Strategic Management Decisions Based On The Company 's Resources, Organizational Goals, And The Competitors Market

1942 WordsMay 12, 20158 Pages
The Google Case Study Lionell C. Henderson Northwood University MBA 664: Satisfying Shareholders Spring 2015 – Evening Professor Adam Guerrero, PhD. Introduction The Google case is predicated on strategic management decisions based on the company’s resources, organizational goals, and the competitors market. These decisions are necessary and important for creating growth and increasing market share within the alignment and scope of the company’s vision. “Value creating growth is the strategic challenge, and to succeed, companies must be good at developing new, potentially disruptive businesses” (Rappaport, 2006). With this in mind, Google is trying to decide whether to venture into new markets such as: e-commerce, the portal…show more content…
Given ads with high CPC bids, but low CTR’s, the paid listings provider would acquire only a of small amount revenue. “Google weighted CPC bids by the ratio of an ad’s actual click through rate (CTR) to its statistically derived expected CTR” (Eisenmann and Herman, 2006). Google optimized its revenue with the use of this method. By 2003, Google and Overture dominated the paid listings business, owning 90% of the global market. Google and its associates also captured 55% of the internet’s search volume in contrast to Overture’s 45%, which provided very little market space for any new competitors entering the paid listings business and at a very high cost. Problem Statement The problem exists because in 2005, Google’s purchased 5% ownership in Time Warner’s AOL for $1 billion. The company also supplied Time Warner with ads totaling $300 million in credit, on their website promoting their products. This provided a significant amount of added revenue and market share. It allowed the company to expand their new product line of Google Desktop, Gmail, Google Book Search, Google Maps, and Google Talk, into new markets. The inclusion of these new products on Google’s home web page was important because it provided the impression Google was about to enter the portal business with its products Gmail and Talk, which would create competition for Microsoft’s MSN and YaHoo! Amazon and eBay may be targeted as well with the development of a
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