Question

Has Google implemented a strategy that serves all stakeholders?

How can Google respect privacy and still maintain its profitability?

How will increasing global regulation of privacy affect Google’s operations?

These questions are derived from this article: https://danielsethics.mgt.unm.edu/pdf/google-the-quest-to-balance-privacy-with-profits1.pdf

Answer 1

Stakeholder Strategies of Google

Porter (1985) suggests three generic strategies that businesses can adopt to achieve and maintain competitive advantage i.e. cost leadership, differentiation, and focus.

Evaluating Google’s unique products and services and their different segments of customers, it’s clear that the company is following differentiation strategy in terms of Porter’s framework. Google’s huge technology infrastructure, a wide range of innovative products, and a greater market share gives the firm a competitive advantage in the industry.The company has gained a sustained competitive advantage by outperforming other competitors such as Yahoo, Microsoft, and Aol for a long time and maintaining a high share of the online advertising industry.

Google’s former CEO Eric Schmidt in an interview said that the company doesn’t have a five-year plan and rather focuses on what’s new and exciting (Carlson, 2009).Google indeed believes in the free flow of ideas and its strong and unique culture has fueled innovation in several aspects of Google’s works. Speaking onstage at TED 2014, Google’s CEO Larry Page revealed several future plans of Google

Increasing Internet Accessibility

Google’s main focus is to gain more Internet users as the company’s revenue depends on more and more people using its search engine and other services.

Be that with new and improved products or visionary projects like Project Loon, Google is mostly concerned with reaching a wider population on the planet by expanding the Internet accessibility.

Focusing on the fact that two-thirds of the world’s population are yet to have access to the Internet, Google’s Project Loon balloons help connecting the remote and rural areas with access to online information (Google.com, 2014).

Google’s CEO, Larry Page at TED 2014 reveals that he has been thinking about the idea of providing global Internet access for last five years and he is really excited about the Project Loon.

A recent acquisition of Titan Aerospace, high-altitude drone maker by Google is also an indication of how serious Google is about the project.

According to BBC, Google said that the Titan Aerospace would facilitate its Project Loon in making the Internet accessible to a wider population (BBC News, 2014).

Google’s another project, Google fiber, which provides hundred times faster Internet has changed the way people use the internet for entertainment purposes among other usages of the powerful Wi-Fi.

Rolled out in few US cities already, the company is providing basic Internet free with additional costs for higher speed and its TV services (Fiber.google.com, 2014).

Google faces a threat from ISPs (Internet service providers) that may disrupt accessibility of Google services to its users. The company itself being the internet service provider in the long run, will secure its users and advertisers.

Innovative projects such as Project Loon and Google Fiber that Google is working on are unique products and, therefore, the company follows a differentiation strategy.

Improving Search Infrastructure

Search products are the core offerings of Google and are directly related to advertising, main revenue stream of the company.

The company built its brand on basis of a powerful search engine offering advertisements opportunities on the search pages matching to the keywords of the search engine users.

Google revealed that it spends more than 70% of its resources in building and improving its search and advertising products and this can be easily justified by looking onto continuous changes in their portfolio of related products.

Innovating in search products and services so that they can sustain the search advertising revenue has been of significance to the company

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Expanding the domain of search infrastructure the company is also focusing on its products such as Google Chrome that help users browse the web with faster speed and with greater security and privacy.

With more than 750 million users (Google Annual Report, 2013), Google is trying to create another ecosystem with its chrome apps and users.

Charles Golvin, an analyst with a research company, Forrester argues that Google is pushed to search for expensive advertising and its focus on several platforms such as Chrome is all advertisement driven so that it can offer higher price advertising to its main customers – advertisers (Keizer, 2014).

Google is constantly expanding its search services and wants to innovate the search process with improved knowledge graph and backed with artificial intelligence technologies.

All these activities are distinct from its competitor Facebook, Amazon and others that have built search facilities along other domains of the social graph, personal relationships, and the product.

Improving Mobile Products and Advertising Solutions

Announcing the first quarter earnings of 2014, Google’s CEO and founder Larry Page said that a lot of improvements was done in mobile products in past quarter (Google, 2014).

This clearly reveals the focus of Google to be a strong player in the mobile market and make mobile a core part of their strategy.

The first quarter results although increased in comparison with the first quarter of 2013, weren’t in line with the predictions. In addition, decreasing percentage in cost-per-click that Google charges to its advertisers became a concern considering Google’s inability to charge advertisers higher prices for mobile ads (BBC, 2014).

Google and the entire online advertising industry is struggling to monetize the mobile devices including new smart phone and tablets.

Mobile’s tremendous growth is not of a surprise to Google but the company has yet to master the mobile advertising matching to its desktop counterpart.

Google’s chief business officer believes that the mobile advertising rates will eventually be better than the desktop prices citing the fact that context and location are important aspects of mobile advertising (Edwards, 2014).

It’s indeed a difficult time for Google to convince its mobile advertisers to pay a higher price for Ads because of their poor conversion and this will need some serious work from the company as its business is shifting more towards mobile.

