GOOGLE Strategic Analysis
The Vision    To make search engines so powerful they would    understand "everything in the world".The Mission    To orga...
Google Strategy• It’s the same as of Honda & Sony• Both these companies have major share in  world manufacture share of En...
QUESTION?• IS GOOGLE IN THE RIGHT INDUSTRY?          Let’s Analyze the Industry
The Industry Stats
Country AnalysisCountry      Users (Mn) Usage Growth                         (2000-2007)  US          210.00        120.80...
QUESTION?IS GOOGLE IN THE RIGHT BUSINESS?Lets Look at Products and Rev Model.
Google Products (>60)    Web                Standalone       Communication &   Search             Applications          pu...
Core Products & Revenue Model• Core Products – Search and Adwords.•   Revenue Sources -•   Contextual Ads - Adsense.•   Ad...
Internet Advertising - 2007Global - By E-Marketer• Number 1 – Advertising Medium in terms of growth  rate.• Ad spending on...
Internet Advertising Trend         and PredictionsGlobal - By Zenith Optimedia
Internet Advertising Trend               and PredictionsGlobal - By Zenith Optimedia - continued• The internet will grow s...
Global Market Share     in Search   Total search in year 2006  99.57 Bn   Google is doing 138.1 Mn search per day
Porter’s Five Forces Model for Google                Search                    Supplier bargaining power :                ...
QUESTION?• WHAT MAKES GOOGLE?    ANDAR KI BAAT
Leadership•   Dr. Eric Schmidt,•   Chairman of the Board and Chief Executive Officer•   Larry Page, Co-Founder & President...
Philosophy of Google•   Focus on the user and all else will follow.•   Its best to do one thing, and do it well.•   Fast i...
Google’s Culture•   Heart of Small Company•   Hand’s on contribution to the Products by each employee•   Flat Hierarchy•  ...
Google’s Global Presence•21 countries at present
Uniqueness about GoogleSEARCH• Speed, Accuracy, Objectivity and Ease of use of.• Fit between their technology and the cons...
Uniqueness about Google•   1st to get it right advantage•   Advertisers tie up as “CPC”•   Trade off between “Speed” & “Co...
Continuous Innovation
Biz Model•   User Info•   Social Networking•   Page Rank•   Relative Importance•   Customization•   Contextual Advertising
•   competitive advantage comes from its core competencies in computer    hardware and software engineering
Value Chain
Dynamic View             Buying many sites,              Searching for various             Opening offices in many        ...
QUESTION?• WHAT IS GOOGLE PITTED AGAINST?        THE BATTLE ZONE
Competitive Landscape         Search
Competitive Landscape        Advertising
Competitive Landscape   Video     Blogging
Competitive Landscape      Social Networking
QUESTION?• HOW WOULD GOOGLE CLASSIFY THESE    PLAYERS AND WHO ARE THE TOP           COMPETITORS?    THE BATTLE ZONE – Part...
Direct Competitors        OR Complementors?•   Internet companies,•   web search providers,•   Internet access providers,•...
Indirect Competition       Or Complementors?• Competition from traditional media  companies.• Most large advertisers have ...
Top Competitors
Google Identifies Top 2• Primary competitors - Microsoft and Yahoo! Inc.• Both Microsoft and Yahoo have more employees tha...
Strengths AnalysisWeaknesses Analysis
Threats Analysis        Common Opportunities• BRIC Countries•Computer literacy is on the rise•Telecommuting and at-home-bu...
Competitor Analysis•   Google – Aim – To make everything free for the Virtual User.
QUESTION?• SO WHAT IS GOOGLE DOING AND WHAT             SHOULD IT DO?           ACTION ITEMS
Inorganic Growth - List of                        Google acquisitions2004        2005               2006              2007...
5 year Performance
5 year Performance• R&D -> More than 10% increase Y/Y since  2002  – Continuous Innovation, creating new products.  – New ...
Recommendations• Diversify earnings not products                               Country   Revenue %                        ...
The Growth Share Matrix
Recommendation• Search : Competition from both big web companies and  well-funded startups will force Google to remain foc...
Recommendations• Be Multi-domestic company• Find new sources of revenue.• Continuous Innovation is the key to maintain  do...
Recommendations• Balance Scorecard
Have we left anyQUESTIONS unanswered?“THE POWER OF GOOGLE IS ENPOWERMENT.”
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Google ppt-1227880622128341-8

  1. 1. GOOGLE Strategic Analysis
  2. 2. The Vision To make search engines so powerful they would understand "everything in the world".The Mission To organize the worlds information and make it universally accessible and useful.The Focus Google continues to focus on innovation and on the user experience.
