Strategic Marketing
INDUSTRY PROFILE
Most of them coming into existence in the mid 1990s.
Yahoo seems to be the grandfather of the currently existing crop
starting in 1994.
Some search companies get its search crawler data from Google, for
instance Yahoo did this for a while and now AOL Search is
enhanced by Google.
The companies earn their money in a variety of ways but primarily it is
paid advertising that is the bread and butter of this industry.
Industry Analysis
Industry: Internet services and technologies
Major Sectors:
Advertising
Search engine
Cloud computing
Primary Revenue Source: Advertising (97%)
Constantly evolving Industry definitions
COMPANY BACKGROUND
Name
Google Inc.
Logo
Industries served
Internet
Geographic areas served
Worldwide
Headquarters
U.S.
Current CEO
Eric Schmidt
Revenue
$ 59.82 billion (2013)
Profit
$ 10.7 billion (2013)
Employees
53,861 (2012-13)
Main Competitors
Apple Inc., Face book Inc., Microsoft Corporation, Samsung
Electronics Co., Ltd., International Business Machines Corporation
and many others.
CONTD
Company started in 1998 by two Stanford university computer science graduate students,
Sergey Brin and Larry page.
They decided to form Google and presented their search methods at a world wide web
conference in 1998 and by 1999 had $30 million in funding from a variety of means.
Google went public in 2004 raising $1.6 billion.
Data can be from satellite transmission, national archives, patent information, libraries,
video, radio, images, telephone, and the internet.
They have made data searchable from a website, from your computer, from an intranet,
and on the internet.
They continually win awards and large scale recommendations for doing things the right
way.
It is currently a real power house making record breaking purchases of other companies
such as YouTube in 2006 for $1.65 billion.
GOOGLE AND SMARTPHONE
Googles dominance of the search engine market has made it a verb
synonymous with search on most computers in existence.
On the horizon is a vast new market, Smartphone. As cell phones morph into
Smartphone with capabilities similar to PCs they are the new frontier for
search technologies.
With a Smartphone in your pocket, Google can not only provide search
results for your desired phrases but also mine data about you and provide
very precise, personalized and context-aware information based on multiple
dimensions.
Cell phones are growing at the rate of 1 billion a year and Smartphone are
expected to reach more than 400 million units by 2013.
Googles Advertising Value Chain
For the last three financial years,
around 97% of Googles income
has come from advertising.
Everything that sits between a users
eyeballs on one end, and advertisers dollars
on the other is considered strategic to
Google.
Googles Advertising Value Chain
Case study Analysis
Google Strategies To Dominate Internet
Advertising
Googles multiple acquisitions since its 2004 IPO, and its
research and development activities, were directed at increasing
the companys dominance in Internet advertising.
The addition of Google Maps, local search, airline travel
information, weather, book search, Gmail, Blogger, and other
features increased traffic to Google sites and gave the company
more opportunities to serve ads to Internet users.
CONTD
More than 12 billion videos were watched on YouTube each
month, the online video sites advertising revenues in 2009 were
estimated at less than $300 million.
The number one search engine used not only in the United States
but also across the world.
In 2010, Googles search-based ads could be delivered to Internet
users in 41 different languages.
More than 50 percent of the companys 2009 revenues and traffic
were generated from outside the United States.
CONTD
However, Googles 2006 entry in to China was accompanied
by challenges, including strong competition from local
search provider Baidu and requirements by the Chinese
government censorship requirements until early 2010.
Google agreed in June 2010 to stop the automatic redirects
to its Hong Kong site.
A breakdown of Googles revenues and long-lived assets by
geographic region for 2009 through 2009 is presented.
CONTD
Mobile search and Google entry into the market for smart phones
In 2010, 234 million Americans ages 13 and older owned and used
phones.
More than 30 percent of mobile phones users accessed the internet from
mobile devices.
February 2010, the number of smart phones users had grown by
8.1percent to reach 49.1 million.
Google marketed its own nexus one smart phones, which has produced by
htc and was compatible with all wireless carrier 3g and 4g networks.
Google was also collaborating with Verizon to develop a tablet computer
similar to apples i pad that would run on Verizons wireless networks.
