Question 1

Unlike other search engines, Google distinguishes between useful and trivial
websites. Like other search engines, it examines the words on web pages and
then indexes them, but unlike them, it also looks at how and where these words
were being used and at the number of other websites linked to a page. It shows a
list of web pages with most useful link appearing at the top. Google search
engine is simple and user-friendly as compared to other search engines. The
advertisements are text-based and hence the page remains uncluttered, i.e. free
from any kind of obstructions to the users, and the page loading speed remains
at its maximum. Google has competitive advantage in terms of its speed of
search. It takes only 0.2 seconds, which is quite low as compared to other search
engines. Google also provides value for money, both to the users as well as to
the advertisers. To the users, it provides the results timely so that they need not
wait. It did not mix the advertisements with the search results keeping the
website simple and clean for the users. Moreover, it advertises only text-based
advertisements or pop-up advertisements, but not banner ads although this
practice has been observed with other search engine companies.
Google's customers are advertisers ranging from a SME to large scale enterprises
to the end users like the common man. The sites are ranked according to the key
words and the key words have got some price tags. The advertisers put their
advertisements of products and services in Google and they pay to the company
when someone clicks the advertisements. Google's Ad word is the latest addition
to this foray. Google also pay the other companies to display Google's
advertisements. Google is continuously reinventing itself to be miles ahead of
other companies. So with the addition of millions of internet users every year
worldwide internet has became the latest buzzword. Whichever organization
wants to be ahead of the competition they have to be present in the cyber space
and who else than the search engine giant Google to show the way. The
relevance of search results cost of executing the search and the speed of the
search and continuous innovations makes Google the ultimate destination for
advertisers as well as the end users. Let us take an example of Google Ad words.
The benefits advertisers can get are

The customer can easily set up the Google Ad word within 30 minutes.
Advertisements will be displayed at the right hand side of the website.

Customer does not need a website. They can be an affiliate marketer to

promote their products.
Customer can market any type of product using Ad words.
Customer can sell their own products like eBooks, music etc.
Customer can test market their product before the original launch.
They can specify the budget they want to spend on each day.
Advertisements can be country specific, city or town specific.
Customer can split test their Advertisements to see which is working and
then can put their best Advertisements.

Google cannot afford to lose the customer's attention and trust. Some years ago
average search time was 3 seconds and they have bought it down to .2 seconds
and now they are working towards reducing the time further. Also the relevancy
of search result has to be maintained to retain the customers if it means losing in
revenue for the company. So we can have an idea about the value Google wants
to create for the advertisers and the customers. These are the intangible values
Google is creating towards their customers.

Question 2
According to the Google CEO they never made any strategy but what they have
made is what the customer wants. In my opinion they are pursuing cost
leadership strategy as well as differentiation strategy. Google has technological
advantage over its competitors as they use high performance system which can
take workload more than the general systems. Because of this capability they
have a cost advantage over their competitors. Google scores over other
competitors on the technology advancement.It scores over its competitors over
relevance of search results, cost of executing the search and the speed of the
search. The value it has already created in the mind of consumer if the product
or service is differentiated customer will not be price sensitive.
Corporate level strategy decides which business and which market the
organization should look to enter. An organization needs corporate-level strategy
to a) penetrate the existing market, b) Wants to enter new market with existing
product, c) develops new product for existing market, d)develops new product for
the new market. The business options are wether to work in the same business
or diversify, wether to cater the home or national market or to go international.
Google saw China as a fast growing competitive market. They entered in to an
agreement in 2006 and Google is known as google.cn. This was a market
development strategy followed by Google. From the year 1999 Google has
presence in China but due to censorship issues Google was losing its market to
Chinese origin search engine Baidu. From the year 2002 to 2007 Baidu's market
share went up from 3% to 58%.This promoted the search engine giant to enter in
to an agreement with China and to operate its office from China abiding the laws
of censorships. In 2006 there were over 105 millions of online users only in china
and that was only 8% of the Chinese populations. So Google sensed the
opportunity in that market and entered in to an agreement with them.
For any organization efficiency, quality, innovation and customer responsiveness
are the four building blocks of competitive advantages for their products and
services.

a) Efficiency- In order to achieve efficiency a company needs to have economics

of scale, learning, experience, good marketing, Research and development,
optimum use of Human resources and infrastructure.

