Business Strategy in Global Environment

Strategy of an organization can be hairdresser by the way of performing activities than their rivals. Positioning in the market was considered as the heart of strategy. But globalization and changing technologies gifted an ever changing dynamic market in which static methodologies like positioning become obsolete. Operational effectiveness will not make a company the strategic market leader. The strategic positioning emerges from three distinct points; variety based positioning need based positioning and access based positioning. Leadership and motivating the employees are vital in the strategy implementation (Porter, HUB 1996).

We are discussing how Google has successfully incorporated various business strategy models, concepts and theories and became a strategic leader in the information age. They have a wide variety of products like search engine, mail service, Resort, youth, Picas, web browser, operating system etc. They always guide the market with newer technologies and advanced products. 2. Schools of Strategies Strategy is the key success factor of any organization. It gives the long term direction to the company.

The strategy formation depends on the scope of an organization’s activities. Competitive advantage is a short term gain in today’s dynamic market.

Henry Miniature suggested the ten schools of strategy which is ideal for a successful organization. It is mainly divided into three classes; prescriptive, descriptive and configuration. 2. 1 Prescriptive Schools The design, planning and positioning schools are coming under this class. SOOT analysis is the key element of design school. It evaluates the strengths and weaknesses of the organization by considering the opportunities and threats.

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The result will be used to design the strategy company should follow to achieve its long term and short term objectives. The strategy should fit with the internal capabilities and external possibilities.

This ‘Strategic Fit’ is corner stone of design school. It works well in stable environments but not much suitable for changing environment. The planning school is more about a formal approach which include rigorous set of activities from the analysis to the implementation. It follows the assumption made in the design school. Much brainstorming is required for planning as it direct the organization to the future. Management should take measures to modify their strategies according to the market and other environmental factors. The organization should have a real time strategy policy which can handle the ‘creative accidents’.

The position inning school is an analytical process in which we see the business in economic and competitive context of industry and find out how to improve the positioning in the market. Strategies proposed in this process will be implemented, so the market structure helps to drive the positional strategies of an organization. 2. 2 Descriptive Schools The entrepreneurial, cognitive, learning, power, cultural and environmental schools are descriptive in nature. Entrepreneurial school is about the visionary process of a charismatic founder or leader of an organization.

The intuition, wisdom, judgment, experience and insight of a arson heavily impact the strategy formulation. The cognitive school is a mental process which analyses the perception patterns and process that information. The learning school can be seen as an emergent process in which the management analyses the output of their work and find out what is working and not working and the reasons for the same. The power school deals with the process of negotiation between the power holders of the organization and the external stake holders. The cultural school is a collective process to involve everyone in the organization in strategy formulation.

The environmental school is a reactive process to the challenges imposed by the external environment. 2. 3. Configuration School The configuration school is talking about the process of transformation from one decision making system to other. Strategy is formulated for the organizational development and integrated well. A firm cannot stick to some strategy forever, they have to change as and when needed to sustain in the market. When a new strategy comes, there will be an interruption by the process of transformation. 3. Whittling’s Schools Of Strategy Whetting classified strategies into main four main approaches. Classical approach In classical school strategy should be formal and precise. Its main aim is to maximize the profit. It is a purposeful calculation with a long term plan. Many theorists disagree with this approach stating that this approach doesn’t have strategic creation and it is not suitable for this vigorous atmosphere. 2) Evolutionary approach In evolution Approach market determines the choices and not the managers of any organization, in this approach market is considered as very demanding and changeable so long term strategies are not acceptable, but hold the same opinion of classical approach, long term plan of profit examination.

But economists disagree with this as it stress on existence so of course it will affect the strategy of profit minimization. 3) Processors approach: It states that strategy is a process of study and adjustment. It is also saying it accepts practical view targeting the complicated process with the reason that market is not perfect or supreme. 4) Systematic Approach: This argues that company should be able to handle the situation and work accordingly. That means company environment should be adaptable to social and economical aspects to achieve the victory. 4. The Google strategy

It is important that for the success of a business that it must have a good strategy both internally and externally. As the major player of internet Google has its own strategies. First of all Google has a strong internal innovation system which can be called as its patient strategy. The first important thing that Google made is a scalable operating system. So whenever a new application is present the system allows Google to simply download the application as it IS designed with flexibility. The company has made huge investment in data base management and data tools.

Google’s basic operating system and software is compatible with third party applications. Gamma, Google maps and Google ad words are the result of this. When Google found that it doesn’t have critical management tools needed it started acquiring you tube for online videos, Picas for online photo management, key hole for satellite photos(now known as Google earth). In short Google has developed a culture which boosts innovation. The three methods of innovation used in Google are internal development,co operative relationships and acquisitions 5. Market analysis 5. PEST Analysis of Google It is always important that an organization must consider its political, economical, social and cultural factors in which it operates. The analysis of environmental factors must be continuous in nature and must be carried out in well designed plan. PEST analysis include Internal environment, micro and macro environment. Political factors Google has to consider the privacy of its users, protection of children from online predators and copy right issues. As it is a search engine it should keep in mind the political scenario of all countries as it varies from one country to another.

