Answer: Mission statement is the reflection of the role organizations wish to play in the society and they give an overview of the motive behind establishing an industry and the goals and objectives of that industry.
Business strategy means to foresee the goals of an organization and to develop methods in reaching those goals.
The name Google is derived from the mathematical term “googol”. Google was established with an intention to make worldwide information to be accessed easily by the users and to offer users high quality service. The mission statement of Google reads as following:
“To organize the world’s information and make it universally accessible and useful” (Google, 2010)
This mission statement gives an idea of how Google wants to conduct its business. This simple motive of Google has proved beneficial for the organization and reaped benefits and also made Google to have a top hand over its rivals. Google helps the users in getting the most relevant information. The search engine giant has not confined it; instead it came up with innovative projects like Google maps, Google images, Google earth etc. Google doesn’t charge users for using these technologies. To generate revenue Google developed two flagship programs by name AdWords and AdSense. Ad Words makes it possible for the businesses to place their ads on Google and its associates at a nominal price of 25 cents per thousand impressions; whereas Ad Sense is for the advertising to particular users and also to share the revenue with associates. This strategy created a Win-Win situation for both advertisers and also the publishers; which increased the company’s revenue and also made Google the most sought after website to advertise. To develop its services Google encourages and relies on customer feedbacks, employees are recruited for the very purpose of reading those E-mails and forward it to the concerned department. The urge to expand its horizons has made Google to take up projects which only have a vision and little scope. The founders have come out with a statement in their IPO prospectus that the company will be funding only those projects which have a 10% chance to earn billion dollars over the time. The willingness to take calculative risks has made Google to survive in these most challenging times. Google always relied on customer satisfaction and made sure that users are getting most accurate data. The company went global and established branches all over the world and started offering its services in local languages also, this move helped the company gain an advantage over its competitors.
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According to comstore.com in 2008 Google tops as the internet search engine with a market share of 61.8% [Barbara Farfan, 2010].Fortune magazine described Google as “Internet Services and Retailing Company.” The retailing part of the company is very small and the focus of the company remains only on those products and services which can be made available to the end-users online for free and can pull out revenue from the companies. The ability to build defined strategies and to implement them has made Google a leader in online business.
[Google, 2010,”Company Overview”, retrieved from http://www.google.com/corporate/ on 16th June 2010]
[Barbara Farfan, Google Profile – Mission statement, History, Founders, Name culture& Quotes, retrieved from http://retailindustry.about.com/od/topusretailcompanies/p/googleprofile.htm on 16th June 2010]
2. How does Google’s information systems strategy support its business strategy?
Answer: Information systems strategy involves understanding the business requirements of an organization and then planning the IT requirements accordingly.
Google promotes creativity and innovation among its employees. It also encourages employees to come up with new ideas and to dedicate 20% of the time on their own project. This proved beneficial as half of the new project launches came from that free time only. For example :While finalizing a new project both the team and the management meet in huge conference room, the right of the wall is used to digitally project the latest features and the left side of the wall is used for the employees to put down their suggestions and thoughts in finalizing those features. Google has given its employees the flexibility to choose from a variety of computers and operating systems to work on and it also made sure that employees can gain access to information regarding the projects undertaken by the company at different locations via the intranet; this move helped employees to coordinate with their colleagues who are on the same project or to connect with those people who share the same vision and ideas. To develop the required IT infrastructure the IT department maintains a balance between buying the products from outside vendors and developing its own software; for example the company purchases Oracle’s software to maintain the accounts; whereas when it comes to manage Customer relationship management Google developed its own software. Although the management makes data available to all the employees, it also makes sure that the data is protected from being misused or used by unauthenticated users. Google also encourages open source software’s by using them. It also encourages students to develop new software’s by providing with internship programs. This way the company can get new ideas which can be useful. Google develops common applications like Google Apps Which can be used for both internal and external purposes also. The search engine algorithm is updated continuously so that information retrieval could become more accurate. The engineers made sure that the information retrieval time for the user becomes less. Google follows a Round Robin policy this helps in load balancing the load on server. Google’s servers are divided into several types and each server is assigned a specific function.
The nature of business makes Google to focus on security aspects and makes it critical for Google. The formula of master search algorithm is kept secret. Instead of implementing strict policy measures, the company makes sure that the infrastructure of the organization itself is secured. Emphasis is laid more on detective and corrective controls. Over 150 engineers are employed for providing information security and maintaining the security infrastructure of the organization. These engineers regularly look out for viruses, spyware. Google also uses a strange intrusion detection system to avoid security breach.
[Retrieved from KERI E. (2010), Rosewood New Jersey: John Wiley & Sons]
3. How does Google’s organizational strategy support its business strategy?
Answer: Organizational strategy can be defined as the organizations design and also the decisions made by the organization to identify, set up, bring together and also to control its work processes.
The three most important organizational strategies of Google are:
1. You’re brilliant, we’re hiring: The founders of the organization believe that it is intelligence over experience that matters a lot. The recruitment standards of Google are set so high and while recruiting the company makes sure that the candidate is better than at least one of their current employees. One more standout policy is Google makes no use of hiring managers which other companies do.
The above pictorial representation shows the hiring process in Google. Two types of strategies are followed for recruiting, the blue line indicates: Hire-above-the-mean and the orange line indicates: Hire-above-the-min. The founders of the company believe that every employee plays a crucial part in the success of the organization [Peter Norvig, 2006]
2. You can make money without doing evil: Google believes that money can be generated even in honest traditions also. Money they generate come by offering companies with search technology and from advertising. The managers have set up some guidelines for those who wish to advertise on Google so as to ensure the user’s hassle free navigation on the site. Ads are not allowed to display on the results page unless they are important to the content that is searched for. The company believes that ads are best served when they are having relevance with the content. Google doesn’t allow pop-up advertising which acts like a barrier. Text ads get majority of viewing when they hold relevance with content the user is viewing. Ads displayed on Google are just sponsored links and the company will not maneuver the rankings and it is not possible to purchase a better page ranking.
