Business Strategy Baidu

3069 Words May 11th, 2012 13 Pages
Q1) For this question, we will take a deep dive internal analysis of Baidu.

Firstly, let us take a look at tangible resources. Under this category, we have financial resources, organizational resources, physical resources and technological resources.

Financial resources [Tangible]
In 2007, Baidu earned about $86 million net income and $239 million in revenue (Ireland, Hoskisson, Hitt, p266). Majority of the revenue is contributed by an enlarged active online marketing customer base. We will elaborate details of the marketing activities under intangible resources. The accounts published show that Baidu is performing well financially.

Organizational resources [Tangible]
Baidu is incorporated in the Cayman Islands on January 18,
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Geographic expansion [Physical resources]
Baidu focuses on the big pie, China, which has 1.37 billion people (InfoPacific Development Inc , 2010). This is a huge population and Baidu had a strong foothold in China. In January 2008, Baidu entered Japan market and launched www.baidu.jp. The objective is to serve the Chinese SMEs who are doing business in Japan.

Being local, understanding local [Organizational resources]
Baidu adopted a strategy that focuses on searches in Chinese. The company has an advantage on this as the team understood the Chinese language, culture and the operations as opposed to other overseas competitors.

First-mover advantage [Innovative resources]
Being the first who enter the Chinese online search market, it has gained majority of the market share in China. Many people are used to the platform and competitors find it too costly to imitate and roll out equivalent products and services to serve customers’ needs.

Taxation [Financial resources]
Baidu enjoyed preferential tax benefits and a relatively lower tax rate than Google. This is an added advantage to Baidu as the operating cost will be lower in view of the savings derived from lower tax.

Q3) In terms of the external environment analysis, we will focus on three areas, namely, general environment, industry environment and competitor’s environment.

Within the general environment, following are the areas to
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