GOOGLE’S CORPORATE STRATEGY 1

Google is now Alphabet, but what’s the Corporate Strategy?

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GOOGLE’S CORPORATE STRATEGY 2

Google is now Alphabet, but what’s the Corporate Strategy?

Introduction
Google is one of the greatest and leading tech firms which are widely used and
recognized globally. The company focuses on the user, believes in continual growth, has speed
as its priority, and has hunger for improvement. Apart from issues like internal development,
acquisitions and other forms of alliances, there also various forms of corporate diversification
strategies. Purposely, the paper discusses Google’s corporate strategy, its ability to create
competitive advantage, various threats affecting the business, and a determination of how Google
should delineate its corporate boundaries
What is Google’s corporate strategy? Does Google have a clear vision of what it wants to
become?
Google’s primary mission is to help in collecting and making it accessible and useful
globally. Through its search engine, www.google.com, the company can grant individuals access
to different types of information like news, weather, movie schedules, recipes, case studies,
stocks, and maps, among others. Google has a corporate strategy that can be looked at through
various divisions or different levels such as the firm level and business level. At the firm level,
strategies are designed with consideration of new start-ups, strategic alliances, and acquisitions.
At the business level, the company’s strategy is directed towards a broad differentiation of
complementary products which function to enhance brand awareness. Generally, Google’s
corporate strategy is to foster creativity and enhance brand loyalty through visionary reforms
while creating an open-source environment (Levy, 2021). Under that strategy, various strategies
indicate what the company wants to achieve such as its growth, stability, or retrenchment.
According to Google’s marketing strategy, it is significant to note that the company is not
using any advertisement for its business to prosper but instead it is using social media networks
to reach, attract and maintain a large pool of its intended customers. Through the strategy,
Google has been placed first and ahead of others in the industry due to the viral nature of its
marketing. Besides, the company developed a production and purchasing strategy as their new
and unique promotional program and entails paying a cost-per-click model. On the other hand,
the company also pursues growth and stability strategies where it focuses on sustainable growth
objectives and sets its course steady by relying on its strengths to create a competitive market
advantage.
To foster creativity, the company is investing in the new technologies as a preparation for
the changing customers’ anticipations. The advantage of Google’s information technology relies
on its ability to develop high-performance systems which are cost-effective and can result in
enormous workloads. Because of that, the company benefits from huge cost advantages as
compared to its competitors such as Yahoo, Amazon, and Microsoft.
Generally, the company has certain strategic alternatives like defending the present
market share, market, and product modifications. If the company implements such alternatives, it
will maintain surviving the tough competition. Such strategies would enable the company to
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solve the product challenges that they currently face. However, to achieve such strategies the
company needs a huge investment. Accordingly, the company should consider implementing a
market modification strategy since it is the most convenient as compared to others. Google can
only enhance its impressions by boosting its frequency of searches by current users and the new
customers as well as those that switch from one engine to the other. Clearly, from its genuine and
achievable strategies, Google seems to be clearly envisioned towards what it ought to achieve.
Use Porter’s Essentials Test to determine if this strategy creates a competitive advantage. If
so, how? If not, why not?
According to Porter, the attractiveness test reviews the appealing nature of the new
market for the firm to penetrate, while the cost of entry test evaluates the weight between the
potential profitability of the market and the cost of entering, and the better off test seeks to
establish if the organization will be better off from the diversification and acquire some level of
competitive advantage. Therefore, based on this test, it is plausible to note that the company’s
strategy can create a competitive advantage. Google’s success is expected to rely on creativity
and hence it has to concentrate on obtaining new competitive advantages in fast-cycle markets.
Since Google has a unique technology that cannot easily be copied, it is rendered expensive and
thus its innovation or creativity will remain a secret for quite along. With long-term secrecy,
Google will acquire a competitive advantage over the rivals and keep the market competitive.
The company will also a high market share and hence achieve customer brand loyalty while still
monitoring its operations to give the clients reliable service. The sustainability of its competitive
advantage depends on its ability to continuously increase the efficiency of its resources. Since
the pace of innovation and dynamism is unforeseeable in fast-cycle markets, placing Google in
such a market makes it mandatory to undergo accelerated innovations to gain profits and acquire
a competitive advantage as well.
For the case of slow-cycle markets where firms are uniquely separated from imitators for
a longer period and making imitation experience, Google can expect its competitors to tackle the
arrival of a new product. Google must maintain its innovative capabilities to survive even in the
slow-cycle markets to acquire market share. However, in such markets, Google finds it
complicated to achieve competitive advantage over the rivals but, in the long run, and for a long
time, it will be gaining profits as the rivals will not widely know it as replication of its
uniqueness is an experience (Levy, 2021).
Look beyond the conventional sources of synergy and consider complementarities,
bargaining power, and rivals. What threats does Google face?
By considering factors such as complementarities, bargaining power, and rivals, Google
