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Case Google Vs Microsoft

This document compares the business models of Google and Microsoft. It provides background information on when each company was founded, their vision statements, market capitalization, revenues, and employee headcounts. Google's model is to offer applications like Google Docs and Drive for free to attract more users to its search engine, then charge advertisers for targeted ads. Microsoft's model involves licensing fees for its Windows OS and Office software suite, as well as renting cloud-based office applications. The summary compares the breakdown of each company's revenues by business segment from 2014-2016.

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2K views21 pages

Case Google Vs Microsoft

This document compares the business models of Google and Microsoft. It provides background information on when each company was founded, their vision statements, market capitalization, revenues, and employee headcounts. Google's model is to offer applications like Google Docs and Drive for free to attract more users to its search engine, then charge advertisers for targeted ads. Microsoft's model involves licensing fees for its Windows OS and Office software suite, as well as renting cloud-based office applications. The summary compares the breakdown of each company's revenues by business segment from 2014-2016.

Uploaded by

boihutagalung
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Competing On

Business Models:
Google vs. Microsoft
ANA KRISTIANA – BOI HUTAGALUNG
MICROSOFT
▪ Founded by William H. Gates III and Paul Allen in 1975
▪ Vision Statement “to help people and businesses throughout the world
realize their full potential.”
▪ Has 122 subsidiaries worldwide (2019)
▪ Market Capitalization: USD 1.04 trillion (2019)
▪ Revenue: USD 125.8 billion (2019)
▪ Headcount: 144,106 People

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GOOGLE
▪ Founded by Larry Page and Sergey Brin in 1998, form an idea to search
engine that analyzed the relationship between websites would find better
results than existing search engines.
▪ Vision Statement:” “to provide access to the world's information in one
click.”
▪ Market Capitalization: USD 835,9 billion (2019)
▪ Revenue: USD 38.944 billion (2019)
▪ Headcount: 102.000 People

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CASE SUMMARY

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CASE SUMMARY

 The Microsoft Model: A new approach


1. licensing fees charged for use of the Windows operating system
and the Microsoft Office suite
2. Rental of it’s cloud based office

 The Google Model: Give it Away for Free


1. Google offers its applications software Google Docs and hosting
service Google Drive for free to induce and retain as many users
as possible for its search engine
2. Google can charge advertisers for highly targeted and effective
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ads
CASE SUMMARY

Breakdown of Google’s Revenues by Business Breakdown of Microsoft’s Revenues by Business


Segment, ($ millions) 2014–2016 Segment, ($ millions) 2014–2016
Revenues 2014 2015 2016 Revenues 2014 2015 2016
Productivity and
Google Properties 45.085 52.357 63.785 25.976 26.430 26.487
Business Process
Google Network
14.539 15.033 15.598 Intelligent Cloud 21.735 23.715 25.042
Members’Websites
Total Advertising More Personal
59.624 67.390 79.383 38.460 43.160 40.460
Revenues Computing
Total Google Revenues 65.674 74.544 89.463 Corporate and Other (338) 275 (6.669)
Other Business Unit
327 445 809 Total Revenues 85.833 93.580 85.320
Revenue
Total Revenues 66.001 74.989 90.272
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SWOT Analysis

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SWOT Analysis (Continue)

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BCG Matrix Analysis

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BCG Matrix Analysis (Continue)

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DISCUSSION
Let analyse and formulate a solution
How is Strategy different from a business
model? How is it similar?

Strategy is different from a business model in that business model describe the
means that a business has to use so as to create and deliver value to the customers
and to collect revenues from the customers so as to make profits. Business models
could vary from business to business based on the business structure and the
method for maximization of the revenues and profits
Business strategy on the other hand refers to the methods used by the businesses to
achieve the mission and the objectives. For example the business strategy could
describe how a firm will engage the competitors, identify the customer segment and
respond to the market environment.
The business strategy and business model are similar in sense that the business
model is part of the overall business strategy. Both the business model and the
business strategy relates to how the business is going to achieve its goals and
objectives. 14
Apply the why, what, who and how of business models
framework to describe Google’s and Microsoft ‘s respective
Business Models. What Conclusions do you draw.

They have different business models but are still competitors. For the
How section of the framework, both a similar in that they offer most of
their services through the cloud. That way users can access them from
anywhere, enhancing their experience with each company. This is the
same for the what aspect as well. Microsoft has to have a cloud
offering so that users aren’t subjected to the use of PC only access.
Google users can access their cloud from anywhere, Microsoft had to
move their focus to this for users.

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Why are Microsoft and Google becoming increasingly direct
competitors?

Microsoft and Google have increasingly become direct competitors due to


various reasons. First the two companies have started adopting each other's
business models of earning. For example Microsoft introduced Bing which
offers direct competition to Google search engine.
The two companies have also increasingly adopted the same strategy such as
innovation strategy which has resulted to developing of the same applications
that has increased competition among the two companies. For example,
through innovation Google was able to support its own file types and it's thus
able to support the Google docs without having to rely on Microsoft. Microsoft
also came up with Office Live Workspace (OLW) which allows the Microsoft
Office documents to be shared online.
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Indentify other example of companies that were not competing in the past but
becoming competitors. Why are we seeing such a trend?

Other companies that have increasingly become competitors include Apple Inc.
and Nokia. Apple Inc. initially focused on computers and software but in the
year 2007, the company was renamed to indicate the focus to consumer
electronics including the phones. By introducing the iPhone in the year 2007,
the company was able to compete more directly with Nokia. There is now
intense competition and Nokia has also introduced online music stores to
compete with the Apple iTunes.
Why are we seeing such a trend? The reason for such trends is because
companies are shifting the business strategies and business models to be able
to increase revenues by getting into the market space of the competitors

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What recomendations would you give to Satya Nadella, CEO of Microsoft
to compete more effectively againts Google?

To be able to compete more effectively and favorably with Google,


Microsoft need to develop better apps like those of Google that can be
fast and reliable. Microsoft needs to be more innovative to be more
unique in its business model and strategies so that it is able to be more
preferable to the users. The company needs to refine and develop its
products more so as to capture the mainstream customers.

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What recomendations would you give to Sundar Pichai, CEO of Google to
compete more effectively againts Microsoft?

To compete more effectively with Microsoft, Google need to continue


innovating more and more applications and developing the capability
of the search engine to be able to sustain its competitive advantage
against Google. Also Google need to enhance more its existing
applications such android to sustain its competitive advantage.

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“
From this case, the lesson learned is, it
is important for the company to know
where they are in the market. From
knowing that, the company could
improve the current performance by
elaborating what the market's need and
want with the product of the company.
From that on, it can be uniqueness of
the company and it will become the
competitive advantages for facing
competitors in the same market as our
company.
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THANKS!
Any questions?

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