Google’s Five Forces
Supplier Power * As long as Google continues its dominance as the number one internet search engine in the world, supplier bargaining power will remain low. * Thanks to programs like AdSense and AdWords, which forms the framework of the advertisement system that Google has in place, both the advertiser and the user of the search engine are Google customers. * Google has also formed a joint relationship with Android to increase their sales market and bottom-line profitability.
Buyer Power * The power of the customer in the IT field of Internet and Computer Software industries is particularly strong. * There are a lot of other search engines and companies that compete with Google in the many
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Threat of Substitution * With such a position of dominance within the internet search engine industry, Google has positioned itself well for long term success on the internet. * Technology wise, there may be some threat to the Android phone, that Google has developed as there are other brands of phones available that may be cheaper in price, but do not possess the same applications or operating systems that the Android phone does. * Software wise, none of the companies that Google has competed against could hope to compete against the software that Google has produced and allows its clients to utilize: Google Analytics, Google Maps, iGoogle, YouTube, Gmail etc. The threat of substitution would also be made hard by the fact that Google constantly is updating and improving their software.
Threat of New Entry * The threat of a new entry into the markets that Google has established itself in is very minimal. * A company looking to challenge Google in its market would need a massive amount of financial resources to build the start-up network infrastructure that would allow it to compete with Google and the services and products that Google has to offer. * The new entrant would also be facing the challenge of having to maintain and update/upgrade their services and products at a rate
When products or service are very similar, customers would be more reluctant to switch on the basis of price. Also firms would have a greater incentive to participate in price competition (Business analysis and valuation, Krishna G. Palepu et al, 2010). Google’s main competitors in the provision of web search Microsoft and Yahoo have a different business structure and set of customers. Google provides a number of products which all integrate with search, Microsoft’s Bing is search engine that also powers few other search modules, while Yahoo is not a search engine but a web portal with a search engine (Jeremy Lindstrom, 2015). [15] Microsoft has a less powerful search engine compared to Google. The market share of the different search engines contribute to the switching costs to the buyer, also when looking at other providers like Baidu which are more in their own regions which Google has no access to. The function Microsoft’s Bing and Google advertisement tools are very similar; the biggest difference is the customer reach (Elena Machnew, 2105). Microsoft Bing product ad and Yahoo have a partnership agreement, which means a buyer of the Bing ads solution has more customer
Today, Google, Inc. is worth more than General Motors, McDonald's and Disney combined, and the company continues to model the way in the global technology industry in which it competes. In fact, the company's name has become a verb and it is common practice for consumers to "Google" what they want to find online. To determine how Google, Inc. reached this dazzling level of performance in a relatively short period of time, this paper provides an analysis of the three external environments in which Google competes, the general environment, the industry environment and the competitor environment. Next, a discussion of two specific strategic issues as well as opportunities and threats that are facing Google, Inc. is followed by a summary of the research and important findings in the conclusion.
Google Inc. is one of the leading computer search engines in the world and is continuing to grow as the
Due to the increased competition from Yahoo and Microsoft, it has posed a great threat to Google Company. Entry of such like companies in the market has been relatively easy and even offering similar services to the consumers is no longer a problem as unlike a while back, technology has greatly improved. With an improvement in technology, creating sites that help people access information from the internet has been quite cheap and all it calls for is the creativity of a company. Google, however, has been able to remain at the top of the chart. They have been able to come up with a user-friendly search engine for their clients, one that is easy to understand as well as easy to use. Also, Google has been able to cut on cost as they are able to create web pages using UNIX web servers which are relatively cheap. This makes it possible for them to minimize the cost of input and hence maximizing their profit margins. This makes it possible for them to hire qualified personnel, offer quality services, advertise their products, and even offer promotions, helping them overcome the competition in the market structure.
