Executive Summary
The purpose of this report is to analysis the reasons of Google’s success. As we know, Google’s innovative search technologies connect millions of people around the world with information every day. Google today is the not only the hottest website in search engine market, but also the third valuable technical company in the world. Google’s NASDAQ Performance
Google’s targeted advertising program, which is the largest and fastest growing in the industry, provides businesses of all sizes with measurable results, while enhancing the overall web experience for users. Google is headquartered in Silicon Valley with offices throughout North America, Europe, and Asia.
We try to use SWOT and Porter’s five forces model to Analysis the reasons of Google’s success.
Table of Content
Executive Summary…………………………………………………………page1
Introduction…………………………………………………………………..page 3
Mission and Vision of Google………………………………………………page 4
Company task environment…………………………………………………page 5
SWOT analysis and suggestions…………………………………………. page 9
Porter’s five forces model and suggestions………………………………page 13
Motivation and leadership………………………………………………….page 15
Conclusion and suggestion………………………………………………..page 17
Reference…………………………………………………………………….page 18
Case background reference
Theoretical reference
Other reference
Introduction
Google began as a research project in 1996 by Larry Page and Sergey Brin, who were both PhD students at Stanford University. They thought that a search engine that could analyze the relationships between websites would product better results than other search engines. They called their new creation “BackRub”, because it checked the backlinks to estimate a site’s importance (by the way, this method is still used today in the infamous Google PageRank algorithm, which rates sites on a 1 to 10 basis based on backlinks, and several other variables, such as site layout, and keywords. Page and Brin would test their thesis as part of their studies at Stanford, and would later house their newly created engine at google.stanford.edu. The logo they had then was much different from today’s logo, and the name was changed n September 7, 1998, when Larry Page and Sergey Brin bought the domain Google.com, and officially changed the name to Google – A play on the world Googole, (The number one followed by one-hundred zeros). Perhaps this was because Google has endless sites indexed (almost 800 trillion), or has endless possibilities to expand as it has into the internet dominating search engine and company.
Today, Google is a publicly traded company that handles one of the most used search engines in the world, with a stock price that was originally the highest in its class. The company currently employs 8,000 employees, and is based in Mountain View, California. It also has several other headquarters in places like Seattle, Washington. Eric Schmidt, the former CEO of Novell, is the new Google’s CEO. Google was recently named a verb by two major dictionaries (Merriam Webster and Oxford), its meaning defined as “to use the Google search engine to obtain information on the Internet”. Almost 60% of the market in search engine usage is controlled by Google, and most analysts, and I myself, expect this to increase. But don’t expect this increase to come easy, as Microsoft and Ask.com compete with Windows Live Search and Ask Search.
Mission and vision of the company
l Mission
Google’s mission is to organize the world’s information and make it universally accessible and useful.
As a first step to fulfilling that mission, Google’s founders Larry Page and Sergey Brin developed a new approach to online search that took root in a Stanford University dorm room and quickly spread to information seekers around the globe. Google is now widely recognized as the world’s largest search engine — an easy-to-use free service that usually returns relevant results in a fraction of a second.
When you visit www.google.com or one of the dozens of other Google domains, you’ll be able to find information in many different languages; check stock quotes, maps, and news headlines; lookup phonebook listings for every city in the United States; search more than one billion images and peruse the world’s largest archive of Usenet messages — more than 845 million posts dating back to 1981.
l vision
Google’s vision is to ultimately search across all its content sources, compare and rank all the information in real time, and deliver a single, integrated set of search results that offers users precisely what they are looking for. Beginning today, the company will incorporate information from a variety of previously separate sources – including videos, images, news, maps, books, and websites – into a single set of results. At first, universal search results may be subtle. Over time users will recognize additional types of content integrated into their search results as the company advances toward delivering a truly comprehensive search experience.
For example, a user searching for information on the Star Wars character Darth Vader is likely interested in all the information related to the character and the actor – not just web pages that mention the movie. Google will now deliver a single set of blended search results that include a humorous parody of the movie, images of the Darth Vader character, news reports on the latest Lucas film, as well as websites focused on the actor James Earl Jones – all ranked in order of relevance to the query. Users no longer have to visit several different Google search properties to find such a wide array of information on the topic.
