Google Internal Environment and PESTEL Analysis

Google Internal Environment and PESTEL AnalysisABSTRACTThe purpose of this project is to strategi come up toy analyze a multinational confederation of our choice. Our case study is Google Inc. which we will analytically break down, using various sources. We chose Google because we found really interesting delinquent to the detail that non and(prenominal) it is the biggest internet search engine to date, but overly a pioneer in its industry. Based on existing books and vane references, will try to analyze its internal and the external environment.INTRODUCTIONGoogle has occupied the dominating position in its industry since the beginning ascribable to its uncomparable ingathering which is a declaration of its unparalleled working(a) environment. It has gone on to attain the largest shargon of the online search engine market as it provides its users with a fruit that is difficulty substituted even though at that place are numerous competitors. By analyzing the internal a nd external environment of the corporation, it is evident that Google is running a well cover machine, paying attention to even the least significant detail in order to ensure that it provides a prompt and reliable product to its customers.HistoryGoogle was founded near 1995 by Larry Page and Sergey Brin piece they were still university students. The idea was based on pages PhD research project called Backrub. This involved mathematical properties of a link structure on the internet. Having indexed over 50 million web addresses, Google was formally incorporated by 1998.it has such significant influence that a company could either greatly benefit, or be seriously harmed depending on the search rankings. Besides being the top search engine, Google features other functions such as Gmail, Google Earth and Google Docs. Moreover, Googles extreme success and unbroken expansion and development are due to their unparalleled working environment which not only aims to keep ein truthone ha ppy, but successfully does so. (Google, 2011, Keller et al, 2008)INTERNAL ENVIRONMENTResources ability TheorySourcesThe combination of sources and capabilities, defines a good strategy of a company. Google achieved to combine ideally its sources and capabilities, as we can see that its strategy, is working. Ones company resources can be divide to tangible, intangible and human. Referring to Googles tangible resources are the financial sources from advertising companies, raw materials, mechanical equipment, modern facilities, ripe design of homepages and hardware. As for the intangible resources they are, high-pitched technology, domainwide genius with users and suppliers , hale brand name , huge data-base, patents homogeneous Google Earth and eco friendly Blackle. Another measurable intangible factor is the business culture of Google which does not only care about the service of users but also cares about vast working environment. Moreover as for the human resources, Goog le has a large amount of high-skilled and receptive staff. Furthermore, another important factor of Googles success is its know how which cant be imitated by any other rival firm. In addition all employees are experienced in the market of study based service. Google has strong leadership combined with training which resulted in loyal staff. (Christodoulou, 2010, David 2007)CapabilitiesThe combination of sources, tangible, intangible and human resources relieve oneself the appropriate capabilities. Capabilities separated as marginal capabilities which cannot easily imitated and fundamental capabilities which can. By combining its resources, Google creates some very effective capabilities. Flexibility, quick response and speed of distributing the education are produced by the combination of huge data base with the highly advanced software. These capabilities are fundamental because they cannot be copied easily. Another fundamental capability of Google is innovative and effective human resources management. This is also a result of good leadership with highly skilled and specifically trained staff. Furthermore, the combination of human resources with the software and innovations has the result of design capability, which is imitated. The right transmission of information between leadership, employees and the culture of Google results in good communication, as a fundamental capability. The combination of the right organization in human resources with the program system creates the fundamental capability of quick responsiveness to customers. (Christodoulou, 2010, David, 2007)Competitive advantageValueGoogle provides a high value product which satisfies its consumer needs, some(prenominal) they whitethorn be, quickly and efficiently. A costumer can use its search engine when looking for information on literally anything as well known, or not, that would be. This is what keeps it in its market dominating position as the leading search engine as it provides such a rare product. Furthermore, Google uses a program call AdSense which is vital I order for businesses to generate income. This is due to the fact that there is more