Cyanogen Vs. Google Case Study

Theories of Strategy

Assignment 2

Cyanogen vs. Google case study

Cyanogen wishes to establish a mobile-computing platform that will compete with Google’s Android and Apple’s iOS, currently holding market shares of 78% and 18% respectively (Alpine Android, 2015). It offers an open-source mobile platform that is highly customisable and provides more features than the existing ones. This paper analyses Cyanogen’s chances to succeed in the global market for mobile platforms.

First, Porter’s (1991) Diamond model is applied. This framework is used to understand the comparative position of a nation (or a geographic region) in relation to global competition. We chose it because it provides the opportunity to analyse different elements of the case: cross-continental expansion, customer perception in poor vs. rich countries, and political interventions. Furthermore, we thought that a positioning-based view would suit best the case. Cyanogen and Google compete on the same level with regard to resources (low cost, open-source system); therefore, their challenge is largely centred on placing their product in a better position with respect to their competition.

The most important aspects of demand conditions are its “composition, size and the potential for growth” (Porter, 1991, p.112). Cyanogen faces a two-sided market: there are mobile suppliers and buyers. Mobile suppliers are oriented towards an online-platform that allows them to integrate local services; while consumers “would welcome more variety in handsets and a less dominant Google” (Alpine Android, 2015). The composition of demand is embracing the introduction of alternative products and services to Google’s. This market extends to Micromax in India and Kazam in Europe, with the potential to expand to poor countries: “smartphones adapted to local tastes are likely to spread faster” (Alpine Android, 2015). While there are many countries that are welcoming the initiative, the potential for growth is not clear. There are concerns that Cyanogen might never be able to expand to rich countries; where Google seems to be dominant. For the moment, the potential for expansion is centred on Europe and “poor countries”.

Porter (1991) maintains that the most important resources are specialized; since “generalized factor pools are either readily available or easy to source through global networks” (p.111). This means that the resources that are important to maintain competitive advantage are those that are highly specialized to the needs of an industry. While open-source software would constitute a specialized resource, Google’s Android is open-source as well. The factor that is important to Cyanogen’s advantage is the presence of venture capitals that are ready to fund its software. Other than “big Silicon valley venture-capital firms” (Alpine Android, 2015), Cyanogen gained the support of Telefonica and popular app-makers Twitter and Facebook, which have also invested in the firm. Although Google enjoys high share prices and a large scale of investors, this adds substantively to Cyanogen’s chances to succeed. The third element of Porter’s (1991) Diamond is the presence of related and supporting industries that are internationally competitive. The greatest internationally-relevant support for Cyanogen comes from mobile providers, telecommunications providers, popular app makers and vendors. The advantage of being supported from mobile suppliers is that Cyanogen has the opportunity to innovate the design, functions, and features of its services and to accelerate the integration with the needs of local customers. Moreover, many of these global players have invested in Cyanogen. This provides the firm with the opportunity to create a network where these players can share information and identify new market opportunities. Microsoft agreed to provide the mobile version of office and other services on Cyanogen’s mobile platform (Alpine Android, 2015). The support of global players such as Facebook, Twitter, and Microsoft raises the barriers to competition; in fact, those firms that wish to enter the market for mobile platforms will struggle to provide customers with comparable products and services.