Company task environment
l Customers
There are two types of customers of Google. They can use two kinds of services.
The one is designed for Individual Netizen.
Web Search
Search over billions of web pages
Blogger
Share life online with a blog
Gmail
Fast, searchable email with less spam
Picasa
Find, edit and share photos
Alerts
Get email updates on the topics of your choice
Book Search
Search the full text of books
Catalogs
Search and browse mail-order catalogs
Desktop
Search and personalize your computer
Directory
Browse the web by topic
Earth
Explore the world from your PC
Another type is provide for Business Organization
Advertise business on Google
No matter what your budget, you can display your ads on Google and our advertising network. Pay only if people click their ads.
Earn money from relevant ads on website
Google AdSense matches ads to their s content, and you earn money whenever your visitors click on them.
Help customers find you on Google Maps
Millions of people search Google Maps every day. A free listing on Google Maps makes it easy for them to find them.
Use the Local Business Center to create your free listing. When potential customers search Maps for local information, they’ll find your business: your address, hours of operation, even coupons to print out and bring to your shop. It’s easy, free, and you don’t need a website of your own.
l Supplier:
Google’s supplier mainly are divided into two categories: Hardware Company and Bandwidth Provider
Hardware Company
IBM
INTEL
AMD
In order to manage mass of information, Google requires hi-speed servers
Bandwidth Provider
AOL
AT&T
VERIZON
Abundant bandwidth helps google transport information all over the world.
Competitor
Google’s competitors are other search engine
BAIDU
YAHOO
WINDOWS LIVE
BAIDU, YAHOO, MICROSOFT are biggest three competitors to Google.
Regulator
Google earth may expose military expose.
Take UK as an example. Originally, everybody can use Google Earth to see UK’s military base.
Politician claim Terrorists attacking British bases in Basra are using aerial footage displayed by the Google Earth internet tool to pinpoint their attacks.
So they required to regulate it.
Google’s response is blur those pictures related to military installations:
SWOT analysis and suggestions
l Strength
1. Profifitable Internet advertising business
Google’s Overture is a tremendously profitable Internet advertising business. It focuses on affiliate advertising for large adverting accounts, This is an important income stream for Google.
Google has over 350 million users of its services and solutions. This makes it a very powerful marketing company, with a very well known brand. Some reports indicate that is it is the most popular website in the World.
A key long-term strength is Google’s international business presence. As the Internet expands and it is adopted by more nations the opportunities for Internet brands begin to emerge. Google is well placed to take advantage of these opportunities with its strategic business units in Asia, Europe and Australia.
The Google Directory is an original source of structured information. It has built over the last decade, and unlike mainstream search engines, its content is moderated (i.e. sites are vetted before their inclusion).
2. Creative Services
Google provides quantities of new services in other area. Good earth is a good example. Google Earth changed the way people think about search. After years of people asking how else search results might change, it was great to see the map metaphor take hold. It’s hard to believe it’s barely a year old. Google Earth, especially mash-ups, helped people see how information might be better displayed outside of a top ten list.
3. Brand Strategy
Brand-wise, Google enjoys an unsullied image that sparkles cleaner than Coca Cola, Pepsi, Ford, Gap and AT&T combined. In an article published on Advertising Age, Randall Rothenberg named Google CEO Eric Schmidt as the most powerful media executive. Just a few months back, Google beat out Starbucks, Apple Computer, and Coca Cola to claim BrandChannel.com’s Brand Of The Year title.
l weakness
1.Inefficient
Despite results clustering, Google keeps serving up sites you’ve seen. You may not know the name results clustering, but you recognize Google doing it. That’s when it sees there’s more than one page from a web site that might match what you are looking for, so it “indents” the second best one below the first. Search for books, and you’ll see this happening with Amazon. But clustering only happens on a results page-by-results page basis. In other words, look at mars landing sites, and there’s a link to a page at the msss.com domain near the bottom. Say you reject this. Go to the next page, and msss.com is back again, as is the BBC.
