Google Case Study

Sarah Shewchuk

Case A1 – Google Inc.

February 6th, 2018

Main Problem Google is in an industry that is rapidly changing due to competitor innovations and other environmental factors.  The main problem that Google is facing today is how they will continue to compete in the fast-paced industry without losing focus of their core-competencies, and ultimately their competitive advantage.  It is vital to keep innovation centered around what they do best, thus the biggest problem identified.  When there are too many functions that distract from the core business, product up-keep falls behind.  

Industry Analysis Before analyzing external factors affecting Google, the industry must be defined.  The industry that Google is in can be defined as one that provides users web-based search tools.  Based on this definition, we can understand what factors (based on the 5 forces model) are shaping the industry.  Threat of new entrants to the industry is the first force.  In the web-based search industry, the threat of new entrants is relatively low.  It can be classified as low because it requires an incredible amount of start-up time, resources and capital to get your foot in the door.  An example of this is Bing paying users to utilize their search engine.  Bing needed to do this not only to bring in traffic, but also so they could get data to make their search capabilities better.  The second force is bargaining power of buyers.  Buyers will be defined as the advertisers on internet search companies.  For this industry, buyers don't have much power against internet search companies because of the number of companies looking to advertise on a web-based platform.  Buyers do, however, have power against other buyers.  Larger companies will typically outbid smaller/local companies for advertising space on internet service companies.  The third force is bargaining power of suppliers.  Suppliers will be defined as the developers and software engineers, as well as internet search providers (Cox, CenturyLink, Windstream, etc.).  Developers and software engineers have power as suppliers in this industry because if they feel they are being treated unfairly, requesting higher wages, etc., they can easily quit and go to a competing company.  Internet search providers, though, have less power because their customers are paying for specific speeds rather than specific sites. Thus, they are only supplying the internet connection.  The fourth force is the threat of substitutes.  Substitutes in the web-based search industry would be anywhere else advertisements can be found, billboards, radio, TV, newspapers, etc.  Threat of substitutes depends on who the buyers are looking to advertise to.  In today's world, many advertisers can utilize web-based searches, making the threat of substitutes relatively low.  The fifth force, that ties all the others in, is rivalry against competitors.  In this industry, rivals consistently "one-up" each other by introducing new products, services, or features right after a competitor.  With that, the rivalry against competitors is high.