traffic, hence more exposure, which consequently leads to an increase in sales. (Morrow, 2009, Thompson and Strickland, 1998)RarityGoogles quirk can be seen even on its homepage which is unlike any of the rival companies. at that place is a 28 word limit policy for the homepage, meaning that it is the only one that which is completely clutter free, letting customers focuses on what they want to use the product for without any distractions. This in turn shows that Google inc. wants to provide a high feeling product that take ins consumer needs, rather than trying to gain profit from annoying advertisements .Furthermore, the relevancy of the results of the search engine make it evident that Google succeeds and reaches its aim to provide a product of the highest quality for each customer. Compared to its competitors, y ahoo and Microsoft, it is the most efficient and accurate when providing a consumer with the result. (Morrow, 2009)ImitablilityGoogles unique homepage has not been imitated by its competitors due to the fact that they are more enkindle in what consumers need to feel relaxed using this search engine, rather than profiting from advertisements. In addition even if competitors try to imitate Googles results, they would require an enormous database, extremely fast computer memory, and servers all around the world. Furthermore, Google try traces what you search each time and in a way gets smarter in order to provide you with the most pertinent results each time you search. It basically can tell what you are looking for even the word which sport been used has more than one meaning. (Morrow, 2009)SubstitutabilityThe fact is that Google has substitutes, such as yahoo, Microsoft, Ask and Bing however it continues to dominate the market as it provides the best product and therefore gainin g strong customer allegiance. (Morrow, 2009)Value chain receivable to the fact that Google provides information based services, which is a nonphysical product, its value chain differs from the traditional form. Their raw materials are the web users who use Google to search. The same users are therefore directed by text advertisements into their advertising partners websites where the sales occur, which is also the finished program. Furthermore, the search engine works in such a way that it keeps go into of the users previous searches in order to provide more relevant results in future searches, which in turn means that web users are directed to websites where there is more probability that purchases will occur. In addition, due to highly skilled and qualified staff, the dependency of primary activities on human resource is quite high and so causes an increase in costs. Operations, sales, distribution and services are conducted with the aid of Googles servers and its internal softw are, all of which contribute to the value chain as they increase the firms profit. It also spreads its operations internationally in order to be ceaselessly aware of changes which in turn suffice Google maximize its profit. (Morrow, 2009)Mission StatementTo organize the world information to make it universally accessible and useful From this statement we can see that Google Inc is not interested in profit maximization but strives to meet the needs of its customers with a high quality product. Also Google states that sharing information and giving access to it, so that every person in the world could incur whatever he needs from a source of his preference. (Morrow, 2009)EXTERNAL ENVIRONMENTPESTELPoliticalAs for the political environment, Google has few political restrictions. Firstly, one of the political problems that it faces is with the department of Justice, due to the fact that there are plenty of inappropriate content and classified documents. Secondly, it has problems wit h the Chinese regime, because of censorship of searching results. Google tries not to have problems with censorship globally, because of its cooperation with the U.S Government and the protection of personal privacy. For this reason, it has created privacy terms on its homepage, where users can find information. In addition, many countries of Asia have limitations on what can be searched, but mainly the majority of countries around the world do not have restrictions. (David, 2007, Morrow, 2008)EconomicalNowadays, there is an economic crisis all over the world witch significantly affects global sales. Furthermore, one of the countries that have been hit the most are the United States, where Google is located. However, this crisis has not affected Google, because it does not sell direct products, but services which are funded by advertisements. Also, the free provision of Google leads to an increase in its prevalentity, which in turn maintains its good relations with advertising fi rms. Finally, its excellent knowledge of the market allows Google to be able to do to any kind of crisis. (David, 2007, Morrow, 2008)SocialGoogles great advantage is that there are no social restrictions, because its services can be used by everyone despite age, religion, nationality and living conditions. Another advantage is that is not a seasonal company, for the reason