As of 2015, Google had 75% market share in searches. People use Google to search nearly 13 billion times per month, which averages to 26 searches per person per year. There are very few products in the world with this ubiquity and dominance. Despite these impressive numbers, it is not fair to call Google a monopoly, because it is not suppressing competition. There are no significant barriers to entry, and customers have no significant transaction costs in switching
Google Search is the most popular search engine in the world, and just by that has an enormous advantage in information markets. Google has unprecedented access to what people are thinking about at any given moment, information which is extremely valuable to advertisers and marketers. Google also is also an extremely well established company, with its massive revenue allowing it to support its extremely robust infrastructure. Google has massive and modern data centers all over the world, and continues to invest into more infrastructure, including data centers and the new Google Fiber in the United States. Googles massive revenue also allows it to branch off into more innovative pursuits without having to worry too much about funding. Google can pursue expensive and difficult projects that generate little to no revenue for a very long time, if the company believes that the investment will be worth it in the end. Examples of this include Google's Self driving cars, and the aforementioned mentioned Google
Competition in the search industry is high. There are several search engines available, albeit Google holds the top percentage. Some of Google’s opposing forces are Yahoo!, Bing, and MSN search. The strongest is competitive rivalry and the weakest is buyer power. There is a big rivalry amongst search engines in gaining the newest advances and best technology to suit the customer. Buyer power is weak because there is no substitute for an online search engine. You could use an encyclopedia or something of that nature, but with online search engines,
As more companies emerge Google will receive more people to advertise and contribute to their income.
“Rivalry in this industry is expressed by aggressive pricing policies, profound product innovation and design, online intensive marketing, direct selling, and afterscale services (Forbes, 2012) The Table below shows the current market cap Of Apple Inc. with its main competitor being Google Inc. Apple Inc. secures its market leadership by providing products and services with unique attributes using differentiation strategy. They also implement focus strategies such as instead of targeting business users, targeting consumer users with the IPhone.
Constant refinement for there search engine was one of the key factor behind Google’s success. With there PageRank algorithm, Sergey Brin and Larry Page were able minimize “spam” in there search results. This was achievable by counting inbound links to weight the relevance of the page, while other search engines was counting key words.
Google is the most successful information technology and web search company in the world. It was founded in 1998 by two Stanford Ph.D. students, Larry Page and Sergey Brin. The company name, Google, is a play on the word “googol” which is a mathematical term for the number 1 followed by 100 zeros. Larry Page and Sergey Brin chose this name to reflect the large amount of information on the web. The two created this search engine so that people can find anything on the web all in one place. The company’s mission is “to organize the world’s information and make it universally accessible and useful.” Now, the company is far more than a search engine website, it has grown to be a substantial collection of products and services that are
In 1998, Stanford University graduates Larry Page and Sergey Brin combined their ingenuity and built a search engine called “BackRub” that evolved into what is now known as Google. Google, with over 150 domains, now functions as a search engine that offers many different products and services including web applications, advertising, sports scores, stock quotes, headlines, addresses, videos, etc. Google’s focus is “to provide useful and relevant information to the millions of people around the world as they rely on us (Google) to provide the answers they are seeking.”
Its search engine is used almost 70% worldwide. No other companies can compete for internet searches with Google. As it is the largest search engine, it also has the largest user traffic. Google is one of the most powerful brands in the world. It had more than 1.2 Billion searches. Since there are lot of user traffic due to the search engines, it is also the largest advertising company. Google gains profits through advertising and display through partnerships with third party sites. Google increased both top-line and bottom-line
This advantage has manifested with the Google 's businesses and is the reason why it continues to grow.
Technological Growth: The majority of the world knows that Google was not the first to come up with the search website, advertisements, or email. What makes Google a market leader is, its innovated and differentiation of all those things better than its predecessors and competitors. Google is years ahead of its competitors, because it found different ways to help the community. Google decided that web search was not enough, so it competed in the browser and operating system market with Chrome and Android. Due to technology growing at a fast pace, Google made its major priority to not be left behind while the world is evolving.