Essay About 2016Zilong Wang        Google And Search Engine Industry

Google Case Analyze
ADMN 703Google Case Assignment March 26, 2016Zilong Wang        Google is the leader in the search engine industry at present, it also includes other segments like applications, system, smartphones, tablet computers and TV. Comparing with other strong rivals (Yahoo sites and Microsoft sites), Google took 66.7% market share in the Internet industry; high market share rate enables them accessing more users’ browsing history which can improve the quality of their search result and targeted advertisements more effective than their competitors. Under that pattern, Google creates a sort of self-perpetuation draw of customers as the search results constantly improve.          The rivalry force is the strongest force among the five competitive forces. Because the customers’ data can be sharing by search engine, basically the services of these companies are same, so that users could be easily token from other rivals; furthermore, other search engines trying to update attractive applications to get more users and improve their competition advantages. The weakest power is bargaining power of buyers, Google has 97 percent of revenue made by advertising, which means Google has less pressure from consumers; Google’s targeting ads are so effective that advertisers would spend more money on Google than other company. The bargaining power of suppliers is relied on Google’s ads system and it’s a steady source of income. The threat of substitute products and services has less impact in the industry, since internet user keeps increasing and there are no efficient substitute can replace Google. As long as search engine industry needs mature technology and experience to run this business, new entrants have barriers to compete with other current big companies. The industry has highly attractiveness, but the ability to access users’ information and relatively new and high technology would be the essential components to increase the attractiveness; in Google financial report for each year R&D expense always takes 30 to 40 percent in total expense.         Starting from 2004 Google has no longer only focused on simple search engine, it started multiple features like Gmail, Google Maps, Google Chrome and etc. Mobile searching is most popular market in recent years, google performed 95 percent share in offering mobile devices internet search. After acquisition of Motorola, Google acquired the capability to produce its own smartphone with own system (Android) and other Google applications. Another new device raising is Google TV, this is a revolution of home TV set, like Apple TV. The new TV system is powered by Android and TV would work with all Android based devices, so the Google services will work well among multiple ports that customers would have unique product experience than others.        To be the leader of this industry, satisfying customer’s demand by innovation new products and services is crucial. In addition, all the industry is based on the search engine, thus keeping on improving search engine is their R&D department priority job. And because of the security and privacy concern, customers are more willing to rely on the company who respects users and gives protections to users.         Google’s business model has three keys factors, which are all built up on the advertising-base revenue, Adwords, AdSence and Search Appliance, advertisers can bid on search term by choosing the service of cost-per-impression or cost-per-click. Google can offer advertisers opportunities to advertise by matching keywords the users’ searches. Search Appliance is created for business to be able to market their business and give accurate information to searchers. Flexible pricing system and efficient ads are strengths of business model.