Description
It talks about google in terms of strategy and marketing. It covers Porter 5 forces, SWOT, market research, planning of Google.
Executive Summary
The Company in a Nutshell
• Google was founded in the year 1998 by larry Page and Sergey Brin from Stanford University. • It is head quartered in Mountain View, California and is called the Googleplex • Google has a diverse array of services like Youtube, Google Maps, Orkut, Google Earth to name a few, making Google a force to reckon with on the web
Vision, Mission & Focus
• Vision
Google’s vision is to make search engines so powerful that it understands everything in the world. And is thus able to provide its users with all the information that they desire. • Mission – To organize the world's information and make it universally accessible and useful to all. • The Focus: – Google believes in keeping things simple. – Google continues to focus on providing the best user experience possible
–
Google Products
Google Products Continued…
• More than 90% of Google's revenue comes from its Ad based programs i.e. Adsense & Adwords
Situational Analysis
Market Needs
• • • • Sheer simplicity Consistency Functionality in terms of reliable & relevant results Google philosophy:
– – – – – – Focus on the user and all else will follow. It's best to do one thing, really really well. Fast is better than slow. There's always more information out there. The need for information crosses all borders. Great just isn't good enough
Google’s Share of Search in Selected Markets
Internal Environment
SWOT ANALYSIS
STRENGTHS: • Googles reputation and familiarity • Googles speed and user friendliness • Innovative search technology •Tremendous capability in supplier-buyer integration
WEAKNESSES: • Poor product marketing • Over dependence on adbased programs which contributes more than 90% to the total revenue
OPPORTUNITIES
• BRIC Countries • Computer literacy is on the rise • Mobile technologies offer another opportunity. • Cheaper global telecommunication costs open new markets
THREATS
• Competition from Microsoft and Yahoo, their ability to attract and retain users through portals. • Reducing margin due to several internet advertisers • Google’s recent china controversy
External Environment
• Global Presence
External Analysis
• Demographics – Google is well positioned in demographics because it has a relatively young user base. – The company will benefit when some traditional and paternalistic societies begin using the internet more frequently
• Technology – Google believes in continuous innovation through improvement in technology • Economic – Even in the current recession scenario Google continues to do well due to its internet based advertisement programs
External Analysis
• Political & Legal
– China issue
Porter’s 5 Forces Analysis
• Potential new entrants – The barriers to entry in the internet search market are high – A new entrant would need to provide better search results at very fast speeds to compete in this highly competitive market. – Google was founded in 1996, Yahoo, Excite, and Altavista dominated the search market and Google has since eclipsed them all – The market now, however, is more mature with a necessary path dependency to gather data on both the content of webpages and the search history of users
Porter’s 5 Force Analysis
• Suppliers – Google’s ad system is a reliable source of income because both the ad-making partner and ad- receiving individual are both customers of Google’. – So as long as Google maintains its market dominance with the search product, supplier bargaining power will remain low. – Google’s cost of revenue as a percentage of sales in 2008 was 40%. This number is the same for Yahoo suggesting that both companies are equally efficient at maintaining supplier- seller collaboration.
Porter’s 5 Force Analysis
• Competitors
– In 2008, Google had revenues of $16 billion which grew at an average of 115% annually in the preceding five years. – Google’s main competitors, Yahoo, and Microsoft posted revenues of $7.0 billion and $51.1 billion respectively.
Porter’s 5 Force Analysis
Porter’s 5 Force Analysis
Google’s market share in comparison with it’s competitors
Market Share (figures as on December 2008)
9% 11%
Google 23% 57% Yahoo MSN Others
Porter’s 5 Force Analysis
• Customers: – No single account contributes more than 3% to net revenue, and less than 5% of the revenue is generated by any given network partner site. – In Google’s system many advertisers bid on keywords – This distributed approach allows Google to attract both large companies and small “mom- and-pop shops” keeping buyer power low. • Potential Substitutes – there really is no suitable substitute for search.