faces various related challenges. Google’s suppliers have low bargaining power. Being a
software business, its suppliers have traditionally maintained their moderate or low bargaining
power hence those who supply hardware products made by Google such as Chromebook and
smartphones find it unique and difficult to supply or make sales. The suppliers’ bargaining
power is weak because of the high availability of supply and their large population. However,
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supplier’s low bargaining power is also advantageous in the sense that their limited involvement
in the provision of Google’s products and services is cost-saving.
On the other hand, the bargaining power of customers is weak hence limitedly
influencing the strategic management decisions of the organization. Factors leading to the low
bargaining power of the buyers include the small size of customers, high and increasing demand
from customers, and moderate quality of information to potential buyers. The minimum
influence exerted by each buyer of Google’s products and services negatively affects the
industry.
The other threat to Google’s business is based on the availability of substitutes. The
company is facing the relatively moderate level of substitution which includes various
advertising channels like TV, radio, and other alternative technologies to the firm. Various
factors contributing to such level of threat include existing costs of switching the firm’s product
for the substitutes, greater existence of substitutes, and substitutes’ small performance-to-price
ratio (Weissenberger-Eibl et al., 2019). The threat of substitute products results from the top tech
brands such as Facebook, Apple, Microsoft, and Amazon. The threat is higher in areas like the
cloud industry where firms such as AWS and Azure provide a wide range of substitute goods and
have a large clientele than Google. Due to the moderate or high switching costs, customers tend
to move from the firm’s products such as the advertising services to substitute ones. The
existence of substitutes implies that clients have a variety of options they can shift to in case
there is a need to switch from Google (Sadowski et al., 2018). Even if such substitutes such as
television have a low performance-to-price ratio as compared to the firm’s online services and
products, they may result in huge damage to brand loyalty. Unless the company diversifies into
newer areas, reducing the risk of substituting will remain to be a nightmare.
The other threat involves the level of competitive rivalry in the industry. Google is facing
strong competitive rivalry in the tech industry which limits its growth in operations and services.
Since the leading players in the tech industry are highly imposing highly competitive practices,
Google feels the pressure in the battle for market share which continuously grows fiercely.
External factors contributing to such level of competition include a large pool of organizations in
the IT industry, high diversification level in such firms, and minimum switching costs. The
competitors to Google Company span different industries with the most impacts significantly
influencing the business. Google competes against big firms such as Yahoo, Apple, IBM,
Amazon, Snap, Twitter, Facebook, and Microsoft. Firms like Amazon are the greatest spender on
research and development while other firms also invest heavily in the same. However, Google
maintains its high innovative nature as its focus on improving its commodities to give good
quality is still lively (Mazzei & Noble, 2017). Other players that are dominant in areas like
advertising, search and cloud services are also very aggressive concerning growth and market
share. The battle for market share is extremely high in the industry.
Does Google need to refocus? How should Google delineate its corporate boundaries and
which businesses, or products would you recommend abandoning or divesting, if any?
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Google should refocus. The idea behind refocusing is that all highly recognized
organizations require to review and reconsider what they are doing since nothing is constant
apart from change therefore every firm has to constantly take in new databases and assess them.
Also, Google should refocus to aid in targeting more customers and gain wide market coverage.
Google ought to delineate its corporate boundaries by industry and clients each corporate
area serves. Corporate boundaries are those of municipal corporations while delineation involves
the action of indicating the exact position of a border. Google should honor its confidentiality
agreements with all employers. Google should also decide on the type of projects to be made
public and the ones to be kept private. I recommend that the company should consider
abandoning or divesting include cables, training and support, system integration, installation, and
debugging.
Conclusion
Summarily, the paper discusses Google’s corporate strategy, its ability to create
competitive advantage, various threats affecting the business, and a determination of how Google
should delineate its corporate boundaries. Google’s corporate strategy is to foster creativity and
enhance brand loyalty through visionary reforms while creating an open-source environment.
Based on Porter’s essential test, it is clear that the company’s strategy can create a competitive
advantage. Various threats experienced by Google include low bargaining power for suppliers
and buyers, high availability of substitutes, and strong competitive rivalry. Finally, the company
needs to refocus and delineate its corporate boundaries by honoring its confidentiality
agreements with the employers.
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Reference
Levy, S. (2021). In the plex: How Google thinks, works, and shapes our lives. Simon & Schuster.
Mazzei, M. J., & Noble, D. (2017). Big data dreams: A framework for corporate
strategy. Business Horizons, 60(3), 405-414.
Sadowski, C., Söderberg, E., Church, L., Sipko, M., & Bacchelli, A. (2018, May). Modern code
review: a case study at google. In Proceedings of the 40th International Conference on
Software Engineering: Software Engineering in Practice (pp. 181-190).
Weissenberger-Eibl, M. A., Almeida, A., & Seus, F. (2019). Systems thinking approach to
corporate strategy development. Systems, 7(1), 16.p