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Google S.W.O.T. Analysis


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This was research paper that was written by my group in my Managing Organizations class with Dr. Chio.

Published in: Technology, Business

Google S.W.O.T. Analysis

  1. 1. S.W.O.T. AnalysisTeam A5:Rachel Brown, Jena Smith, Tien Phan, Cale Ramsaur, German BrynzaMGMT 300A10/27/2009<br />S.W.O.T. Analysis<br />In 1996, Larry Page and Sergey Brin, Stanford University PhD students, began a research project that they hoped would “develop the enabling technologies for a single, integrated and universal digital library” (History, 2009). The pair began exploring the mathematical components of the World Wide Web, familiarizing them with its overall structure. Based on back links ranked by relativity, Page and Brin struck gold with their newly designed search engine that produced improved, more pertinent search results. “Google” was named in 1998, a pun denoting it’s meaning as the vast amount of information in the world.<br />The company’s general mission is to organize information from around the world and it make universally accessible and useful (Corporate Info, 2009). Google provides software such as Google Toolbar, Google Chrome, and Gmail, all of which are inexpensive, straightforward and continuously updated. Though Google began as a search engine, it has continued to improve and enhance its many operations and has also generated revenue through advertising means that are cost-effective and highly relevant (Corporate Info, 2009).<br />By starting out small and growing into such a massive business, Google has the opportunity to grow even more by analyzing its current status. In doing an analysis of S.W.O.T (strengths, weaknesses, opportunities, threats), Google can determine and be aware of itself by holding on, or improving strengths, limiting weakness, grasping opportunities, and being conscious of threats. To look at each of them carefully, it’s vital to distinguish that strengths and weaknesses are sources that affect the company’s internal environment. Conversely, opportunities and threats are factors in the external environment that affect an organization.<br />Strengths<br />Due to Google Inc.’s recent upsurge of popularity, and its interminable technological advances to provide better user experiences, the company has developed a vital competitive advantage, the success of brand equity. Google has been able to distinguish its services from all others and has gained a “high awareness, perceived quality, and brand loyalty” (Lamb, Hair, & McDaniel, 2009, p.139) through it’s branding, which continues to make it the most frequently used search engine. “Recent efforts to revolutionize Web searching have failed to unseat the dominant California company, which captures nearly 64 percent of U.S. online searches, according to comScore” (Sutter, 2009). In 2009, Google was ranked number one in Millward Brown’s BrandZ Top 100 Brands Report. “Unsurprisingly, Google tops the list for the third year in a row, with the Google brand valued at $100 billion, rising 16% in value over the past year from $86 billion” (Rao, 2009). According to Eileen Campbell (2007), Millward Brown’s global CEO, companies that achieve such a prestige “prove that a blend of good business leadership, responsible financial management and powerful marketing are an unbeatable combination that can be leveraged to create and grow corporate wealth” (“Google Rises”, 2007). With the implementation of strong marketing, effective business leadership, and efficient financial management, Google will be better able to maintain its brand equity and preserve consumer loyalty.<br />Even in times of a distressing recession, Google Inc. remains profitable through its thriving advertising scheme. Advertisement is a critical competitive advantage for the company in that it creates a majority of the companies earnings “Google said revenue totaled $5.94 billion, a 7 percent increase from a year ago, thanks to rising ad spending on its sites and those of its affiliates” (Temple, 2009, p.1). Google’s advertising program, AdWords, enables businesses to display their products and services as links that appear in search results relevant to the consumer’s search. Businesses are then only required to pay if their ads are clicked on, and with a world-renowned site such as Google, it is easy to comprehend how often a business, and Google for that matter, may profit from this reputation. In 2009, “aggregate paid clicks, the instances when consumers click on ads, rose 14 percent from a year ago during the third quarter” (Temples, 2009, p.1). According to research firm comScore Inc., Google continues to hold a commanding lead in the online search industry, with control of roughly 64.9 percent of the market in September, a 0.3 percent increase from august (Temple, 2009, p.1). It is because of this commanding lead that businesses continue to aspire to market their products through Google. With You Tube single-handedly averaging one billion views per day, one can easily grasp as to why Google remains one of the most useful advertising tools on the World Wide Web.