Competitive Landscape
Search
Competitive Landscape
Advertising
Competitive Landscape
Video Blogging
Competitive Landscape Social Networking
Direct Competitors
• • • •
Internet companies, web search providers, Internet access providers, Internet advertising companies
Marketing Mix – 4Ps
Seller’s view Customer’s view
4Ps - Product
• Advertising • Relationship with Libraries of many universities to digitize books • Google is the world's most popular search engine. • Google Earth : Enables users to view the world from space • iGoogle : a personalized Web page
4Ps - Product
• Google Scholar - supports a range of material such as peer reviewed journals, thesis and other academic material • The ever evolving list of products includes Google finance, Google news, Google blog search, Google video, YouTube, Google sites, Blogger, Orkut, Google Reader, Google Groups, Google Calendar and Google Docs
• Chrome – an Open Source browser
4Ps - Product
4Ps - Price
• Googles most of the products are offered free to customers • So How does Google make money? • Click Fraud
4Ps - Place
• Google’s place is the internet • Focusing on PC Software market e.g. Chrome • Entry into Mobile OS Market e.g. Android
4Ps - Promotion
• Google uses AdWords itself to Promote their Products • They include flyers inside business magazines • They use money off promotions to incentivize advertisers to use AdWords e.g. free 500 Rs. worth of advertising. • Google Chrome has its own TV advert in Japan • Google has a Public Relations function that it uses to proactively manage media. • Various Competitions
Value Proposition
Comprehens iveness and Relevence
Global Access
Value Proposition
Ease of Use
Improving the Web
Multiple Platforms
Market Research
Orkut vs Facebook
Overdepend endence on Advertising
Lack of Integration
Critical Issues
No Diversified Earnings
Traditional Methods Not used
Declining Market Share
Integrate Services Lift the Brand Extend the Market
Marketing Objectives
Uplift the Whole Brand
New Logos
Accolades
Googlenet
Traditional sources of Media Video Ads on Home Page
Simple + Exotic
Strategy Global Ad campaigns New Brand logos
Effect Optimum Market Share: Will give the same worldwide appeal Brand inception: revamping the web page is like redefining brand image.
Accolades and Landmarks
Diminishing market share - the lack of accolades for other services gives the competitors the edge as the credibility cannot be justified
Optimum market share: The integration of services will provide a common a convenient platform for the customers and a greater access through networking of services. Optimum market share: This will reach out to wider masses creating more awareness
Googlenet
Traditional Sources of Media
Trend Analysis
?Rapid Growth since inception ?Decline in revenue growth ? Increasing competition
? Increasing maturity in certain developed Countries
?Weak Economic Conditions ?Seasonal Fluctuations
Financials
Revenues Costs and expenses: Cost of revenues Research and development Sales and marketing General and administrative Total costs and expenses Income from operations Impairment of equity investments Interest income and other, net
2006 100%
2007 100%
2008 100%
2009 100%
Q4 2009 100%
39.8 11.6 8.0 7.1 66.5 33.5 — 4.3
40.1 12.8 8.8 7.7 69.4 30.6 — 3.6
39.6 12.8 8.9 8.3 69.6 30.4 (5.0) 1.5
39.2 12.7 9.2 9.2 70.3 29.7 — 0.4
38.4 12.9 8.9 7.2 67.4 32.6 (19.2) 1.3
Income before income taxes Provision for income taxes Net income
37.8
34.2
26.9 7.5 19.40%
30.1 6.8 23.30%
14.7 8.0 6.70%
8.8 8.9 29.0% 25.30%
2006 Advertising Revenues
2007
2008
2009
Q4-2009
Google web sites Google Network web sites
$ 6,332.8 4,159.80
$10,624.7 5,787.90
$14,413.8 6,714.70
$15,422.7 7,013.30
$4,232.6 1,890.90
Total advertising revenues
10,492.60
16,412.60
21,128.50
22,436
6,131.50
Licensing and other revenues
112.3
181.4
667.1
189.4
196.3
Revenues
$10,604.9
$16,594.0
$21,795.6
$22,625.4
$6,327.6
Advertising Revenues
2006
2007
2008
2009
Q42009 67%
Google web sites
60%
64%
66%
67%
Google Network web sites
39
35
31
30
30
Total advertising revenues
99
99
97
97
97
Google web sites as % of advertising revenue Google Network web sites as % of advertising Revenues
60 40
65 35
68 32
69 31
69 31
Licensing and other revenues
1%
1%
3%
3%
3%
Revenue Contribution 2009 Google web sites ................................. Google Network web sites ......................... Licensing and other revenues 3% 30%
67%
Advertising Growth
•Advertising revenues resulted from an increase in the number of paid click.
•Also from Hedging Gains i.e Foreign exchange risk management program •Other Reasons ? Increase in Aggregate AD Traffic ? Expansion of Google products ? Increase in no. of Google Network members
Contingency Planning
Contingency issues
•Legal Issues
?Google also has copyright claims filed alleging that features of certain products and services. ?Google is litigating, or have recently litigated similar issues in other cases, in the U.S., Australia, Austria, Brazil, Chile, China, France, Germany, Israel, Italy, Taiwan, and the United Kingdom.
•Implications
? Prevention from offering Services ? Loss in Revenues and other business harm.
•Foreign Exchange Risk •Privacy concerns •Increasing usage of non-PC devices for Internet •Emerging Technology to Block Ads
Keys to Success
Keys to Success
1. Technology
2. Business Model Innovation
3. Brand
4. Focus On The User Experience
doc_336123170.pptx
It talks about google in terms of strategy and marketing. It covers Porter 5 forces, SWOT, market research, planning of Google.
