Strategy Framework of Google - Free Report Example

Using Porter’s Five Forces model as the strategy framework, the kind of innovation that Google’s search engine is at is incremental innovation. It is such that advertising on Google’s search engine was an effective way of selling all manner of goods and services, and the advertisers were eager for more. Google serves an overwhelming majority of searches in most of the developed countries and hence earned the benefit of capturing higher shares for the budget of advertisers. The company was also at the time enjoying the privilege of the opportunity of the search engine because the core business was producing more profit, and there was a free flow of cash.

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Incremental innovation is such that it builds on the already established knowledge base, and it results from steady improvement. Google’s production of more profit and free cash flow led to steady progress hence the chance to launch the search engine. Implementing the change in the company was necessary to focus on improving the existing productivity and ensuring differentiation in competition. Incremental innovation was thus a tactic that Google used for consumer technology as the company strived to improve personal devices to have more features regularly.

Considering Porter’s five forces model, competition in the industry may have been a contributing factor to Google's launching of the search engine. Competitors have the ability to undercut a company hence the need for Google to stay ahead in the market by launching a variety of products and services that will continue to put them at the top of the market. Suppliers and buyers tend to seek out the competition of a company if it can offer better deals and lower prices.

Google may have also considered the power of customers because they have the ability to drive the prices. The number of buyers or customers of Google, their significance, and the amount that would cost Google to find new customers may have contributed to the launching of the search engine. Companies try their hardest to earn more market share throughout the regions and have a robust client base. The case suggests that search engine leads were more effective compared to banner ads. Google sought to advance the search engines by making sure that it could retain information for longer, and there were steps to ensure that all logs were anonymous. The launching of the search engine was a form of incremental innovation because of its benefits and circumstances of development.

Why Google needs to pursue Alternative Revenue Streams

The industry in which Google operates is hostile and also volatile. This way, it is necessary to diversify its source of revenue. The current Google market share has mostly increased up to 90% on the international level; hence may underestimate any forms of competition. Having such a high stake in the market, Google has benefitted from having a large number of followers and has had unprecedented success levels in terms of earning revenues. A large percentage of the revenue that Google gets is from online advertisements and if there is no continued success in that sector, Google could be unable to exist. This way, it is necessary that Google looks for alternative revenue streams such as diversifying their services and projects to earn more profit and deal with the threat of the uncertainty of online advertising.

Google needs to maintain distinctive competence by developing superior search solutions as well as monetizing them through targeted advertising. Such an approach will be able to offer many avenues for the growth of Google, especially when there will be a broadening of the search to include aspects of print, video, mobile, and other sources. Google can also branch in other areas such as expanding into a full portal like Yahoo! by integrating content into the channels. This way, Google will have done much better in terms of innovation and getting other alternative sources of revenue that are more reliable. These other options will be necessary to challenge its competitors, such as the prevalence of Microsoft and its development of more products to compete. Another option for Google is to build warehouses that will be necessary to hold the goods of sellers as well as ensure delivery on the same day. Investing heavily in more speculative new products such as Google Glass or self-driving cars will be another alternative to diversify their revenue income.

Google should pursue alternative revenue streams because, in the event of a pandemic that would hit online advertising such that it exists no more, the company will also cease to be functional because it will be operating on losses. Diversifying their source of income will be the necessary way to ensure that the company still earns profits even when one area has to go south because of uncertain circumstances.