Strategic positioning involves the formulation of strategies that will govern an organization’s future operations, while taking into account the prevalent environmental position that the company is in. Strategic managers evaluate the company’s present as well as foreseeable developments and harmonize them in a way that they are able to achieve the company’s goals and objectives as well as those of its particular stakeholders.
Google as a company has over time grown to become one of the major internet companies in the world. This, however, doesn’t mean that its managers are resting easy as they are faced by a lot of competition in the market.
Their portfolio of products has grown from the original search engine service to include: Earth; Picasa; Talk; Gmail; Visigami; SketchUp; Google News; iGoogle; Google Mobilizer; Google Reader; Chrome; Google Latitude; Google Talk; Google Sync; Google Maps; Ad Sense; iGoogle; Knol; Google Mini; Google Trends; Orkut; Google health; Google Double click; Google FeedBurner; Google Mobilizer; Google Gadgets; and Google Profiles.
2. Organizational analysis
Google as an organization has not succeeded to its current position without challenges. The success of its managers in the last decade has been as a result of careful analysis of their market position before formulating any policies that would spur growth. The organizational analysis is best explained through a SWOT analysis of the organization as it is today.
Google has enjoyed domination over the search engine market since its inception in 1997. This has ensured that it enjoys a competitive edge over new market entrants as well as a steady flow of income. They enjoy a huge portfolio of assets and have a market capitalization of over $ 185.61 billion which allows them to launch powerful competitive strategies against their competitors as well as fund their research and development strategies (Sherman 39).
This has ensured that they are among the top ten biggest brands in the world and this boost market confidence and grows customer loyalty. Their products have received acceptance in the market where the search engine has been identified to be quite fast and user-friendly. They also have a huge workforce of talented and creative people. Their diverse products secure their revenue flows even though their search engine is the main source of their revenue.
Though the company enjoys a wide array of products, its revenues stream mainly from their search based advertising and this increases their risk as their risk portfolio is not diversified. There is also the fact that their ranking technology has been identified to be prone to manipulations by spammers who create a lot of links as this gives them a higher rank. It has a contextual advertising policy that is considered less effective in generating sales.
Though it is the major search engine in the world, it still answer questions with 50 to 60 percent accuracy, and its localized searched have been identified to be erroneous at times. They are known to hire a lot of contractors all over the world and most of them have been identified to do nothing which then means they are a waste of resources. Though they pioneered the search engine market, they failed to establish barriers that would give them an edge against their competitors who are finding it easy to enter the market.
Some of the players in the same industry like Microsoft are proposing that web services should be provided to work in relation to installed software, rather than what is being advocated as software as a service.
This means that with their wide array of products and especially the chrome operating system, they will capture more customers as well as new revenue flows as their loyal customers will want to have their web compatible software. Since it controls about 85 percent of all web searches, this would weaken some of their strong competitors such as Microsoft since they already enjoy a huge portfolio of loyal customers.
They also have the opportunity to increase the portfolio of their products as market domination gives them a competitive edge. The fact that they have other most widely used search engine means that they can add localized vendors paid advertisement on localized searches.
There is also the unconventional internet market where they can provide more services for hand-held devices such as mobile phones through applications. With their huge capacity they do not even have to go through the whole process of creating products from scratch since they can merge with other small ventures that are in the same business.
Google has been suffering from a number of law suits launched by its competitors in the market and these threaten to deny them access to the control over the indexing policy that they currently enjoy. This also threatens to impose a censorship which will probably limit the effectiveness of many of their services.
They have also suffered a legal suit related to their collection of search habits from their consumers as this has been identified to erode public perception (Gibbs, and Humphries 104). Though they have been able to fight most of the legal challenges that they have been facing in the last few years, it is only an indication of many more to come unless they improve on their legal strategies and strengthen their legal teams.
It has been identified that their use of AOL may lead to loss of revenues as well as the adoption of the pay by click billing for advertisers. All this challenges coupled with the fact that most of their main competitors are also growing stronger in capacity every day, threatens to weaken its strong brand name and reduce its competitive edge in the market.
