance systems, which have low-operation costs. This, coupled with bright talents in their fields, who must pass through tight selection criteria, makes the company to offer some extremely superior services while minimizing on their costs. The output is obviously some attractive services, which keep the users coming back again and again, and being loyal to the search engine. The advertisers flock in and this translates into additional income for the organization. The company also relies on independent people rather than the employees to develop its systems. These include placing of ads, populating maps on mapmaker and listing businesses on these maps. This leaves Google engineers to invent the systems while users are developing them with time. This translates to low costs of production. The employee productivity in Google is exceptionally high. This is because of various work relationship methods that the company has adopted. This includes motivating them and giving them some form of authority to adventure in inventions. Additionally, Google gives its engineers a chance to work on a project of their choice one day every week. This has promoted inventions, new ideas and innovations, which spark new level of growth. These forms of motivations make the engineers to be extraordinarily productive and motivated. This has been attested in the fact that the engineers from other competing firms must work for longer hours than Google’s in order to achieve the same productivity. High productivity leads to low costs in production. In terms of quality, Google stands out for its excellent services. The company invest a lot of resources in ensuring that they offer the best. This includes having the shortest time possible for the engine to return a search query, as well as ensuring that the results are ranked by relevance and usefulness to the user. This is what the users regard as quality in terms of service. In addition to the regular search results, is currently running a service called instant search, which helps to predict what a user is searching and gives suggestion for other related searches. Innovation has been the driving factor for Google. Various innovations have differentiated Google from its competitors, and these never cease to stop as day-by-day Google keeps rolling out new inventions and innovative products, leaving competitors with little time to catch up. Google ensures that there is innovative attitude by hiring young and wild programmers who are not afraid to venture into new frontiers or territories in coding and programming. This is what has kept Google rolling out additional features to its existing products at a rate that the competitors cannot keep up. Customer responsiveness must be catered in when it comes to search engines. Since, the search is supposed to direct a user to where he or she wants to go to; it is usually the first page that a user will start with, from a blank screen. Time is of the essence here since the user will be in most cases idling just as the engine returns a search query. Google has worked hard to reduce this time just a fraction of a second. Currently, there is an instant search function, which brings in search results just as the customer types. This has reduced the responsive time to almost zero seconds. Moreover, the sophisticated search characteristic provides an opportunity for an individual to look up for anything with a near pin accuracy. This is done manipulation of algorithms that determine words to search for, the ones to avoid, the exact phrases to consider and the geographical location of the pages to be searched. 4. What business level strategy is Google pursuing? Although there seems to be several strategies that Google is using in order to increase its market share and maintain the lead position, the most dominant strategy is through differentiation. In terms of products, the company is truly much vibrant in coming up with new technologies which glue the customer to its network. From the time when it came into business, Google has been adding new features to its search engine that make it more effective and more user-friendly. These are the key factors that keep the customers loyal and keep it breast of all the advances that the rival companies are making. The products are also differentiated to suit every different market. This includes an advanced search service, which allows users who want remarkably specific information to find it in ease. The advanced search feature is the only one of its kind among all the other search engines. This level of differentiation also applies when it comes to other services besides the custom search services. There is a wide range of services offered by Google, which ensure that all forms of users have something to do on the Google portal. From email services, chatting, sending short messages, sharing videos, hosting websites, blogging, translating websites, and word processing, these services are all offered by Google. The search page is offered in different languages in different locations to make it easier for users. This is the reason why while google.com is offered in English, google.fr is in French, google.de is in German and google.jp is in Japanese. Users from these and other regions have an opportunity to user the search service in their own language. In addition, Google has strategically positioned its servers in different locations in order to make access easy from different parts of the world. A search query from Kenya would be directed to a different server from a search query from Brazil or China. Google is therefore intensely committed to differentiation. The segment niches are also segmented, although not to a great extent. While the main page gives a web search from across all available pages, there is a specific search service for scholars where they can find useful information and journals. Those seeking for locations or direction can search for maps, while there is also a search service for those who want to find books to read or purchase. This must be done for the company to reach every market segment. 5. What corporate-level strategy and international strategy has Google implemented? In terms of international strategy, Google is committed to pursuing a transnational strategy. In this approach, the company aims at creating access to Google services from within the local countries or geographical locations. In this, Google has widely invested in setting up servers in different parts of the world so that information will be accessed from a closer location, reducing the time taken to load pages and transfers enormous volumes of data. The search pages are also customized from one country to another, achieving more local responsiveness. Consequently, Google has also centralized many of its operations in the United States. This is where many developments take place and many of the work are carried out. This makes cooperation easier since the developers can share information easily and more conveniently. A combination of these approaches makes Google’s approach a transnational one. In this approach, there is efficient use of the resources since part of operations is centralized, while at the same time enabling the search giant to reach every customer in an efficient way. This has contributed to immense growth of Google. Works Cited Doyle, Bob. “Online Office Space.’ eContent 30.3 (2007): 34 Malseed, Mark and Vise, David. The Google Story: For Google's 10th Birthday. New York: Delta Trade Paperbacks, 2008. Hardy, Quentin. ‘ALL Eyes on Google.’ Forbes Global. 6.11 (2005): 20-28 Hammonds, Keith H. ‘Growth Search.’ Fast Company. 69.1 (2009): 74-79 Girard, Benard. The Google way: how one company is revolutionizing management as we know it. Carlifornia: No Starch Press, 2009. Read More