Executive Summary
The Company in a Nutshell
• Google was founded in the year 1998 by larry Page and Sergey Brin from Stanford University. • It is head quartered in Mountain View, California and is called the Googleplex • Google has a diverse array of services like Youtube, Google Maps, Orkut, Google Earth to name a few, making Google a force to reckon with on the web
Vision, Mission & Focus
• Vision
Google’s vision is to make search engines so powerful that it understands everything in the world. And is thus able to provide its users with all the information that they desire. • Mission – To organize the world's information and make it universally accessible and useful to all. • The Focus: – Google believes in keeping things simple. – Google continues to focus on providing the best user experience possible
–
Google Products
Google Products Continued…
• More than 90% of Google's revenue comes from its Ad based programs i.e. Adsense & Adwords
Situational Analysis
Market Needs
• • • • Sheer simplicity Consistency Functionality in terms of reliable & relevant results Google philosophy:
– – – – – – Focus on the user and all else will follow. It's best to do one thing, really really well. Fast is better than slow. There's always more information out there. The need for information crosses all borders. Great just isn't good enough
Google’s Share of Search in Selected Markets
Internal Environment
SWOT ANALYSIS
STRENGTHS: • Googles reputation and familiarity • Googles speed and user friendliness • Innovative search technology •Tremendous capability in supplier-buyer integration
WEAKNESSES: • Poor product marketing • Over dependence on adbased programs which contributes more than 90% to the total revenue
OPPORTUNITIES
• BRIC Countries • Computer literacy is on the rise • Mobile technologies offer another opportunity. • Cheaper global telecommunication costs open new markets
THREATS
• Competition from Microsoft and Yahoo, their ability to attract and retain users through portals. • Reducing margin due to several internet advertisers • Google’s recent china controversy
External Environment
• Global Presence
External Analysis
• Demographics – Google is well positioned in demographics because it has a relatively young user base. – The company will benefit when some traditional and paternalistic societies begin using the internet more frequently
• Technology – Google believes in continuous innovation through improvement in technology • Economic – Even in the current recession scenario Google continues to do well due to its internet based advertisement programs
External Analysis
• Political & Legal
– China issue
Porter’s 5 Forces Analysis
• Potential new entrants – The barriers to entry in the internet search market are high – A new entrant would need to provide better search results at very fast speeds to compete in this highly competitive market. – Google was founded in 1996, Yahoo, Excite, and Altavista dominated the search market and Google has since eclipsed them all – The market now, however, is more mature with a necessary path dependency to gather data on both the content of webpages and the search history of users
Porter’s 5 Force Analysis
• Suppliers – Google’s ad system is a reliable source of income because both the ad-making partner and ad- receiving individual are both customers of Google’. – So as long as Google maintains its market dominance with the search product, supplier bargaining power will remain low. – Google’s cost of revenue as a percentage of sales in 2008 was 40%. This number is the same for Yahoo suggesting that both companies are equally efficient at maintaining supplier- seller collaboration.
Porter’s 5 Force Analysis
• Competitors
– In 2008, Google had revenues of $16 billion which grew at an average of 115% annually in the preceding five years. – Google’s main competitors, Yahoo, and Microsoft posted revenues of $7.0 billion and $51.1 billion respectively.
Porter’s 5 Force Analysis
Porter’s 5 Force Analysis
Google’s market share in comparison with it’s competitors
Market Share (figures as on December 2008)
9% 11%
Google 23% 57% Yahoo MSN Others
Porter’s 5 Force Analysis
• Customers: – No single account contributes more than 3% to net revenue, and less than 5% of the revenue is generated by any given network partner site. – In Google’s system many advertisers bid on keywords – This distributed approach allows Google to attract both large companies and small “mom- and-pop shops” keeping buyer power low. • Potential Substitutes – there really is no suitable substitute for search.
