A business analysis project on Google Inc.: A market leader running into mischief?
Research Paper (undergraduate) from the year 2011 in the subject Business economics - Company formation, Business Plans, grade: 1, Anglia Ruskin University, course: Business Analysis, language: English, abstract: Google Inc. (Google), founded in 1981 by Larry Page and Sergey Brin, two Stanford students, has shortly turned into a global technology leader, overruling its global competitors in providing search engines: Yahoo, Baidu and Microsoft (Business Insights, p. 32, 2010). Above, Google has scarcely been rated as most valuable brand worldwide (Berger, 2010). Financial data are fairytale-like: from $ 85 (IPO, 2004), share price rose by 800 percent up to $ 642; margins of 36,8 percent, annual revenues of $ 29,32 bn and an EBIT of $ 10,8 bn strengthen the picture of high profitability and economic well-being (Google Inc., p. 27, 2010; Osiris, 2011). Delivering online advertising which is significantly adjusted to the customer primarily generates revenue for Google: together with licenses for its search engine technology, GoogleAdWords, an auction-based advertising program, and GoogleAdSense, distributing ads in the Google Network, are main sources of income (Stross, 2008). Today, Google holds market share in global search advertising of 74,3 percent (Business Insights, p. 12, 2010); longing for even more awareness, content such as YouTube, GoogleEarth, GoogleEnterprise or GoogleMaps is only a precise of what Google additionally offers – all services being positioned online (Google Inc., p. 4f., 2009). Downside of the global success story is that Google keeps walking on the edge of ethics and legality, as detractors arraign (Hintermeier, 2011). Further, the company is already under the weather of internal alterations and legal denunciations (Fleischmann, 2011). Though analysts foresee further growth in 2011/2012 (Moran, p. 20, 2011), increasing rivalry as well as internal and societal debates might harm the company in the author’s opinion. Along with an external and internal review focusing on the online advertising market, benchmarking two main competitors will provide a detailed view upon Google in order to identify threats and benefits particularized. The aim of this paper will be to analyze and evaluate Google’s strategy in terms of quantitative and qualitative data, providing an elaborated basis for recommendations on how to defend market leadership, observe strategic goals, and cope with obstacles. Relevant recommendations will be modeled in a spreadsheet to prove financial outcomes.
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