From a mere 10000 search in a day to 75% of search made using it has came a
long way. The revolution in hardware technology coupled with innovation it has
considerably reduced its unit cost. Google's optimal use of Human resources can
be seen as only 650 employees are there in Google worldwide. They claim that
their employees are 50 to 100 percent more productive than their competitors.

b) Quality-Quality of goods or services can differentiate one organization from

the other. Maintaining quality will lower the defects and operating cost increasing
the profitability of any organization. Google has maintained the relevancy of
search result to retain the customers if it means losing revenue for the company.

c) Innovation-Google believes in continuously reinventing itself by innovative

products. At the start Google found a way to generate revenue from the
corporate by keywords bidding and advertisements. Some years ago average
search time was 3 seconds and they have bought it down to .2 seconds and now
they are working towards reducing the time further. So Google is continuously
trying to innovate and upgrade its technology as well as strategy to be ahead of
the competition.

d) Customer Responsiveness-Customer responsiveness can be defined as giving

products or services to customer at their price what, when, where they want.
Google has worked in the same way. It has given its advertisers and end users
the ease of search, speed, reliability and deliverability at a cheaper price. As
their business is customer centric they do not hesitate to test market a product
or services before the actual launch and seeks feedback from the user to
improve it. The R&D division of Google invites its users to their lab and includes
them in the development process of the new products as well as enhancement of
the existing one so by seeking their feedback.

Google's competitive advantage

Competitive advantage can be achieved either through lower costs strategy or
differentiation strategy targeting a particular segment of the market.

a) Cost Leadership Strategy-Any organization achieves competitive advantages

by able to produce goods or services at a low cost. It lowers the operating costs
in order to achieve this strategy. A Cost advantage is the main objective of this
strategy. Costs are tried to be marginalised in every step of the production of
goods or services. But low cost of production of goods or services does not mean
that pricing would be low as there can be a high promotional cost for the goods
or services. Products can be priced competitively so as to achieve bigger margin
than the competitors.

b) Differentiation Strategy-Organization adopting this strategy attains

competitive advantage through satisfying customer needs. This results in
competitive pricing of the differentiated product or services and higher margins
for the organization

The organization adapting to the differentiated strategy will incur more cost
than before for creating the competitive advantage of the product or service.
This cost can be compensated by increase in sales of that particular product or
services.

c) Focus Differentiation/ Cost Leadership Strategy- Focus strategy is focusing

differential or cost leadership strategy on a particular segment of the market.

The source of Google's competitive advantage comes from the infrastructure of

database Google has created over the years, relevance of search results, cost of
executing the search speed of the search, product offering from AD words to
social networking site to mobile application platform. Distinctive competency of
an organization can be defined as how the company differentiate its product and
services from the competitors, how to segment the market, price their products
and what is the range of the products available with the company. Google scores
over its competitors over relevance of search results, cost of executing the
search and the speed of the search. This is the differentiation advantage Google
is having over their competitors. Google's competitive advantage comes from
the infrastructure they have built over the years. Continuous innovations, ease of
use, relevancy in results are some Google's distinctive competencies. Google's
ability to connect with the internet users, advertisers, website owners
differentiates it from the competitors. Google has technological advantage over
its competitors as they use high performance system which can take workload
more than the general systems. Because of this capability they have a cost
advantage over their competitors.
Google's ability to sustain its strong position among Internet search companies
was a function of its ability maintains strong relationships with Internet users,

advertisers, and Web sites. Google has a distinctive technology advantage over
Microsoft, eBay, Amazon, Yahoo. Google utilizes custom high-performance
systems which are cost efficient because they can scale to extreme workloads.
This hardware allows for a huge cost advantage over its competitors.