2 homogeneity
Differentiation is difficult for Google. Almost all of its packaged services are available from other sources.
(i)Search facilities are available on MSN and Google.
(ii)Free E-mail accounts are available from Hotmail (MSN) or G-Mail (Google), and many, many others.
(iii)New is available from CNN or the BBC.
(iv)Shopping is available everywhere on the Internet. Google has Froogle.
Online advertising is a new income stream for organizations such as MSN, Google and Goggle. Yes, today they are very, very profitable. However, as technology develops and new unforeseen advertising media emerge, the future is uncertain for these income streams. This is a weakness for Google and its competitors.
Another income stream that has been key to Google is derived from its partnerships with telecommunication providers. For example, you buy an Internet connection package from your local telephone company, and it includes a fee-based Google package including e-mail accounts, user support and other added value services. If ever this channel is changed or removed, the income stream would be affected.
3.Fix Gmail’s “custom from” problem
If you’re going to let someone sends things as if he/she has their own mail servers, then actually ensure that people really believe he/she has their own mail servers. Your “Custom From” problem that he/she cover here is causing people to think they have to send now to both their “real” domain and their Gmail address. He/she has their own SMTP servers. He/she used yours because he/she wanted to archive their outgoing mail. But he/she can’t do this if you don’t fulfill the promise that they’d have their own domain in the From field. Charge him/her if you have to, but fix it.
l Opportunity
1. International market
The international market is a huge opportunity for Google. Google, Microsoft and Google are busy carving niches and taking over businesses in are around the Greater China Region. China has over 1,200,000,000 citizens. Other economies, such as India, also offer tremendous growth potential.
The Development of the Google Directory has potential for new business and income streams. Two thirds of organizations in Ohmae’s Triad (Europe, Japan and the USA) are Small Medium Enterprises (SME’). SME’s are potential directory advertisers.
Mobile technologies offer another opportunity for Google. Today we access the Internet using personal computers. Tomorrow phones, televisions, personal organisers, music players and computers will merge and morph. The mobile devices of the future will need services and solutions. Google would be well placed to provide many of them.
2. New service
Google Earth combines the power of Google Search with satellite imagery, maps, and terrain and 3D buildings to put the world’s geographic information at your fingertips.
3. Growing user
There is nothing the government could change the Internet’s growing role in people’s life, There has more manpower to police the Internet than the rest of the world combined. Like most people in the world, more and more people are getting known the world through the Internet, learn how to use it to get their ideas and thoughts cross over to others and bring justice to such a world the people start learning how democracy works. Therefore, it’s also a large opportunity for Google, because it means they will have more customers.
l Threat
The first threat to Google is internal.
Google needs to maintain a culture that produces and delivers innovative new products. So far, Google has done this by hiring some of the brightest and most creative researchers in the world. But, as Google grows, having incredible people isn’t enough. Communication becomes difficult in a large organization. Accountability drops, free riding increases. Great prototypes are developed, but never get out the door. People don’t know who to contact and how to get things done. Google is well known for having nearly no management — the controlled chaos of a research lab — but, unless Google can adjust its organizational structure to its new size, the firm may find its innovation crushed under its own growth.
The second threat to Google is external.
Google thrives on innovation, but another’s innovation may out-Google Google. Clustering search engines such as Vivisimo may be one threat, but the technique hasn’t proved extremely compelling yet. Many are working on question answering systems (e.g. Start from MIT), but Google, with some of the world experts in natural language processing, is well prepared to compete here. Personalization may be one area where Google has been slow to compete. Google Labs has a prototype of personalized search, but it’s been widely criticized as ineffective, most likely because of the technique used. A9 is rumored to be developing personalized search. Yahoo’s CEO has said that they intend to focus their innovation on personalization. And, while Microsoft has no offering in personalized search, it is taking some steps toward personalized news.
Porter’s five forces model and suggestions
Buyer Power
Individual people and business entity
Supplier Power
Hardware and bandwidth supplier : IBM, AOL
Threat of Substitutes
Traditional information provider: CNN, Yellow Page
Threat of Entry
New competitors: Microsoft
Competitive Rivalry
Healthy condition: Yahoo, Baidu
.
