2011 Principled Business Leadership Institute Case Competition Entry

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Our second place power point presentation. While you’ll miss out on key elements from our verbal presentation and are lacking the case itself - refer to the written report as well to clear up some gaps.

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2011 Principled Business Leadership Institute Case Competition Entry

  1. 1. Googleand China<br />2011 Case CompetitionAlpha Kappa Psi<br />Mike Shannon<br />Nick Currier<br />Kasey Gandham<br />Mike Shannon<br />Nick Currier<br />Kasey Gandham<br />
  2. 2. Our Negotiation Statement<br />Remain in China<br />Operating censored<br />Full uncensored operations in Hong Kong & Mecau<br />Terms: <br />Google will not release user information<br />Google will state reason of censorship<br />China will engage in a five year contract with Google <br />
  3. 3. Priorities for both parties <br />Google<br />Maintaining core principles <br />“Do no evil” <br />Obligation to shareholders<br />Capture Chinese market share<br />Protecting user’s rights <br />
  4. 4. Priorities for both parties<br />China<br />Avoid threat to one party system<br />Maintaining Chinese global identity <br />Compete economically on global scale <br />Retaining young talent <br />
  5. 5. Options for both parties <br />
  6. 6. Ethical Dilemmas <br />Google<br />“Don’t be evil”<br />World’s information universally accessible and useful<br />Effective, quick, unbiased results <br />Lost market share to Baidu <br />
  7. 7. Google’s case to China<br />Achieve technological parity with western countries<br />Reverse brain drain effect <br />Services in higher education<br />
  8. 8. Google’s case to China<br />“Googlization”: Google as a way of life<br />
  9. 9. Google’s case to China<br />Sinification to develop and maintain a non-western <br /> Chinese image<br />
  10. 10. Google’s case to China<br />Quantitative study on advertising effectiveness<br />1 ad click$1 spent  $2 revenue<br />For each ad click there are 5 “natural” search clicksEach click is only 70% as profitable an ad click$2($5 x 70%) = $7 revenue<br />$2 (ad click) + $7 (natural click) - $1 (initial investment) = $8 profit<br />
  11. 11. For $1 spent on Google advertisement <br />Ad Click + Search Click - Initial Investment = Profit <br />Chinese online advertising expenditures will increase from $1 billion to $5 billion by 2012. <br />Our market share 25% of $5 billion is $1.23 billion which we project will be spent on advertising through Google. Natural search clicks are 70% as profitable. <br />(25% x 5 billion) x 70%=8.75 billion<br />Pro Forma Income Statement of Economic Output in China<br />
  12. 12. Google’s case to stakeholders<br />Emerging economy – provide the world with information <br />Enhance globalization <br />Maximize shareholder value<br />Baidu’s rapid development<br />Uphold principles <br />
  13. 13. Respect for Cultural Background<br />19th century trade wars<br />Opium war <br />Unequal treaties <br />Local Champions<br />
  14. 14. Google’s strategic plans<br />Terms of Agreement:<br />1.Google will not release user information<br />2. Google will state reason of censorship<br />3. Google will engage in a five year contract with China<br />
  15. 15. Special Administrative Regions<br />
  16. 16. Google’s Case in 5 Years<br />Help China become a global power<br />Communication is key to globalization <br />Censorship is not efficient <br />Google’s presence in the universities <br />
  17. 17. Sources<br />Works Cited<br />Beebe, A., Hew, C., Yuequ, F., & Dailun, S. (2006). Going Global. Somers : IBM Consulting Services.<br />How Multinational Internet Companies . (2006, August). Retrieved January 29, 2011, from Human Rights: hrw.org/reports/2006/china0806/5.htm<br />John A. Quelch, K. E. (2010). Google in China (A). Harvard Business School , 2.<br />Kennedy, L. (2011, February 4). Google in China. (K. Gandham, M. Shannon, & N. Currier, Interviewers)<br />Ng, E. (2010, February 11). China's Ad Spending Hits $120 Bil. . Retrieved February 1, 2011, from Adweek.com: http://www.adweek.com/aw/content_display/news/media/e3i4c8c39f58df428b9cd3132e23a00b97d<br />Sands, L. (2008). 2008 Olympic's Impact on China. Retrieved February 2011, from Chinese Business Review: http://www.chinabusinessreview.com/public/0807/sands.html<br />Yanhong Li, R. (2005). Baidu Annaul Report . Beijing: Baudi.com, Inc. .<br />Varian, Hal. “Online Ad Auctions,” American Economic Review, May 2006.<br />Jansen, Bernard and Amanda Spink. “Investigating customer click through behaviour with integrated sponsored and nonsponsored results,” International Journal of Internet Marketing and Advertising, 2006.<br />

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