Google’s Competitive Strategy Essay

Google is a global technology company focused on improving the ways in which people find and use information. It began in 1996 as research project by Larry Page ; Sergey Brin who came up with a plan to make a search engine to rank websites according to the number of other websites that link to it. It registered its domain “google. com in 1997 and later 1998 Google corporation located in Mountainview California was formed. Since then Google has developed lots of utility products and services for the public most of them at no cost or at low cost some of which; includes Gmail, Google Maps, and Google Chrome etc.The impact of the innovation Innovation is rapidly becoming a capability that strengthens and focuses the corporate strategies.

Over time has become a key enabler to many corporate goals and strategies. This has been driven by increased rate of change in competition. Google is among the most innovative company, it offers search products that fill a niche which is not covered by its competitors. It acts as a competitive threat to its competitors, forcing them to invest more in their search product and, in the process, improving the quality and of search data for every user on the Internet.It does innovate in some spaces but has largely innovated in order to gain entry in markets that already existed because innovation is the key driver of competitive advantage, growth, and profitability. Firms which are successful in realizing the full returns from their technologies and innovations are able to match their technological development with complementary expertise in other areas of their business, such as manufacturing, distribution, human resources, marketing and customer services.

The most important components in the field of innovation include strategy innovation, new product and idea management.A firm can adopt radical innovation which is concerned with exploration of new technology and from incremental innovation that is concerned with exploitation of existing technology. Radical innovation is a product, process, or service with familiar features that offer potential for significant improvements in performance and cost. It creates such a dramatic change in processes, products, or services that they transform existing markets or industries, or create new ones. Product innovation makes a company remain competitive, but process innovations are important because hey often reduce costs, and it may take competitors a significant amount of time to discover and imitate them. Google is competes with Microsoft all specialising in search, collaboration tools and browsers.

Undoubtedly, Google is the leader in search. That’s what they specialized in and continues to be their most cherished asset. It has outwitted its competitors by delivering solid search results and cool tools such as Street Views. Microsoft sites have increased their search share from 10.

7% in August 2009 to 13. 9% in August 2010 while Yahoo! has fallen from 16% a year ago to its current 13. 1%, Google held steady at 65% Sean (2010).Though Microsoft is leading in browsing, but there is a steep competition between Google chrome and Internet Explorer. According to Ryan (2010), Chrome had continued to gain market from 6. 1% to 6. 73% against its rivals Firefox 24. 59%, Opera, forcing Internet explorer to fall from 60.

65% in 2009 to 59. 95%. A long term corporate success is linked to the ability to innovate. Although corporate investment in improvements to existing products and processes does bring growth, it is new game changing breakthroughs that will launch company into new markets, enable rapid growth, and create high return on investment.Therefore focal point of a corporate strategy should be to have a sustainable competitive advantage. This will enable a firm to survive against its competition over a long period of time.

The resource based view argues that a sustainable competitive advantage is achieved by continuously developing existing and creating new resources and capabilities in response to rapidly changing market conditions and knowledge management is the most important value creating asset. Competitive advantage exits when the firm is able to deliver benefits as competitors but at a lower costs or deliver benefits that exceeds those of competing products.It’s a prolonged process of implementing some unique value creating strategies based on unique synergistic combination of internal firm’s resources and capabilities that cannot be replicated by competitors. Sustainable competitive advantage allows the maintenance and improvement of the company’s competitive position in the market.

This enables a firm to survive against its competition over a long period of time. Google revolutionized the online email space by offering a larger amount of disk space than any competitors and multiple attachments can be added better than Yahoo where ttachments are added one at a time. Gmail is considered to be the more professional of accounts and lends greater credibility to freelancers and home business owners who receive email from clients and investors. Although Yahoo! mail accounts are very common but they aren’t considered as professional to the average person working online. Customer value promotion must offer a superior solution to a customers’ problem, and the product must be well differentiated, there is a lot of search engines, but there is only one Google, which trumps its competition with applications like Google Earth.The web Search uses personal preferences to deliver custom search results based on interests selected by users.

It is well known in producing precise and accurate results. Recently, Google released a new Instant feature in the search bar in efforts to enhance the very search engines experience and provide the most reliable source of fact finding over the internet. It provides best available searches and best matched most searched keywords/key phrases automatically instantly when typing a word without clicking a search button. Network effects create value to a product.

This is where a product or service is in such a way that its value to a potential customer is dependent on the number of customers already using good or service. The total value of service that possesses network effects is proportional to the square of the number of customers already using that good or service. Google gets more public perception compared to its rivals like Microsoft. However the consequence of a network effect is that the purchase of a good by one individual indirectly benefits others who own the good. E. g. By opening up Gmail account by a person makes his/her friend’s Gmail accounts more useful.A product’s success is due to compatibility and conformity issues, not that the product or technology may be superior or inferior to the competition.

This implies that network effects occur when higher sales of a product or service increase its value and therefore leads increase in sales. In the case of Google, its online ad network has continued to grow at a faster rate than its closest competitors, though Microsoft had the highest network growth in 2009 by 31%, but also Google was the second in growth by 13% from 8% in 2008 better than Yahoo with 9%.The innovation reduces fixed costs of entry for new firms and production, in terms of shifting fixed capital expenditure in IT into operative costs depending on the size of demand and production. This contributes to reduce the barriers to entry especially for small and medium sized enterprises.

Google’s advertising tools have enabled companies to move closely target future customers. Google (2010) claims that businesses receive approximately $8 for every $1 spent on both search and Adwords.Advertisers generate 96% Google’s revenue is generated by advertising tools. In 2009, local economies in US experienced a growth where Google search and advertising tools generated $54 billion, Greg (2010). Its target is to everyone in the market compared to Apple that only focus on products with selected market. In 2009, Google came up with a new and innovative web browser Google Chrome to address the problems and limitation in many existing web browsers. It has integrated many advanced features which helps users in many different aspect i.

. Task Manager for Websites which shows how physical memory is consumed by different websites, Visual Browser History, Super Clean Contextual Menus, Favorite web searches from the Address Bar etc. In the context of innovation, leadership is the necessary condition for long-term competitiveness. Value-based leadership is more effective as motivation for constant innovation at all organization levels and as a source of unity and coherence across fragmented firm boundaries.Innovation arises from complex interactions between many individuals, organizations and environmental factors. The strength of an organization culture is one of the most fundamental competitive advantages. A culture of commitment is where employees passionately pursue the organization’s mission.

Long-term corporate success linked to the ability to innovate. Google has taken specific steps to encourage innovations, which are crucial for Google to be able to compete with giants like Microsoft and Yahoo!It has created a culture where every technical employee feels that innovation is expected of them. The company organizes brainstorming sessions each year with engineers to generate more ideas. Employees can talk through ideas and engineers have one day a week to develop their own pet projects.

Google is willing to look for great ideas not only inside the company but outside as well. In 2004, the company bought Keyhole, which allowed them to develop Google Maps with sophisticated satellite imagery and maps. ConclusionOrganizations should formulate a plan to gain a sustainable competitive advantage by getting oriented towards the market in which it operates and other companies in the marketplace against which it competes. A successful strategy adds value for the targeted customers over the long run by consistently meeting their needs better than the competition does.

Google has created a new innovative technology that has lead to increased competition and further innovations which has resulted into better features and new products at lower prices. Google has remained at the cutting edge of technology causing a substantial impact on businesses and the global economy. (1642 words)REFERENCESChristopher, M. (2010).

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