3. You can be serious without a suit: Google allows open and free work culture. It provides employees with benefits like free meals, on-site gym, variety of games etc. There is a belief in the organization that creativity can be achieved with good organizational culture. In spite of having an open work culture, the management makes sure that there exists a well organized structure to take well planned decisions and put these into actions.
These three important organizational strategies yielded higher job satisfaction among employees and made Google the best company to work for. These three strategies on the outlook seem to be simpler but to implement them successfully needs a great vision. After looking at Google’s success story many large scale and mid-size industries tried to implement these strategies, but only a little success is achieved.
[Peter Norvig,”Hiring: the Lake WobegonStrategy”, Retrieved from http://googleresearch.blogspot.com/2006/03/hiring-lake-wobegon-strategy.html , on 16th June 2006]
4. Which of porter’s three generic strategies does Google appear to be using based on this case? Provide a rationale for your response.
Answer: Google adapted porter’s “Differentiation” strategy. Differentiation can be explained as “A strategy that calls for development of a product or service that offers exclusive attributes which are valued by customers and customers trust these products or services when compared to others in the competition. Differentiation strategy involves addressing performance or service issues and bridging that gap”
According to Tom Peters “Don’t forget that it (your product or service) is not differentiated until the customer understands the difference.” [Terra L. Fletcher, 2010].
Companies using differentiation strategy should posses a strong research team which can analyze the customer requirements and develop strategies to meet them. There exists a risk in increasing the price which is a result of increased production costs and companies can provide consumers a reason to choose their products. Implementing differentiation strategy will give companies an edge over their competitors.
According to 1000ventures.com three key issues are to be addressed by the organizations, they are positioning, trust-building, and awareness. There are challenges involved in implementing this strategy. Organizations must establish trust in the users that they are different form their competitors and then to make sure that they are delivering what they promised for the users and finally organizations need to be aware of the quality of the end product that is delivered to customers.
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Differentiation strategy worked well for Google. Users identified Google as a search engine and the company started exploring new ways to enhance its services for customer. One standout feature used by Google which separated it from its competitors is PageRank. PageRank is a system which delivers search results by computing a recursive score of web pages based on the weighted sum of the pages linked to the searched item. This gives a chance to provide the user with more relevant information. The algorithm is updated regularly to enhance the performance and it is kept as a secret. This gave a chance for Google to maintain its competitive edge over it competitors.
Google’s internet-driven search advertising is a product launched by the company which supports the company’s differentiation strategy. Google created Adwords for advertisers who wish to target a specific audience and to reach them as efficiently as possible. The difference of approach between Google and its competitors in advertising is that it is easy to create an ad text and also manage an online advertising account with easy payment. Another advantage is it would be possible to advertise on associates of Google also which makes it possible for the companies to go global also. Research team at Google always looks for methods and practices on how to improve the difference and to separate them from their competitors. They are also in look out at means with which they can efficiently convey their users about the difference, which is giving them an edge.
The management at Google believes that for a business to go strong and have a longer run, it is essential to have a strong, well-defined and structured differentiation strategy.
[Terry L. Fletcher, “How Business differentiation strategy can help give a competitive advantage”, pg1-1 retrieved from http://www.helium.com/items/1808015-business-differentiation-strategy on 16th June 2010].
[Google, “Corporate information”, retrieved from http://www.google.com/corporate/tenthings.html on 16th June 2010].
5 . Using D’ Aveni’s Hypercompetitive Framework, analyze Google’s strategy and the type of market disruption it created
Answer: D’ Aveni’s suggested seven methods for organizations to consider them in their business strategy. Which are as follows:
Superior Stakeholder satisfaction:
Google worked in understanding the needs of the users so as to increase customer satisfaction and to make it more worth by implementing various strategies.
Google provide users with vast knowledge in area of their expertise that will help them to predict, analyze, and create opportunities to achieve new horizons.
Positioning for speed:
Google make sure that they help the users as soon as possible in terms of all aspects when the need occurs.
Positioning for Surprise
Google has surprised the market by enhancing the search engine with new features and technologies that has made the job of searching more flexible. For e.g. it makes the search more filtered and provide results to the users with the most likely once. It has surprised the other engines like yahoo, bing etc by its ability to determine whether the specific link is editorial cited or an artificial link.
Shifting the rules of competition:
The transformation of Google from a simple layout to more sophisticated search engine is commendable and has always come up with new strategies to serve the customers and has totally revolutionized the industry .It has given new dimensions to the ad world.
Signaling strategic intent:
Google has taken the intended actions of the company and has restructured them in such a way that it has failed all the new strategies of its competitors. It maintains its trust on the old sites and has also relied on its sub domain site that places it to higher rank even when there are no citations.
Simultaneous and sequential strategic thrusts:
Google has used best business rules and different steps to always confuse its competitors unlike yahoo who cannot determine whether a link is really cited or not. Google when compared to yahoo it always looks for natural growth of the link over the time.
Google has revolutionized the way business is conducted; it broke all the barriers and changed the way business is conducted. The organization did not charge users for using their technologies instead it relied on companies to provide the revenue. Google story proves that business need not to be conducted in conventional way; it emphasized on giving the employees freedom to work and also to encourage the innovation among the staff.
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