  3. 3. Google Strategy• It’s the same as of Honda & Sony• Both these companies have major share in world manufacture share of Engines and Electronic Goods• Google wants world wide web’s major share.
  4. 4. QUESTION?• IS GOOGLE IN THE RIGHT INDUSTRY? Let’s Analyze the Industry
  5. 5. The Industry Stats
  6. 6. Country AnalysisCountry Users (Mn) Usage Growth (2000-2007) US 210.00 120.80% China 162.00 620.00% Japan 86.30 83.30% India 42.00 740.00% Brazil 39.15 682.8% World 1173.00 225.00%
  7. 7. QUESTION?IS GOOGLE IN THE RIGHT BUSINESS?Lets Look at Products and Rev Model.
  8. 8. Google Products (>60) Web Standalone Communication & Search Applications publishing Maps AdWords Editor 3D Warehouse Ride Finder Gmail Notifier Blogger Analytics Hello Pack Calendar, Docs& Directory Photo Screensaver SpreadsheetsGoogle Mini Picasa Dodgeball SMS Secure Access FeedBurnerSearch Mash GTalk Gmail, Orkut SketchUp YouTubeAdvertising Desktop Extension Reader AdSense Blogger Web Mobile Products AdWords Comments Blogger Mobile Audio Ads Browser Sync CalendarClick-to-Call Dashboard Widgets Gmail Grants Send to Phone News TV Ads Toolbar iGoogle Reader Maps Mobile
  9. 9. Core Products & Revenue Model• Core Products – Search and Adwords.• Revenue Sources -• Contextual Ads - Adsense.• Adwords.• Licensing Google search.• Approx – 10 Billions Dollars.
  10. 10. Internet Advertising - 2007Global - By E-Marketer• Number 1 – Advertising Medium in terms of growth rate.• Ad spending on the Web should net out at $21.7 billion this year VS $20.4 billion on radio.• E-Marketer predicts that online advertising will reach $28.2 billion next year (an increase of 30 percent)• Online advertising will account for a nearly twice as many dollars - constituting a hefty $44 billion market
  11. 11. Internet Advertising Trend and PredictionsGlobal - By Zenith Optimedia
  12. 12. Internet Advertising Trend and PredictionsGlobal - By Zenith Optimedia - continued• The internet will grow six times faster than traditional media between 2006 and 2009 and increase its share of the ad market from 5.8% to 8.7%.• All of the fastest-growing ad markets are in the Middle East and Central & Eastern Europe• These regions are growing at double-digit rates, compensating for an under performing North America• World Adspend to grow 5.2% in 2007, on par with long- term trend• Olympics, elections and football to lift growth to 6.2% in 2008.
  13. 13. Global Market Share in Search Total search in year 2006  99.57 Bn Google is doing 138.1 Mn search per day
  14. 14. Porter’s Five Forces Model for Google Search Supplier bargaining power : • Supplier concentration is low • Switching costs is low • Threat of forward integration is low • Importance of volume to suppliers is high Rivalry factors: • Few players of relatively smaller size industry is growing at rapid Substitution threat: Entry barrier: •Mobile search. But due to pace •Entry barriers due to brand •Product differentiation is low less sophisticated identity and scales is high Switching cost is low technology threat is far away Exit barrier is low few years •Switching cost zero •Informational Complexity due to •Switching cost is LOW secrecy of internal algorithms Buyers bargaining power: • Buyer size/volume is very small • Change cost/frequency is very low. • product/service importance is high. • Ability to backward integrate is very less. • Price sensitivity is high • Product differentiation is low
  15. 15. QUESTION?• WHAT MAKES GOOGLE? ANDAR KI BAAT
  16. 16. Leadership• Dr. Eric Schmidt,• Chairman of the Board and Chief Executive Officer• Larry Page, Co-Founder & President, Products• Sergey Brin, Co-Founder & President, Technology
  17. 17. Philosophy of Google• Focus on the user and all else will follow.• Its best to do one thing, and do it well.• Fast is better than slow.• Democracy on the web works.• You dont need to be at your desk to need an answer.• You can make money without doing evil.• Theres always more information out there.• The need for information crosses all borders.• You can be serious without a suit.• Great just isnt good enough.