<br />Though Google has many strengths, as stated previously, the company also has several set backs, or weaknesses, that have prevented it from standing faultless. Two primary weaknesses that have been recently exposed and have been sought after to weaken Google, are issues of technology and filtering of material.<br />Weaknesses<br />Google’s technology compromises the privacy of users through different sources such as Gmail, an email server that “stores messages where users cannot permanently delete them” (Swartz, 2004). Gmail has not been considered the only weakness in compromising privacy, but Google Search as well. “Google Inc. is experimenting with a new feature that enables users of its online search engine to see all of their past search requests and results, creating a computer ‘peephole’ that could prove helpful as well as embarrassing” (“Google Service,” 2005). Because Google Search is still highly popular today, it has built itself into a distinctive competency, by conveying value to their consumers through free use of Gmail and Google Search. But because of defects in technology, Google could and will lose customers drastically if changes are not made.<br />Another key factor that contests Google’s ideal reputation is the filtering of material supplied. Filtering varying items such as images and text has been inadequate on Google’s part. Because of this, the U.S. Justice Department called for “billions of user search requests and website addresses to support a study that might help revive a law meant to protect children from explicit online content” (“U.S. Demands,” 2006). Competitors such as AOL, Yahoo, and Microsoft came forward with their search results and websites URLs that were requested for analyzing filters, but Google withdrew, believing that it “would impose on it’s users’ privacy and trade secrets” (“U.S. Demands”, 2006). This not only contradicts Google’s privacy in the context of Gmail and Google Search, but it also portrayed weakness from within the organization because this area can become a potential area to poke holes at. Also, by being threatened and withdrawing from investigation, Google’s management made a poor decision, which is showing a weakness in its filtering capacity inside the organization. This weakness exhibits that their content material was not up to the satisfaction of the government, who intended “to use the search results in an attempt to prove that filters are ineffective” (“U.S. Demands,” 2006).<br />By identifying these two primary weaknesses and several strengths as stated earlier, Google is still capable of monopolizing its status by renovating its current position and through the continuance of its superior adaptation and advancement. This is possible through taking advantage of opportunities. <br />Opportunities<br />With the recent surge and demand for online books (eBooks) growing, Google is taking steps to radically alter the way consumers are able to access books. In about ten minutes and an average price of roughly eight dollars, users will be able to download any book available of their choice through Google's new partnership with On Demand Books (Hardy, 2009). Currently, Google is in the process of entering an agreement with On Demand Books which would earn their company one dollar per book that is printed through Google's search engine. In time, the opportunity for profit expansion is tremendous for Google due to the fact that the company will gain a larger corner in the market and have more ready available book titles to download, in other words, more revenue. Thanks to a recent copyright ruling allowing the distribution of books, the potential earnings will not only increase Google's stock market value, but will also help maintain Google's position of superiority on the internet. Google, as well as consumers, will thoroughly benefit from the highly accessible and much less expensive means of online book shopping.<br />Telecommunication products, such as PDA phones enabling internet access, is another opportunity that Google could gain revenue through. Recently, at the CTIA conference on Information Technology and Entertainment, Google and Verizon announced a partnership where they will launch several Android-based smart phones by the end of the year and will continue to collaborate on software and services (Travlos, 2009). This partnership will allow Google to sell applications to Verizon subscribers for a fee, increasing their consumer utilization and profit earnings in the process. With a current market share of 2%, Android's forecasted to see increased of up to 12% by 2012 (Travlos, 2009). Verizon, the largest phone carrier in the United States with eighty-eight million subscribers, will greatly assist Google in its endeavor to compete with Apple (Travlos, 2009). <br />Through eBooks and telecommunications, Google has positioned itself in a safe seeing to see huge expansion in its economic success along with continual market growth. Yet it is still vital for the company to be aware of threats existing in the external environment (i.e. competition, economic conditions, etc.). <br />Threats<br />Though Google may once have been a natural monopoly in the field of search engines, the recent introduction of Bing has begun inflicting a great deal of threats to the once dominant company. According to Experian Hitwise, the preeminent online competitive intelligent service, even though Google received 71% of searches in September 2009, it used to be roughly 78% before the introduction of Bing in June 2009. As an article in Wall Street Journal addressed, Joshua Buss, a 26 year old Unix administrator in Chicago, compared Google and Bing on a site known as Bingle. The result was that Google may win in overall searches, but Bing has several more advantages due to the fact that " their image and product searches are actually better than Google's, both in usability and the results delivered," Joshua stated. As far as maps and location-specific searching are concerned, Joshua noted, " Bing's actual map is a joy to use too, especially in Windows. I find Bing's map more responsive when scrolling in and panning in Google's own Chrome browser rather than Google's map." (Taylor, 2009). This is a main issue that Google is facing in consideration of Bing's recent success. <br />With the economic crisis the world is currently enduring, almost every type of business is suffering through hardships and benefit losses. " The unemployment rate, at 9.8%, is the highest in 20 years... most economists expect the jobs situation to worsen into 2010 even as economic growth picks up" (Kansas, 2009). In particular, the crisis is reverberating even in the freewheeling halls of the Googleplex. It was noted by Woods (2009) that not only has Google cut back on hiring and given notice to several thousand contractors, but also by Klanssen (2008), who also found that the company is cutting at least ten thousand strong, contact staff. Additionally, according to the Conference Board, " the consumer confidence fell to 47.7 percent this month from a revised 53.4 in September" , while " consumption accounts for about 70% of the U.S. GDP" (Min Zeng, 2009). This supports the fact that consumers hesitate to spend money during the downturn of the economy which in return threatens companies that have ads through Google, and this threatens Google’s revenues because of decreasing business. In the first quarter of 2009, Google's revenue increased 6% and then suddenly dropped to 2.9% during the second quarter in comparison to the same period in 2008. It is therefore likely that Google's report will indicate that while enduring the recession, Internet advertising revenues will continue to remain slow (Vascellaro, 2009).<br />All in all, Google is, and has remained, a thriving corporation that continues to supply consumers the advantageous means of online searching and other various software technologies. Through exploiting strengths, embracing opportunities, perfecting weaknesses, and acknowledging threats, Google can continue to dominate as not only an online search engine, but as one of the most well recognized and highly respected companies in the world. <br />References<br />Associated Press. (October 16, 2009). Ahead of the Bell: Google 3Q signals ad rebound. Forbes. Retrieved October 18, 2009 from<br /> (2009). Corporate Information-Company Overview. Retrieved October 11, 2009 from<br />Dave, Kansas. (2009, October 18). Eighty Years After the Great Crash --- ‘Is It the ‘30s Again?’ Wall Street Journal. Retrieved from<br /> (2009, October 6). Google Receives 71 Percent of Searches in September 2009. <br />(April 23, 2007). Google Rises to the Top of the BRANDZ Ranking with a Brand Value of $66,424 Million. Business Wire. Retrieved October 18, 2009, from<br />(2005). Google Service Remembers Every Search. Information Management Journal, 39(4), 8.<br />Hardy, Quinton. (2009, September 17). Google Gets On Its Paperback. Retrieved Oct. 12 from <br />(2009, October 10). History of Google. Retrieved October 11, 2009 from<br />Klaassen, Abbey. (2008). A maturing Google buckle down and searches for cost saving B to B; 12/8/2008, Vol. 93 Issue 18, p4-4 <br />Lamb, Charles W., Hair, Joseph F., & McDaniel, Carl. (2009). MKTG3. Mason, Ohio: South-Western Cengage Learning.<br />Min, Zeng. (2009, October 27). Shaky Confidence Data Stirs Treasurys. Wall Street Journal. Retrieved from<br />Rao, Leena. (April 30, 2009). In Guess Which Brand Is Now Worth $100 Billion? The Washington Post. Retrieved October 18, 2009 from<br />Sutter, John D. (2009, May 12). New Search Engines Aspire to Supplement Google. Retrieved October 24, 2009 from CNN website:<br />Swartz, N. (2004). Google's New E-Mail Service Sparks Privacy Concerns. Information Management Journal, 38(4), 6.<br />Taylor, Marisa. (2009, September 18). Mashing-Up Google and Bing. Wall Street Journal. Retrieved from<br />Temples, James. (October 16, 2009). Ads Drive Google's Profit Way Up. SFGate. Retrieved October 18, 2009 from<br />Travlos, Darcy. (2009, October 9). Google Hearts Verizon. Retrieved Oct. 12 2009 from<br />(2006). U.S. Demands Google Web Data. Information Management Journal, 40(3), 18-19. <br />Woods, Adam. (April 2009). " Shape Up Or Shut Down"<br /> <br />