that its services are always desired. Also, the development of technology and the trend of using earnings by dint of computers and mobile phones have increased in the last years, impacting Google expansion all over the world. Google has no geographical dependence because the technology of internet is general worldwide. An example of geographical power is that more than 115 countries use Google, many of which are not economically developed. Googles social environment is global, meaning that is a Multilanguage society. For this reason, Googles services have been translated into numerous languages. Furthermore, it allows access to sites which may be inappropriate or appropriate. However in many countries there is a prohibition to them due to heathen and religion differences. (David, 2007, Morrow, 2008)TechnologicalThe technology is always advancing, so this phenomenon makes Google expand rapidly. For this reason, it has to be updated constantly in order for it to follow its revolution. New technology in computers systems may aid Googles services to work faster and better, so it has to prevent its opponents from taking this clean technological knowledge. Another advantage of technology for Google is that the costs are decreasing, while the quality of the services that it offers is improving and the innovation are strengthened. It also improves the speed of information, the ways of communication and transportation. These reasons help Google to expand and more important to survive. (David, 2007, Morrow, 2008)LegalThe ratified environment is an issue that concerns everyone who uses the int ernet. Copyright is an issue that exists in legal environment because of the ability that third party persons and companies can copy pictures and steal information from others. As a result, Google has created a page with copyright information about what is legal and what is not. (David, 2007, Morrow, 2008)Five ForcesAs always analyze of five Porter forces play very important role for the study of business elements and contributes to develop the right strategy to be able to survive and become more competitive. (David, 2007, Morrow, 2008)Entry BarriersRegarding the search engines, they have accumulated a large amount of information on customer service. on that pointfore, Google updates its material, in order to compete with other online search engines. For a newly introduced company it is necessary to serve and meet its customers expectations and the services should be provided at high speeds with flexibility in search. When Google was established around 1998, there were other simila r companies like rube, AltaVista and Excite, which had big influence in the market place but Google achieved to dominate. The web environment of search engines is more enriched, compared with the past years and its more familiar for users. As a result, the entry of new firms is not such a big threat for existing companies, especially for Google. (Morrow, 2008)SuppliersThe main suppliers of Google are advertisements of companies, which expect to be popular in the world, so this factor contributes to the direct profit. Therefore, the negotiating power of suppliers is relative low, because Google is the pioneer of searching services. Over the years, technology evolves rapidly and because of it, Google achieved to install new software in mobile phones. But in this case the negotiating power is very high, because there is other companies software, like Microsoft with more experience in the market place. (Morrow, 2008)CompetitorsThe main soft touch of Google is to be able to face the co mpetitiveness and become dominant company in the world of search engines. The main source of income is based on advertisements, due to reliable information that is collected daily. Since 2007, Google noted an upward evolution with annual profit rate at 110%. The main competitors of the company are Microsoft and Yahoo which have significantly lower profit. For the achievement of their profits, trademarks like MSN and Live-search played very important role. The companys high market share gives it the advantage to improve the quality of information and make the search easier. As a result, Google creates successful advertisements rapidly in comparison with its competitors. (David, 2007, Morrow, 2008)CustomersSince 2007, almost entirely, the profits of Google come from advertisements. The strategy of the company is to obtain new and more advertisements, of which the profit is maximum 3%. So it accumulates the profit from many small advertisements. Many firms want to advertise themselves and users have the opportunity to find them through keywords. Then, the percent of profits increased, because it is considered as an extra service. This attracts many companies which results in Google buying power in low levels. (David, 2007, Morrow, 2008, 1999)SubstitutesIn recent years the world of Internet is the first option for the users, who search direct information. Due to the uniqueness and immediacy, there arent specific substitutes for data search. In order to Google to serve the users and become more competitive, with the help of some tools, classifies the