Competitive Landscape
Search
Competitive Landscape
Advertising
Competitive Landscape
Video Blogging
Competitive Landscape Social Networking
Direct Competitors
• • • •
Internet companies, web search providers, Internet access providers, Internet advertising companies
Marketing Mix – 4Ps
Seller’s view Customer’s view
4Ps - Product
• Advertising • Relationship with Libraries of many universities to digitize books • Google is the world's most popular search engine. • Google Earth : Enables users to view the world from space • iGoogle : a personalized Web page
4Ps - Product
• Google Scholar - supports a range of material such as peer reviewed journals, thesis and other academic material • The ever evolving list of products includes Google finance, Google news, Google blog search, Google video, YouTube, Google sites, Blogger, Orkut, Google Reader, Google Groups, Google Calendar and Google Docs
• Chrome – an Open Source browser
4Ps - Product
4Ps - Price
• Googles most of the products are offered free to customers • So How does Google make money? • Click Fraud
4Ps - Place
• Google’s place is the internet • Focusing on PC Software market e.g. Chrome • Entry into Mobile OS Market e.g. Android
4Ps - Promotion
• Google uses AdWords itself to Promote their Products • They include flyers inside business magazines • They use money off promotions to incentivize advertisers to use AdWords e.g. free 500 Rs. worth of advertising. • Google Chrome has its own TV advert in Japan • Google has a Public Relations function that it uses to proactively manage media. • Various Competitions
Value Proposition
Comprehens iveness and Relevence
Global Access
Value Proposition
Ease of Use
Improving the Web
Multiple Platforms
Market Research
Orkut vs Facebook
Overdepend endence on Advertising
Lack of Integration
Critical Issues
No Diversified Earnings
Traditional Methods Not used
Declining Market Share
Integrate Services Lift the Brand Extend the Market
Marketing Objectives
Uplift the Whole Brand
New Logos
Accolades
Googlenet
Traditional sources of Media Video Ads on Home Page
Simple + Exotic
Strategy Global Ad campaigns New Brand logos
Effect Optimum Market Share: Will give the same worldwide appeal Brand inception: revamping the web page is like redefining brand image.
Accolades and Landmarks
Diminishing market share - the lack of accolades for other services gives the competitors the edge as the credibility cannot be justified
Optimum market share: The integration of services will provide a common a convenient platform for the customers and a greater access through networking of services. Optimum market share: This will reach out to wider masses creating more awareness
Googlenet
Traditional Sources of Media
Trend Analysis
?Rapid Growth since inception ?Decline in revenue growth ? Increasing competition
? Increasing maturity in certain developed Countries
?Weak Economic Conditions ?Seasonal Fluctuations
Financials
Revenues Costs and expenses: Cost of revenues Research and development Sales and marketing General and administrative Total costs and expenses Income from operations Impairment of equity investments Interest income and other, net
2006 100%
2007 100%
2008 100%
2009 100%
Q4 2009 100%
39.8 11.6 8.0 7.1 66.5 33.5 — 4.3
40.1 12.8 8.8 7.7 69.4 30.6 — 3.6
39.6 12.8 8.9 8.3 69.6 30.4 (5.0) 1.5
39.2 12.7 9.2 9.2 70.3 29.7 — 0.4
38.4 12.9 8.9 7.2 67.4 32.6 (19.2) 1.3
Income before income taxes Provision for income taxes Net income
37.8
34.2
26.9 7.5 19.40%
30.1 6.8 23.30%
14.7 8.0 6.70%
8.8 8.9 29.0% 25.30%
2006 Advertising Revenues
2007
2008
2009
Q4-2009
Google web sites Google Network web sites
$ 6,332.8 4,159.80
$10,624.7 5,787.90
$14,413.8 6,714.70
$15,422.7 7,013.30
$4,232.6 1,890.90
Total advertising revenues
10,492.60
16,412.60
21,128.50
22,436
6,131.50
Licensing and other revenues
112.3
181.4
667.1
189.4
196.3
Revenues
$10,604.9
$16,594.0
$21,795.6
$22,625.4
$6,327.6
Advertising Revenues
2006
2007
2008
2009
Q42009 67%
Google web sites
60%
64%
66%
67%
Google Network web sites
39
35
31
30
30
Total advertising revenues
99
99
97
97
97
Google web sites as % of advertising revenue Google Network web sites as % of advertising Revenues
60 40
65 35
68 32
69 31
69 31
Licensing and other revenues
1%
1%
3%
3%
3%
Revenue Contribution 2009 Google web sites ................................. Google Network web sites ......................... Licensing and other revenues 3% 30%
67%
Advertising Growth
•Advertising revenues resulted from an increase in the number of paid click.
•Also from Hedging Gains i.e Foreign exchange risk management program •Other Reasons ? Increase in Aggregate AD Traffic ? Expansion of Google products ? Increase in no. of Google Network members
Contingency Planning
Contingency issues
•Legal Issues
?Google also has copyright claims filed alleging that features of certain products and services. ?Google is litigating, or have recently litigated similar issues in other cases, in the U.S., Australia, Austria, Brazil, Chile, China, France, Germany, Israel, Italy, Taiwan, and the United Kingdom.
•Implications
? Prevention from offering Services ? Loss in Revenues and other business harm.
•Foreign Exchange Risk •Privacy concerns •Increasing usage of non-PC devices for Internet •Emerging Technology to Block Ads
Keys to Success
Keys to Success
1. Technology
2. Business Model Innovation
3. Brand
4. Focus On The User Experience
doc_336123170.pptx