3. Stakeholder analysis
Google’s internal environment has been identified to be quite divers as they have incorporated professionals from different sector and geographical backgrounds. They have a robust and clearly set out management strategy as well as a management structure that ensures effectiveness and innovation.
Though at the onset they had mainly concentrated on innovation, they have learned to incorporate strong business and legal policies as the business grows. The company maintains a homely and serene atmosphere where their workers are comfortable and are, therefore, able to give all their best to the achievement of the company’s goals and mission. This also promotes creativity, which is embedded in the company’s values as well as customer service.
4. Competencies and strategic positioning
The operations strategy at Google has over time concentrated on improving the efficiency of their operations so as to increase customer satisfaction. This has seen them come up with cost effective ways of availing their products and services to their customers.
Google has invested heavily in research and development and this has allowed them to come up with not only new products, but also superior versions of their old products. This has ensured that their customers are constantly supplied with products that fit its specific as well as market needs (Ireland, Hitt, and Hoskisson 162). It has also ensured that they remain market leaders by developing new products before their competitors have had time to imitate those that they already have.
The financial strategy at Google has overtime surpassed its former challenges that some of their competitors struggle with. The company has now attracted huge investors, who have supported it all through its financial and legal woes.
They are now able to enjoy financial comfort due to their many assets as well as huge revenue in-flows. In the initial stages of the company’s establishment they might have struggled with the raising of capital, its financial strategy paid off even though they only had one investor at the time (Scarborough, Wilson, and Zimmerer 45).
4.1 Business-level strategy of Google
Google should concentrate on differentiation as they will innovatively manage to design their products in a way that they cannot be easily imitated by any of their competitors. The uniqueness of their products has previously managed to reap them great benefits in terms of a huge portfolio of loyal customers (Grant 127). This will secure the inflow of income as any new product that is associated with Google will be quickly adopted by their customers.
It will also ensure that they minimize threats from their competitors. With this strategy, they are in a position to control the pricing of their products even when market forces increase their operating costs, due to the ability to adjust costs without worrying about losing customers. With the popularity of the brand which comes with brand loyalty, they do not have to worry about powerful buyers or distributors, and this also minimizes their substitute threats.
4.2 Corporate-level strategy
Google should adopt concentration as a strategy since it is mainly characterized by the move to focus on web-based service market, which is their main niche, by customizing their search engine to fit the changing needs of the market. Concentration is meant to increase customer satisfaction while at the same time increasing the loyalty of customers.
This should ensure long-term revenue in-flows which would serve to increase their competitive edge. This is also geared towards securing their cash inflows through numerous sources of revenue while at the same time ensuring that their customers have a whole package of products to work with rather than having to seek substitute products from their competitors.
4.3 International-level strategy
Google should adopt a global international-level strategy which will allow the company to effectively compete in its international market, by offering standard products that are of the same quality all over the world for all their customers. This will also allow them to have similar results in all the markets that they venture into by standardizing their marketing strategies while fitting them to their respective target markets.
This is not only cost effective, but also increases customer loyalty especially since online products are borderless. The cost effectiveness is as a result of the sharing of total costs and their capacity to employ economies of scale by servicing one major global market (Daft 75). Since their products are mostly available online, they do not have to invest heavily in production infrastructure in every country that they operate in, hence the efficiency of the global strategy.
Daft, Richard. Organization theory and design. Upper Saddle River: Cengage Learning. 2007. Print.
Gibbs, Richard, and Humphries, Andrew. Strategic alliances & marketing partnerships: gaining competitive advantage through collaboration and partnering. London: Kogan Page Publishers. 2009. Print.
Grant, Robert. Contemporary Strategy Analysis and Cases: Text and Cases. New York: John Wiley and Sons. 2010. Print.
Ireland, Duane, Hitt, Michael, and Hoskisson, Robert. Understanding Business Strategy: Concepts and Cases. Upper Saddle River: Cengage Learning. 2011. Print.
Scarborough, Norman, Wilson, Douglas, and Zimmerer, Thomas. Effective small business management: an entrepreneurial approach. New York: Prentice Hall. 2008. Print.
Sherman, Chris. Google power: unleash the full potential of Google. New York: McGraw-Hill Prof Med/Tech. 2005. Print.