Apart from search and advertising solutions on mobile, Google’s focus is also on growing and keeping ahead of its competitors in smartphone platforms.

Mobile platform Android, led by Google dominates the market occupying 52.1% of the OS market, slightly ahead of Apple with 41.3% as of February 2014 (comScore Reports, 2014).

The platform, as reported in corporate highlights of Google’s annual report (2013) crossed one billion users as of September 2013.

Google has built a complete ecosystem of a smartphone market with Android and continues to invest huge time and effort on improving the open source platform to provide better mobile experience to its users.

Android is different from other mobile platforms being open source and free for hardware manufacturers, differentiating its offering from other paid and manufacturer-restricted platforms.

Google also follows a differentiation strategy in terms of providing unique search advertising facilities to advertisers on its top mobile properties.

Focus on Social Network and Social Advertising

Social platforms like Facebook and twitter that quickly soared on the advertising landscape have urged Google to pursue its social platform strategy seriously.

The company might have failed several times with its social strategy in the past, but it looks like it is finally gaining the traction with its social platform called Google+ launched in November 2011.

The company forced it’s other platform users such as to be part of the platform and this has added users aggressively on Google+ to surpass twitter user numbers.

Forrester, a market research company as reported by Edwards (2014), has revealed fresh insights in terms of user engagement and conversions comparing Social platforms Facebook, Twitter, and Google+.

Stating the fact that Google+ has got the user engagement boost from the usage of its search engine, Edwards (2014) argues that the social platform is now a potential threat for other platforms like Twitter and Facebook for social advertisements.

Apart from influencing brands and businesses to join the platform, Google+ recently announced a new type of social Ads called +Post ads on their products updates page that advertisers can use to turn their updates into engagement ads (Google, 2014).

The new social advertisement feature is similar to Facebook and Twitter advertisements in sense that the businesses can now amplify the reach of their posts across the social web.

Resources and Capabilities of Google

Grant (2010) defines resources as productive assets of an organization and capabilities as what an organization can do using the resources adding the fact that all resources must act together to form capabilities of an organization.

The principal type of resources in terms of tangible, intangible, and human resources for Google in reference to the above strategies are discussed with further evidences below.

Resources of Google

Exceptional Products and Financial Resources – Tangible Resources

Tangible resources have physical attributes and are visible for an organization (Rothaermel, 2013).

Google has a huge technology infrastructure that supports a portfolio of exceptional products that can be used by agencies and other business for their online advertising activity.

Google’s wide range of advertising products include AdWords, Adsense, DoubleClick Ad Exchange and other platforms that advertisers can benefit from are Google’s network member websites and Google-owned websites including Google Finance and Youtube (Google Annual Report, 2013).

Google’s multibillion-dollar infrastructure includes its data centers in several locations in the US and few other countries that power its products (Levy, 2014).

Google also has a strong financial performance over years and this has generated huge financial resources for the company.

In the recent annual statement as of March 31, 2014, Google reported 59.38 billion dollars as its cash and cash equivalents (Google Q1 Results, 2014).

Google’s Culture and Brand – Intangible Resources

Google has an open and entrepreneurial culture, mostly resembling to the culture of start-ups where everyone’s ideas are valued and everyone in the team is made comfortable sharing their opinion (Google.co.uk, 2014).

The company’s structure is non-hierarchical and flat that allows collaboration between teams and makes the leadership position easy to approach.

Google’s culture also serves as an ideal medium to foster the company’s innovation and, in fact, several innovative products of the company can be credited to its culture (Economist, 2009).

Google maintains a strong brand reputation among its users, advertisers and partners. The company has a reputation of one of the top brands in the world and best places to work. Google was Fortune’s top company to work for in the latest ranking report of 2014 (CNN Money, 2014).

Google’s valuable intellectual properties such as trademark and patents are also worth considering under intangible resources of the company.

Google’s Employees and Skills – Human Resources

Google spends significant efforts in hiring, retaining and motivating its skills force.

The company considers its key personnel and services essential for long-term vision and crucial to implement its business strategies (Google Annual Report, 2013).

Google competes with several other tech companies such as Microsoft, Facebook and Yahoo for its employees and makes sure it can retain those employees for a long time at Google.

The company hires best engineers with its reputation of one of the best places to work, and builds a strong and motivated work force that are culturally fit to the company and are immensely productive.

Capabilities of Google

Google’s resources on its own are not sufficient to get the tasks done. It’s capabilities make use of those resources to gain competencies on what Google does very well.

The management practices from Google’s executive team and top performance from Google’s engineer matched with world-class resources builds on the capabilities of what Google can actually achieve.

How will increasing global regulation of privacy affect Google’s operations

1. the issue of jurisdiction has time and again impacted Google and other big giants which rely on data.

2. It will impact the servers that the google can reach out to for their searches.

3. It will impact thesearched which they used to share with users previously.

4.Even online privacy is at threat and facebook and twitter might have to face the consequences much the same way Google has to face.