Buyer power for Google is low, because if buyers want to search useful information, Google is their best choice, which provides perfect service. It is not easy for them to find another search engine as efficient as Google. Businesses are forced to add value to their products and services to get loyalty. Many loyalty programs include excellent services that customers demand Google. Customers want to solve their problems and many times they are more successful by using Google than others. Also, Google offering more valuable services at lower costs. Many people are assuming roles as drop shippers. Individuals can have a thriving business selling goods of larger companies without having to carry inventory.
Supplier power for Google is low, Because buyers have fewer choices from whom to buy. As mentioned earlier, drop shipping has increased the amount of suppliers available. All an individual has to do is form and agreement to sell products for the company. The company takes care of all the logistics.. Associates allow a webmaster to earn money by recommending products from others. This increases supplier offerings.
Threat of substitute products or services is high when there are many product alternatives. This is different than having many suppliers. Examples of alternatives are exchanging brand names, substituting credit card capabilities, and looking at better values from cheaper sources. The internet allows this with the “global economy”.
Threat of new entrants is high when it is easy for new competition to enter the market. Now, small operations can open with less than $10.00 per month and make a lot of money. As inventive as people are, there are always opportunities to do improve a product or service or just create and sell something new. Recently, many new entrants have made even more money authoring Ebooks that tell others how to do what they did. Rivalry among competitors is high when competition is more intense within industries.
The internet offers avenues of competition to existing companies and
opportunities for start ups. Now businesses can enter the market with few barriers to entry.
Competitive Rivalry is high. The biggest threat for all web-based organization is competition. Huge profits attract investors, innovators and entrepreneurs. Dotcom fever has not gone away; it is now more focused on profit delivery. All of Google’s key services have competitors such as AOL, Google and many others.
International, culture specific competitors could affect Google in the future, unless strategic alliances are forged. China has developed its own search engines, as has India. Why should the World use USA based companies such as Google? There needs to be a series of substantial competitive advantages to see the business remain as an international brand. Look at what has been learned from the global car industry, or electronics industry.
When Google! was founded in 1994 by Stanford Ph.D. students, David Filo and Jerry Yang, it began as their hobby and has evolved into a global brand that has changed the way people communicate with each other, find and access information, and make purchases. More.
Disclaimer: This case study has been compiled from information freely available from public sources. It is merely intended to be used for educational purposes only.
Threat of Substitutes for Google is high. Because there are many sources of information. In addition to surfing the Internet, you also can consult people; newspapers; magazines, trade publications and other print material; books; educational TV, video and audiocassettes; and computer programs.
Motivation and leadership
Hire by committee. Virtually every person who interviews at Google talks to at least half-a-dozen interviewers, drawn from both management and potential colleagues. Everyone’s opinion counts, making the hiring process more fair and pushing standards higher. Yes, it takes longer, but we think it’s worth it. If you hire great people and involve them intensively in the hiring process, you’ll get more great people. We started building this positive feedback loop when the company was founded, and it has had a huge payoff.
Cater to their every need. As Drucker says, the goal is to “strip away everything that gets in their way.” We provide a standard package of fringe benefits, but on top of that are first-class dining facilities, gyms, laundry rooms, massage rooms, haircuts, carwashes, dry cleaning, commuting buses—just about anything a hardworking engineer might want. Let’s face it: programmers want to program, they don’t want to do their laundry. So we make it easy for them to do both.
Pack them in. Almost every project at Google is a team project, and teams have to communicate. The best way to make communication easy is to put team members within a few feet of each other. The result is that virtually everyone at Google shares an office. This way, when a programmer needs to confer with a colleague, there is immediate access: no telephone tag, no e-mail delay, no waiting for a reply. Of course, there are many conference rooms that people can use for detailed discussion so that they don’t disturb their office mates. Even the CEO shared an office at Google for several months after he arrived. Sitting next to a knowledgeable employee was an incredibly effective educational experience.
