Google Case – Competitive Advantage
Competitive advantage:
Google has a competitive advantage that has allowed them to nearly monopolize the search engine industry. Some of these competitive advantages are: their infrastructure, their cash reserve, and the name “Google” itself.
Their infrastructure is a major competitive advantage that has allowed them to succeed. Google builds their own servers, storage systems, and Internet switches. If they purchased the hardware they need from different companies it would be very difficult to keep all of these components working together. It would also be extremely expensive to maintain this type of infrastructure. Instead Google builds and customizes all the components they need. This costs them billions of dollars, but it is worth the cost because this ensures their search results will be delivered at lightening speed. This lightening speed of the searches is what keeps users coming back to Google for their searches. Google’s type of infrastructure is is also a barrier for rivals to enter the market because the rivals wont be able to deliver this type of speed if they haven’t spent the billions or aren’t able to spend that amount of money.
Google’s cash reserve is also an important competitive advantage. Google’s investments have yielded over $26 billion in cash. They have a team of investment analysts that spend all day ensuring that their cash returns a good rate. Even 2-3% return would return huge amounts of money because of how much they invest. Their cash reserve also enables Google to buy out small firms that could be a potential threat; and an offer in the millions or even low billions would doubtfully be turned down from a small start up firm.
The name itself, “Google” is also an advantage to Google. Google is a catchy name. We hear people say “I’ll Google it” all the time. This is a common phrase people use when they want to look something up. In 2006 the word “Google” was even added to Merriam Webster Dictionary and the Oxford English Dictionary, meaning, “to use the Google search engine to obtain information on the Internet.” People’s wants and needs are satisfied by using Google as a search engine, so they have no reason to switch and try out other search engines.
Problems Google has faced/is facing:
Like all companies, Google has experienced their share of problems. A few problems that the company has faced or is currently facing are: Bing, censorship laws in China, Facebook, and privacy issues.
Google chief executive