data by date. The leading position of Google and the possible future entrance of competitors depend on the satisfaction of customers and shareholders. (David, 2007, Morrow, 2008, 1999)ComplementaryThe complementary goods are at one time connected with services of Google and depend on them as these are portable computers and mobile phones. Generally, it is an industry with restricted amount of complementary goods. (Dav id, 2007, Morrow, 2008, 1999)SWOT analysisStrengthsThere is a wide range of functions offered such as Google docs, Google earth, Gmail, Google translator and Blackle, besides its main operation as a search engine.Good reputation and strong brand nameLoyal customersGoogle has developed very well its know how,Googles efficient and prompt resultsPay high attention to the usersUnique product-serviceFriendly working environmentDoes not distract its users by flooding the homepage with advertisementsWeaknessesThe requested search does not always coordinate with the resultsYou cannot always find the information that you want in the fullest extentThe information is mostly in EnglishHackers create many dummy site with spamWhoever is interested in using Google for advertising purposes does not have a clear idea where it would be more profitable to place their advertisements as the cost or click charging is very confusingThere is a good deal of useless and invalid informationOpportunitiesGoogl e can expand by mergingUsing higher value context on the webCan increase the internet usageCan local vendors advertisements on every local searchIt can provide more hand-held devices to mystify a larger share of the marketIt can increase the advertising spending onlineThreatsThere are a lot of competitors and rivalsCensorshipA lot of legal trials due to users invasion of privacyThe confusing policy for advertisements may disappoint the potential clients and Google may start losing themIf it decides to follow its competitor by ever-changing it minimal user friendly interface it may lose a lot of its usersPrivacy issues regarding the contents ownershipIt can lose its brand loyalty if it merge with other large firms(David, 2007, Thomson and Strickland, 1998)FINANCIALGoogle is a company that has increasingly become popular since 2004. In recent years it has achieved to increase its incomes that helped it become a profitable company. Googles revenue is 99% from advertisement, because th e products that it sells are free to use. According to the financial statement, Google is better than its main competitor, Yahoo because, it has 2.4 times more of its revenue. Additionally, Google is more profitable than Yahoo as it manages its debts better. In recent years, Google has slowed down the sales growth, income growth, assets growth, the profit Margin and the return of assets as we can see in table 1. However, it is still at a good level and it does not declare to be in a downward path, because it is still first in sales. This is a result of its sloshed growth, as know that no company can achieve an upward course. Googles revenue is increasing annually, even if it is not at the same rate as previous years, however, it has never been less. (Morrow, 2009)CONCLUSIONTo sum up, throughout its progress, Google has kept its dominant position over its competitors in the information based services industry. Furthermore, it is very important to note that Google has not only been c onsistent when it comes to providing a product of the highest and quality, but is also constantly developing, adapting, but more significantly revolutionizing the industry. In addition, what makes Googles product so unique in comparison to its competitors is the attention that it gives to consumer needs in order to provide a reliable and difficultly substituted product rather than focusing on maximising its profit with every given chance which may compromise the quality of its search result its product. Having analyzed the corporations internal and external environment it is evident that Google pays attention even to the smallest detail to ensure that it will be the leading company amongst the numerous other online search engines and has been able to create loyal customers that are constantly increasing.SOURCES-BIBLIOGRAPHYMorrow, B. (2009)Internal Analysis of Google Inc., 22 February, 2009. Available at http//www.benmorrow.info/research/internal-analysis-of-google-inc Accessed 5 J anuary, 2011Morrow, B. (2008) External Analysis of Google Inc., 15 October, 2008. Available at http//www.benmorrow.info/research/external-analysis-of-google-inc Accessed 5 January, 2011Google (2011) Company Overview corporal Information.Christodoulou, I.P. (2010) Strategy Strategic Management Perspectives. PowerPoint slides Lecture handouts. University of Hertfordshire.22 December, 2010Keller, K.L., (2008) Strategic Brand Management. A European Perspective. 1st edn. England Pearson Education LimitedDavid, F.R., (2007) Strategic Management Concepts. 11th Ed. upper Saddle River, New Jersey Pearson Prentice HallThompson, A. A. Jr and Strickland, A. J III (1998) Strategic Management Concepts and Cases. 10th Ed. USA Irwin/McGraw Hill (International Edition)