Google Inc.’s Strategy and Competition in 2009

Competition in the search industry

The competition in the search industry is mainly between Google and Yahoo, Microsoft, Ask.com, AOL, and others. Others refer to a combination of many small search engine companies present in the world today. It is crucial to note that this is a new industry that was non-existent twenty years ago. Google has also been involved in taking over new companies to increase their productivity and also to reduce competition in the market in the future.

The search industry is highly competitive. Each company has to be extremely innovative and keep a close eye on competitor’s actions at the same time, to maintain their competitive advantage. Google’s strongest competitor is Yahoo. This is based on data collected between July 2006 and June 2009 that showed a rise in Google’s market from 65% to 43.7% between the two periods. The second company is Yahoo with a 19.6% market share in 2009 which is a reduction from 28.8% in 2006. Google’s weakest competitor according to the same statistics is AOL. Its market share reduced from 5.9% in 2006 to 3.1% in 2009.

The search engine industry is exceptionally attractive. This is mainly because it is a remarkably young industry and its growth potential is limitless. According to recent studies, North America has the highest internet penetration in the world at 74%. Considering Asia with 17.4% internet penetration and other untapped markets, such as Africa, there is a high potential for growth depending on how well these companies invest in resources to tap into these markets shortly. The company that will be the first to put together its resources and enter these new markets will stand a better chance to grow.

The Google company’s key resource strengths and competitive capabilities

The major strength that Google holds is its great infrastructure. Over the years, Google has worked on modifying its infrastructure to ensure fast and accurate feedback for the user (Gamble & Thompson, 2010). Google is highly personalized, so the one gets relatively personalized results from a search. Google offers a wide range of information that one is searching for.

However, Google faces some weaknesses in its functioning. Google has demonstrated its inability in employing and retaining important people in the past year. It is difficult for Google to cut down the list of candidates for the job positions as thousands of people apply hoping for being hired. Over the years, Google has taken on many contractors, and in some cases, they just waste Google resources without doing anything important. Google also demonstrates its negative side by hosting pornographic sites (Google, 2009).

Google’s opportunities lie in the fact that it aims at the acceptance of the Chrome Operating System and the modification of its e-mail services. Acceptance of a new operating system will limit the chances of Microsoft as its Operating System is expensive. Due to Google modifying its e-mail services, it will gain a considerable part of the market from Yahoo.

Security is the main factor to be considered ensuring Google’s success. Security does not allow to match the aim of Google which is to promote speed and accessibility. Competition is also a significant threat. Unlike Google, Microsoft has money and resources to support innovation. Microsoft and Yahoo have decided to collaborate in the hope to surpass Google. Microsoft and Yahoo have also joined forces in a lawsuit to prevent Google from hosting and selling published documents (Google, 2009). Other search companies are gaining Google’s employees over due to their inability to employ and retain their personnel.

References

Gamble, J. E., & Thompson, A. A. (2010). Essentials of Strategic Management: The Quest for Competitive Advantage. New York: McGraw-Hill/Irwin.

Google. (2009). Our products and services. Web.