  18. 18. Google’s Culture• Heart of Small Company• Hand’s on contribution to the Products by each employee• Flat Hierarchy• Each employee having several responsibilities in different departments• Hiring Policy – Non Discriminatory – Preference of ability over experience• Multilingual company environment• Multidomestic culture• Recreation along with work• Common café for all employees
  19. 19. Google’s Global Presence•21 countries at present
  20. 20. Uniqueness about GoogleSEARCH• Speed, Accuracy, Objectivity and Ease of use of.• Fit between their technology and the consumer behavior.• Page Rank technology – Orkut merged• Solved the scale up problem• Positioned as “Fastest Crawling Technique”• Keeps the search “Up to date”
  21. 21. Uniqueness about Google• 1st to get it right advantage• Advertisers tie up as “CPC”• Trade off between “Speed” & “Compression”• Best asset utilization (Efficient storage space)• R&D expenditure = 50% Net Income(10% of Revenue)
  22. 22. Continuous Innovation
  23. 23. Biz Model• User Info• Social Networking• Page Rank• Relative Importance• Customization• Contextual Advertising
  24. 24. • competitive advantage comes from its core competencies in computer hardware and software engineering
  25. 25. Value Chain
  26. 26. Dynamic View Buying many sites, Searching for various Opening offices in many avenues, Continuous Countries, Huge investment in innovation, Developing R&D, Continuous investment in people, learning new increasing Database technologiesResource Resource ActivitiesEndowments Commitment
  27. 27. QUESTION?• WHAT IS GOOGLE PITTED AGAINST? THE BATTLE ZONE
  28. 28. Competitive Landscape Search
  29. 29. Competitive Landscape Advertising
  30. 30. Competitive Landscape Video Blogging
  31. 31. Competitive Landscape Social Networking
  32. 32. QUESTION?• HOW WOULD GOOGLE CLASSIFY THESE PLAYERS AND WHO ARE THE TOP COMPETITORS? THE BATTLE ZONE – Part Deux
  33. 33. Direct Competitors OR Complementors?• Internet companies,• web search providers,• Internet access providers,• Internet advertising companies
  34. 34. Indirect Competition Or Complementors?• Competition from traditional media companies.• Most large advertisers have set advertising budgets, a very small portion of which is allocated to Internet advertising.
  35. 35. Top Competitors
  36. 36. Google Identifies Top 2• Primary competitors - Microsoft and Yahoo! Inc.• Both Microsoft and Yahoo have more employees than Google. – Microsoft 6 times.• Microsoft also has significantly more cash resources.• Longer operating histories and more established relationships with customers and end users.• Microsoft and Yahoo also may have a greater ability to attract and retain users - because they operate Internet portals with a broad range of content products and services.
  37. 37. Strengths AnalysisWeaknesses Analysis
  38. 38. Threats Analysis Common Opportunities• BRIC Countries•Computer literacy is on the rise•Telecommuting and at-home-businesses growth•Mobile technologies offer another opportunity.•Cheaper global telecommunication costs open new markets Google Yahoo Microsoft Traditional ad domain Other Software Pay Per Use office Office Suites Apps. Internet Ads
  39. 39. Competitor Analysis• Google – Aim – To make everything free for the Virtual User.
  40. 40. QUESTION?• SO WHAT IS GOOGLE DOING AND WHAT SHOULD IT DO? ACTION ITEMS
  41. 41. Inorganic Growth - List of Google acquisitions2004 2005 2006 2007 2008 2Web Technologies dMarc Xunlei Phatbits Broadcasting– Adscape – Video Urchin S/W Inc. Radio Advertising Game advertising Dodgeball Trendalyzer Reqwireless Measure Map Tonic Systems Current Comm. Group Upstartle Marratech Android @Last Software GreenBorder Skia Orion Panoramio Akwan InfoTech Neven Vision FeedBurner AOL (5% stake) JotSpot PeakStream -Internet YouTube- Video Zenter Sharing Grand Central – VOIP Endoxon
  42. 42. 5 year Performance
  43. 43. 5 year Performance• R&D -> More than 10% increase Y/Y since 2002 – Continuous Innovation, creating new products. – New products every year, Need Based Positioning, Depth rather than Breadth. – Ready to deal with dramatic change.• Cost of Revenue – around 40% increase Y/Y since 2003 – Find new sources of Revenue, margins reducing.
  44. 44. Recommendations• Diversify earnings not products Country Revenue % US 61% UK 14% Rest Of 25% World
  45. 45. The Growth Share Matrix
  46. 46. Recommendation• Search : Competition from both big web companies and well-funded startups will force Google to remain focused on continuing to innovate in search.• Contextual Ads – Continue good work• Other Ad formats - With Google clearly intent on spreading its advertising platform to the offline world, go for more acquisitions.• Video – Continue Good work. Consolidate position.• Social Networking – Acquire other players.• Office Suite – Continuous R&D
  47. 47. Recommendations• Be Multi-domestic company• Find new sources of revenue.• Continuous Innovation is the key to maintain dominance in such an aggressive environment.• Concentrate on BRIC nations.
  48. 48. Recommendations• Balance Scorecard
  49. 49. Have we left anyQUESTIONS unanswered?“THE POWER OF GOOGLE IS ENPOWERMENT.”

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