CONTD
Key Strategic Areas for Google:
Capabilities
Recruitment & retention of
talented staff
Facilitation of content co-
creation on the web
Competencies
Search
Data warehousing
Innovation
Software programming
Cloud computing
Brand management &
PR
Resources
Data warehouse
Huge financial resources
Expert & motivated
personnel
Brand name
Search engine
Online traffic
Display network
Loyal customers
CONTD
KSFs/Threats of Industry:
Key Success Factors
Data mining
Innovation-focus
Scalability
Reliability & data integrity
Strategic portfolio-management
Threats
Ethical implications (data)
Losing market share to other
forms of advertising
Being cut-out of the value chain
by other companies (upstream or
downstream)
S
TRENGTHS
W
EAKNESSES
O
PPORTUNITIES
T
HREATS
Search engine industry
Executive management
Large cash flow
Loyal and satisfied employees
Loyal customers
Products are very adaptable
Pushing societys technology
Channels for the phone market
Scalability
Openness
Public perception of Googles
practices
Non-corporation by foreign
governments
Decisions being made to progress
Google
Advertising revenue growth is
slowing down
Secure consumers personal info
Resurrect relationship with Chinese
market
Focus into developing tangible
technology
Relationship in other websites
Gaps in online market offering
Targeting specific markets- children or
senior citizens
Future expansion for television
Revenue through advertising
Copyright lawsuits/issues
Public perception of Google
Microsofts growing dislike
Continued insistence by some foreign
governments
Microsoft and Yahoo possible
partnership
Advertising space is becoming more
competitive
Negative
Internal
factors
External
factors
Positive
Segmentation & Targeting
The Google company:
Offers products that generally appeal to a mass market
Doesnt matter what you are using the web for
Search is the common denominator for everyone; a home-base from which to
begin your journey
Target web users all over the world
Particularly North America, Europe, Russia, Australasia
Google Advertising:
Targets advertisers whose market frequent the internet
Can be targeted with precision at a local or worldwide level
Positioning Analysis
The Google company is positioned as:
Solution-centric
Innovative
Socially responsible
Vast networks, deep knowledge
Google Advertising network
Advertiser-friendly
Traceable metrics Google Analytics
Credible, tasteful advertising
Rewarding for all parties (advertiser, host & viewer)
Successors & Failures in the Industry
Current Firm Level Strategy:
START-UPS
ACQUISITIONS
ALLIANCES
Current Business Level Strategy:
Business Strategies of the Major Competitors:
Current Marketing Strategy:
Production & Purchasing Strategies:
Financial Position of Google:
Current Hr & Information Systems Strategies:
Leadership & Culture Structure
Employee Perks
The 70/20/10 Rule
Strategic Options
(A) Extend the Google
Advertising Network
(B) Focus on Tangible
Technology
(C) Google B2B Platform
Develop our own
version of E-Bay for
businesses. Will lead
to more traffic &
advertising potential
Focus our future
competitive strategy
on tangible
technology to make
up for lost advertising
revenue
More advertising
real-estate; grow
Google sites through
acquisition; grow
Google Display
Network
Extend the Google Advertising Network
Attempt to acquire Wikipedia
6
th
Most popular website in the world
Wide market appeal
Trusted resource
Currently run as a NFP company
Bid $6B
Google Group Display Network
Promotion
Invest $2B in
promotion of
Google group
products, such as
Google Voice,
YouTube Live, &
Google+
Grow the
network
5 new potential
partners identified.
They all feature in
the Top 100 most
visited websites in
the world.
Focus on Tangible Technology
Google Retail Store
Google focuses on future TANGIBLE technology
These technologies are displayed for everyone to see
Store allows the public to use and experience these innovations
The world sees where the future is leading
Products will be available to order and buy
Decreasing dependence on adv. Rev. (80%)
Product Innovation
$3B to be invested into
research and development
for new product designs,
such as Google glasses,
Google TV, Google phone,
Google Driverless Car
Store Development
Located in New York City
Free for public to
experience
Hype is generated through
Googles online platforms
$1.1M to rent, $0.4M for
renovations and set-up
Google's efforts are focused on improving
Internet access and speed
Google Chrome has made browsing the Internet much faster and more efficient.
The launch of the Android OS made it possible for people to access the Internet from
their phones.
Google Now stimulates more Internet activity by pushing you content based on your
search history and online behaviour.
Google Fiber brings you broadband Internet that is 100 xs as fast as your cable
Company's.
"A self driving car unlocks a vast amount of time that could be spent on the Internet."
Google Glass will allow you to jump out of an airplane and still be connected to the
Internet.
Future Prospects for the Google
