Google Case

Case 10: Google

1. Discuss competition in the search industry. Which of the five competitive forces seem strongest? Weakest? What is your assessment of overall industry attractiveness?

Google is in the driver seat position in the search industry with almost 85% of the market share, according to the most recent data provided by netmarketshare.com. Yahoo is a distant second with roughly 8%, followed by Bing with 4%, Baidu with 2%, and AOL picking up the scraps.

Among the five competitive forces, the rivalry among competing sellers is the strongest competitive force. Since they all offer the same service, the users are prone to switching to other search engines. A lapse in service or a major network crash can drive away people overnight. Google must always be at their best to ensure their lead in the search industry. Scandals like the spying accusations on Google can tarnish their image and cause people to patronize other search engines. The weakest competitive force is the threat of new entrants. Since Google and the rest of the search engines are already established and technologically advanced, new entrants will have a hard time competing with the search engine giants. For new entrants to succeed, they must be able to top the service of Google and the other search engines. Google and the other existing search engines already have the search history of old users, putting them at an advantage over potentially new entrants. The industry is very attractive due to it being a relatively new industry. Technological advances can push the industry to greater heights.

2. How is the search industry changing? What forces seem most likely to bring about major change to the industry within the next three to five years?

The search industry is changing very fast. Before, search engine are simple and plain sites that help people to see what they are looking for but now search engine are now being dynamic and incorporating other capabilities and applications in their arsenal. Now, search engines are capable of making use of word processing, spreadsheets, mail, calendar, instant messaging, presentation software, file storage and cloud computing.

The forces that will bring about major change to the industry within the next three to five years are emerging new internet capabilities and applications, product innovation, technological change and manufacturing process innovation, changing societal concerns, attitudes and lifestyle.

Given that search engines are totally dependent on the Internet, it is quite important that the force of emerging new Internet capabilities and applications are very critical in the next three to five years. It because with the ability of search engine to improve their service in line with the new internet capabilities and application would greatly