Make coordination easy. Because all members of a team are within a few feet of one another, it is relatively easy to coordinate projects. In addition to physical proximity, each Googler e-mails a snippet once a week to his work group describing what he has done in the last week. This gives everyone an easy way to track what everyone else is up to, making it much easier to monitor progress and synchronize work flow.
Eat your own dog food. Google workers use the company’s tools intensively. The most obvious tool is the Web, with an internal Web page for virtually every project and every task. They are all indexed and available to project participants on an as-needed basis. We also make extensive use of other information-management tools, some of which are eventually rolled out as products. For example, one of the reasons for Gmail’s success is that it was beta tested within the company for many months. The use of e-mail is
critical within the organization, so Gmail had to be tuned to satisfy the needs of some of our most demanding customers—our knowledge workers.
Encourage creativity. Google engineers can spend up to 20 percent of their time on a project of their choice. There is, of course, an approval process and some oversight, but basically we want to allow creative people to be creative. One of our not-so-secret weapons is our ideas mailing list: a companywide suggestion box where people can post ideas ranging from parking procedures to the next killer app. The software allows for everyone to comment on and rate ideas, permitting the best ideas to percolate to the top.
Strive to reach consensus. Modern corporate mythology has the unique decision maker as hero. We adhere to the view that the “many are smarter than the few,” and solicit a broad base of views before reaching any decision. At Google, the role of the manager is that of an aggregator of viewpoints, not the dictator of decisions. Building a consensus sometimes takes longer, but always produces a more committed team and better decisions
Don’t be evil. Much has been written about Google’s slogan, but we really try to live by it, particularly in the ranks of management. As in every organization, people are passionate about their views. But nobody throws chairs at Google, unlike management practices used at some other well-known technology companies. We foster to create an atmosphere of tolerance and respect, not a company full of yes men.
Data drive decisions. At Google, almost every decision is based on quantitative analysis. We’ve built systems to manage information, not only on the Internet at large, but also internally. We have dozens of analysts who plow through the data, analyze performance metrics and plot trends to keep us as up to date as possible. We have a raft of online “dashboards” for every business we work in that provide up-to-the-minute snapshots of where we are.
Communicate effectively. Every Friday we have an all-hands assembly with announcements, introductions and questions and answers. (Oh, yes, and some food and drink.) This allows management to stay in touch with what our knowledge workers are thinking and vice versa. Google has remarkably broad dissemination of information within the organization and remarkably few serious leaks. Contrary to what some might think, we believe it is the first fact that causes the second: a trusted work force is a loyal work force.
Conclusion and suggestion
Google was been founded as a mere eight years ago, which is one of the new century’s most cunning enterprises. Wall Street answered with an unprecedented vote of confidence: a $120 billion market cap, a share price soaring above $480, and a price/earnings ratio close to 70.
That’s a huge bet on future growth that seems unthinkable during the post bubble period. But in Google’s case, the exuberance is rational. That’s because Brin, Page, and CEO Eric Schmidt cornered online advertising: They’ve made it precision-targeted and dirt cheap. U.S. companies still devote more ad dollars to the Yellow Pages than to the Internet (which accounts for less than 5 percent of overall ad spending). Yet Americans now spend more than 30 percent of their media-consuming time surfing the Web. When the ad dollars catch up to the trend, a mountain of cash awaits, and Google is positioned like no one else to scoop it up.
Which raises the most widely debated question in business: What kind of company will Google become in the coming decades? Will it succumb to hubris and flame out like so many of its predecessors? Or will it grow into an omnipresent, omnipotent force–not just on Wall Street or the Web, but in society? We put the question to scientists, consultants, former Google employees, and tech visionaries like Ray Kurzweil and Stephen Wolfram. They responded with well-argued, richly detailed, and sometimes scary visions of a Google future. On the following pages, we’ve compiled four very different scenarios for the company. Each details an extreme, but plausible, outcome. In three of them, Google attains monopolistic power, lording over the media, the Internet, and scientific development itself. In the fourth, Google withers and dies. That may seem unthinkable now, but nobody is immune to arrogant missteps. Not even today’s smartest business minds.
Reference
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<Fortune>
<Business Week>
<The Economist>
<Harvard Business Review>
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