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Strategic Management module assignment case 3 (iTunes)
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A case report (3) about Google for the module Strategic Management.
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Strategic Management11/4/2014
STENDEN
UNIVERSITY CASE REPORT 3
| Daphne Bennink, Linda van Duijvenvoorde, Robin van Rossum,
Boyan de Boer and Chloë Karsseboom
, Case reports 3
Commissioned by Stenden University Leeuwarden
Media and Entertainment Management
Module: Strategic Management in the Media
Tutor: Fan Ding
Submission date: 11-04-2014
Authors:
Daphne Bennink 208728
Linda van Duijvenvoorde 236454
Robin van Rossum 218634
Boyan de Boer 225878
Chloë Karsseboom 203955
1
,Preface
Strategy Consulting, commissioned by Stenden University Leeuwarden, writes this strategic
proposal. The assignment was to write a case report about Google.
By means of this preface we want to thank some people who helped us during this process. Our
word of thanks goes to Fan Ding in the first place, who helped us these four weeks and clarified
some issues regarding this case report. Furthermore we would like to thank Ronald Dikkeboom for
the lectures he gave us with a lot of information. Finally, we want to thank the second sources we
used for this process. Without these sources it would have been more difficult to come up with
business-level strategies for Google.
Daphne Bennink, Linda van Duijvenvoorde, Robin van Rossum, Boyan de Boer and Chloë
Karsseboom
2
,Management summary
The financial situation of Google is very good. Google is one of the most profitable companies in the
world. This success is based on the ability to provide data for free and online advertising. Due to the
excellent financial situation, it is very difficult for competitors to compete. This is a competitive
advantage for Google.
Google offers free products and services with high quality. The products and services are user
friendly. Google built their own infrastructure consisting of servers, storage systems and hardware in
order to provide high quality. Google is the second most innovative company in the world according
to Boston Consulting Group. This innovative culture is one of the main competitive advantages of
Google. In order to make this advantage sustainable, Google must continue to innovate.
Google provides open source products and services. This ‘openness’ is one of the reasons why
Google is doing so well.
Through the PESTEL model the external environment of Google was analyzed. Some of the outcomes
were that Google could mostly always manipulate laws, since most countries don’t have identified
laws on online information. However China has been adding regulations that enable Google to
operate on their terms. Also, Google doesn’t seem to be affected by the economic recession all over
the world. Since Google relies on investments, countries like the UK, USA, South Africa, India and
China with an high average interest rate can have many opportunities. Social-culturally Google may
have some threats. Mostly because of cultural differences and the fact that Google saves personal
information and data entered for 24 months. Google has already been criticized and accused of
harmful acts towards the privacy of people, because of this. In the technological factor Google has
many opportunities. Google has already bought around 131 companies, where they can benefit from
their creativity and knowledge. Next to that Google and Facebook dominate the mobile advertising
market. And for the ecological factor, Google has been working on becoming ‘‘green’’. Which has
many more opportunities.
Google's corporate-level strategy is to be a leading innovator in any business the company enters.
The horizontal integration is seen as the companies which Google bought related to activities with
their search engine and search advertisements, to increase market share and improve own products.
The vertical integration is focused on bought companies and focused on new markets and products.
With regard to the organizational design of Google, the structure was flat and is reportedly based on
teams. Google's 20% rule and the setting up of forums on its internal network are the biggest
opportunities. The culture is known as a company which is always emphasizing positive things, but
also hard working and not scaling that well. Teams often work all together on the same project. A
component of the control systems is the 20% rule as well. Google makes it difficult to give feedback
and control the employees. The important core values are "Don't be evil" and "Focus on the user,
and all else will follow". Furthermore, Google said that they make decisions which are data driven
and ensures employees are working in a supportive and stimulating environment.
A business unit of Google is YouTube, which Google bought a few years ago. With YouTube Google
wants to dominate on more multiple platforms. A strategy to compete is make their competitors
vulnerable. With regard to the industry environment, the risk of entry is very high, the rivalry among
established companies is not excising, the bargaining power of buyers and suppliers is not really high
and it very hard to find substitute products.
3
, Table of contents
Management summary ................................................................................................................ 3
Table of contents ......................................................................................................................... 4
Opening ....................................................................................................................................... 6
Summary of case 3: Google ................................................................................................................ 6
Google’s history, development and growth........................................................................................ 7
What does Google’s history look like and what kind of developments and growths do they have? 7
Google’s business model, mission and vision ..................................................................................... 8
Problem statement and sub-questions ....................................................................................... 10
Problem statement ........................................................................................................................... 10
Sub-questions.................................................................................................................................... 10
Gathering the facts .................................................................................................................... 11
Internal analysis................................................................................................................................ 11
How has Google created and sustained its competitive advantage?............................................... 11
External analysis ........................................................................................................................ 12
What are the relevant issues within the external environment of Google? ..................................... 12
SWOT-analysis Google ............................................................................................................... 13
What are Google’s internal strengths and weaknesses and external opportunities and threats? .. 13
Strengths: ..................................................................................................................................... 13
Weaknesses: ................................................................................................................................. 13
Opportunities: .............................................................................................................................. 14
Threats: ........................................................................................................................................ 14
SWOT ................................................................................................................................................ 14
Google’s corporate level strategy & organizational design .......................................................... 15
What is Google’s corporate-level strategy and its organizational design? ...................................... 15
Google’s business-level strategy and business unit ..................................................................... 17
What is the business-level strategy and the industry environment of a particular business unit of
Google? ............................................................................................................................................. 17
The alternative course of action and decision and reasoning ....................................................... 19
3 business level strategies .......................................................................................................... 19
What are the three most suitable business-level strategies for the chosen business unit of Google?
.......................................................................................................................................................... 19
Strategy 3 – Attracting new users by entering new markets, in order to attract more advertisers 19
Which business-level strategy is most suitable for this business unit of Google? ........................... 20
Implementation ......................................................................................................................... 21
Functional objectives ........................................................................................................................ 21
4
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