Strategic Analysis of Google

Introduction

Google Inc. is an information technology originating in Mountain View, California, that has grown spectacularly from its launch in 1999 to the present time. During that time, the number of services available from Google has exploded, to the point where there is now exceptional variety in its offerings. This naturally begs the question of what strategic direction the company should take to sustain its past performance going forward.

Strategic Issues

Key factors behind Google’s early success

Before the plethora of products that Google now offers existed, the company was first and foremost an exceptionally good search engine. Google’s stated philosophy was to understand the needs of the users, give them exactly what they want and do it fast. In the beginning, therefore, Google followed a needs-based positioning strategy (Porter, 1996), and these activities differentiated them to such an extent so as to deliver unique value. Google recognised that their work in solving search problems gives them a unique value proposition even states their belief that “It’s best to do one thing really, really well.”

Getting a loyal fan base is only the start, though; capitalising on your position to make money is more important. Another factor that led to Google’s success in these early years was the superiority in their business model when it came to advertisers on paid-listings. The combination of better ranking policy together with the increased customer traffic made advertising on Google more attractive, both for Google and the advertisers themselves.

Concentration of the search business

The search business has been likened to an arms race and in cases like this; it is generally the two with the biggest guns that win while the rest eventually cease to exist. In the case