In 2005, Internet users searching for information went to Google more often than
to any other site with search capabilities. There was nothing that would prevent
Internet users from abandoning Google to use a better search technology.
However, the development of a better search engine by a rival could lead to
rapid erosion of advertising revenues for Google. Google management believed
its primary competitors were Yahoo! and Microsoft.

In August 2004 Google went public, raising over $1.5 billion. With no debt and
flush with cash, the company looked set to build on its lead in the search engine
business. However, competitors were not sitting on the sidelines. In 2003 Yahoo!
purchased a rival search engine company. Overture Services and replaced
Google as the search engine on its site with a proprietary search engoine based
on Overture's technology. Microsoft too seems to have its sights set on Google.
Microsoft is reportedly working on its own search engine technology, which it
plans to integrate with its software.

Corporate strategy

Google's business model is mainly based on advertising. Any market that

attracts advertising is a target for google. Google is in a situation in which it can
resist the economic crisis and find new revenue sources, both advertising and
non advertising. Google's ability is to attract users in the sole basis of its services
quality and without turning to advertising. That's why google largely buys traffic
from different providers. Google has financial power to buy traffic from partners
so that they can access massive audiences. Google has alliances with firefox
(browser), Dell (computers), Apple (IPhone), Sun (java packages), AOL to have
the Google search engine appear by default. So by doing alliances with different
organizations, Google expands its advertising network reach.

Apart from increasing market share of current performance advertising, Google is

looking advertising opportunities in Internet mobile. At present time, mobile
advertising market is growing very fast. So Google's current strategy is to

capture mobile advertising market. But current mobile industry is not suited for
the google's development model which is based on openness, interoperability
and network effects. If we consider current mobile world, maximum cell phones
manufacturers are using symbian or windows operating system and terminals
assigned to a unique operator. All operators provide different services through
there own portals and these portals and services favored over other portals.
Because of closed operating systems, Access restricted to services/ contents and
to their improvements.

As part of their strategy to go in mobile internet advertising, Google is trying to

change the mobile world according to their business model and it is using
following vehicles to implement its strategy.

1- Open Source Operating System: Android

Google has developed ‘Android' Open source operating system for mobile
device. It is a free, mobile software platform. It allows developers to create new
mobile device applications and manufacturers to install it in their handsets.
Android is being developed with the Open Handset Alliance, a group of more than
45 technology and mobile companies, with the goal of providing consumers a
less expensive, richer and more powerful mobile experience. As per Google
corporate report, T-Mobilehas already announcedtheG1, the first phone built on
the Android operating system.

2- Partnerships with different telecom companies

Google is trying to do partnerships with telecom companies' to offer its
applications as default options. Advertising revenue will be share between
Google and operators. Google had already entered in telecom domain. It
announced a partnership with China Mobile, the world's largest mobile
telecommunications carrier to provide mobile and Internet search services in
China. These deals are continuation of deal making among network operators,
internet providers and makers of telecom equipments around the world. They
have introduced AdSense for Mobile; giving sites optimized for mobile browsers
the ability to host the same ads as standard websites. New beta version
ofAdsence allows developers to display text and image ads in iPhone and Android
applications. Google's interface for iPhone gives users the option for Search,
Gmail, Calendar, Docs, Reader, Web, Notebook and News. This interface is
available in 16 languages. In this, Google shows search suggestions, auto-

complete for Gmail contacts, slideshows in Picasa Web and includes a

presentation viewer in Google Docs.

Google strategy is to change the mobile industry to create an environment that

will be fit according to the distribution of its products and monetization model.
Google's strong brand and image as a technological leader are its key
differentiators for this strategy, because it gives a great confidence to their
investors and customer, who give their advertisements on Google's websites.