The government policies of different countries will affect the business in its own way. For example in China the results provided by Google are censored by the government and also the users of Google faced unwanted delays in getting the search result. By the end of the year 2005 Google lost its leading search engine name in China as the local search engine in china called Baud emerged as number one. Now the Google changed its base from China to Hong Kong based Portal. Google is also facing a preliminary antitrust investigation from European commission.

The complaint from Ciao now a part of Being search engine from Microsoft has challenged its advertising strategy of setting minimum bids. Economic factors Google is depending upon certain portals like American online and have contracts with the, Once this contracts gets terminated Google may lose a significant share of its total revenue. The global recession also affected negatively on Goggles’ cost per click advertising strategy. If Google has to leave china it will be a minor hit on Its revenue in short term but will be affecting adversely in long run.

Socio cultural factors The cultural and social factors affecting a business may vary from country to country. In case of Google the search results must be screened according to the culture of various countries. The search results should not notation offensive articles regarding a particular group of country or people. The language is another factor which Google must be concerned of. Technological factors The main problem facing by Google is that this is business has no long time barrier entries. The competitor may come up any time with similar idea and even better products and services with much less cost.

The yahoo as a portal is offering more services than Google’s conventional search results which eventually affect the Google’s priority as a search engine among the Customers. 5. SOOT analysis of Google The start of Google was like a small search company in the internet which incinerated in keep on adding new and innovative features which eventually made it the no. L search engine of all time. The start of Google was like a research project by two Stanford PhD students named Larry Page and Sergey Bring. Like every business Google too has its own strengths and weaknesses.

The SOOT analysis done is explained below in detail. Strength Google compared to other search engines is simple, reliable, fast and dependable. Google spend almost nothing for its marketing strategies as the word itself is spread through word by mouth. Google is simple and user friendly so that an average computer user can easily use it. More over it provides a comprehensive and relevant search results which will never cause confusion in the minds of the user. The operation cost of Google is very low as it depends on low cost UNIX servers.

By the year 2003 out of 300 searches conducted daily in US the Google powered searches constitute around 75% . The different user interfaces provided by the Google is one of its major strength as it provided a global acceptance for the search engine. It offers an interface of 88 languages to make people more comfortable in using the search engine. With its state of art technology in indexing pages it provides he users with the most updated search results. By using its page rank technology by considering the votes and rankings it provides the user with the important pages first.

Google is also not bias towards the advertisement as it always tried to keep the advertisements separately from its main search results. The facility called localized search helped the people to get information regarding the products, services and vendors in their local area. Weaknesses Googol?s ranking technology is manipulated by the spammed by creating dummy sites with many links which make them ranked high by the Google in its search index. The traffic analysis is not employed properly by Goggles link based ranking system.

Google’s policy of cost per click advertisement is confusing and found to be less effective as the searchers will be less attracted to ready to buy adds as they are looking for free information. The contextual search algorithms are not always cent percent accurate and there is always a chance of mistakes to be occurred. The chances for mistakes in Google’s localized search algorithms are also there because of its automated indexing. Google’s business model is unorthodox. Even though Google is the leading player in the internet search engines the accuracy rate Of its search results is between 50 to 65%.

Opportunities Google’s switching cost can be increased by keeping track of the users search history and can send emails on relevant search updates on their personal areas of interest. Like yahoo and MANS Google also can be a mass market portfolio and can in turn increase its switching cost. There is also an opportunity for Google to start private data base and print media. It can also provide services in mobile phones which will help it to go beyond the conventional internet usage methods. The retreats The termination of contracts where Google depends partially for example

AOL will result in the considerable loss of its share in revenue. The Google’s’ business has no long time entry barriers. Competitors may appear at any time with sophisticated ideas and better interfaces with less cost. As Google’s cost per click strategy is confusing and unappealing it may lose its advertisers. The launch of Longhorn, a new operating system by MANS has implicit query feature which offers the user to search web pages, blobs, computer files, attachments of emails without using a browser with the help of a single keyword search.

If Google is trying to change in to a portal it may lose its implicitly and comprehensiveness which makes it favorite among the users. The decision Of merger with an existing well established mass portal it will lose its brand name which it has created over years. 5. 3. Porters Five Forces 53. 1. Discussion Porters five forces framework is a means of assessing the profit potential of different industries. It helps in identifying the sources of competition in an industry or a sector. The five forces can be summarized as below. 1 .

Threat of entrants It will depend on the extent to which there are barriers to entry. These barriers need to be overcome by new entrants for them to compete successfully. The typical barriers are economies of scale, the capital requirement of entry, access to supply or distribution channels, customer or supplier loyalty, experience, differentiation and legislation or government action (Johnson et. Al, 2006). Threat of new entrants is high in case of Google. Only a few barriers exist for new companies to enter into this market; but the barriers to success are very high.

New entrants need to invest in only in the development of search algorithms and Computer storage; and the development of new and modern technologies gives advantage to new entrants. But, to achieve success they have to build a brand awareness and should be able to generate good traffic. 2. Threat of substitutes Substitution can reduce demand for a product as customers switch to the alternatives. The threat of a substitution depends on the benefits or values provided by the substitutes. There are only a few substitutes for internet search capabilities.

Traditional options like libraries and encyclopedias offer only a weak competition. But, the substitutes for online advertising business of Google are many, including telemarketing, print, billboards, direct mail and e-mail methods. 3. The power of buyers Internet users and advertisers are the buyers of online search products. There are many available options, even if less attractive, for internet searching, and the switching costs are low. So, the buyer power remains high. But, at present, Google is the preferred choice for the majority. 4. The power of suppliers Internet content and bandwidth are readily available.

This along with abundance of skilled labor makes supplier power very weak in this industry. 5. Competitive rivalry Competitive rivals are organizations with similar products and services aimed at the same customer group. Rivalry is high in the field of Google. The organization faces competition from content providers like Yahoo, MANS, AOL and Microsoft. It also faces competition in the field of online advertising network. 5. 3. 2. Challenges According to the porter’s analysis, the industry in which Google operates is unattractive, with high ‘Buyer power’ and Threat of new entrants’.

In spite of that, Google maintained the top position in the industry through their strategies. Their strategy of focusing on the search engine industry and the use of innovative technologies helped them to dominate the sector. Google’s organizational design with emphasis on innovation, helped them in insuring a comfortable position in the industry and a differentiation from their competitors, through the creation of a strong brand image. 5. 4 Mint berg 5 up’s of strategy Mint berg recommended that no one can posses the word ‘Strategy, it can be used in many ways. T can be : Plan Strategy Miniature considers people use strategy as some kind of deliberately planned way of action or it can be say as giving some guidelines to face some circumstances. It can be some prearranged strategies and watching the progress of it from the beginning to the preprogrammed fixed period. Some companies follow this strategies. Especially like planners have a tendency to introduce some internal plans in detail about what the company aims to achieve, say like for 5 years plan, and focusing to gain that objectives. It may include the acquisitions, financing plans, new product launching plans or changes in the HER.. Etc. Ploy Strategy Ploy is somewhat same like plan strategy but its a short period strategy. Compared to plan strategy ploy is having limited amount of objectives and this strategy may change at any time depends on the situations. The strategy which implement for a particular situation cannot be fit for another case . Miniature indicate that some companies use this strategy to threaten their employees if their standard of performance is not reaching the expected level. Pattern Strategy A Pattern Strategy is in which growth is happening by considering a constant form of behavior.

Pattern Strategy is not like plans or ploy, it’s just happening because of the consistent behavior. Usually small business firms go behind the pattern strategy. If this strategy has come to a victory then it is considered as consistent behavior has revealed as success. This is against the planning behavior. Position Strategy Positioning strategy is suitable to an organization as it depends on how it relates to the company Or what Company aims for like how the company is positioned in the market or where it stands with the competitors.

In short we can say this strategy is used if company aims to achieve a part of market or wants to defend their position with the competitors. This may be like pointing out the weak point of the competitors and highlighting the positive side of their products. Perspective Strategy This strategy aims to a certain group of people change their belief or culture, generally for the members of the organization itself. Some companies thinking that if they change the attitude or belief of their employed in such a way to achieve the SUcceSS. Achievement will be following when all members believe and perform in the same way. 5. 4. Discussions This planned strategy Google has applied ,Goose adopted this planned strategy in their business, they keep financial plans for 3 years in advance and it includes the cash flow of the company, and they keep one year strategic plan, what all things has to do in the coming one year, and where all markets they have to enter. And comparatively Ploy strategy is used in small firms than higher firms. And Google has applied the pattern strategy in their operating system and Google phones which operate on android software, where its facilities are not constraints people can customize it according to their requirements.

Positioning strategy implied importance in Google’s products, like Google phone has come with a strategy of beating apple phones. Also other products like Google BUZZ to expand the business by beating the TWITTER, where we can share our views and visions to the public. And Google has added this facility with their email as an added advantage. Google has used the Perspective strategy in their organization itself to improve the creativity of the employees and ultimately it leads to the achievement of the organization.

Google gives 20 % of their employees time to do their creativity work, and staffs has to do the company assigned work for rest 80 % time only, this 20% it enriched the intellectual power of the employees and will help to resolve the problems they face through innovations. Products like geological, Resort, Picas… Etc are examples. 5. 5 Porter’s Diamond Strategy 5. 5. 1 Discussion Porters diamond states some nations are more competitive than others, and why some industries within nations are more competitive than ethers.

Porter suggests that the national home base of an organization plays an important role in creating advantage on a global scale. There are certain specific factors which provide this advantage. These factors include home demand conditions, factor endowments, supporting industries and infrastructure, and firm strategy and structure (Johnson et. Al, 2006). Google was founded in the United States in 1998 and now, the company has offices across the world. According to Porters diamond, the supporting industries and infrastructure may have given an advantage to the company.