Google Inc.

(2010):
The Future of the Internet Search Engine

Prepared for:
Mrs. Cherrie Prelle D. Pascual

Prepared by:
Angela Calabias
Emerlie Sabino
Jeanelyn Dominguez
Jenny Rose Naboye
Julius Cesar Estelong
Kathlene Trixia Bagiwan
Remy Serafin
I. Current Situation
A. Current Performance:
- Sergey Brin and Larry Page founded Google Inc. in September 1998 to “improve
the ways people connect with information. “This vast company provides users
with countless options to harness and understand the plethora of information
available to them. Google concentrates its resources on its search engine, operating
systems, advertising, and enterprise. By sorting through its index of websites,
Google selects the sources most relevant to its users, creating a search engine that
is easy to use and quickly provides quality results. The company relies on its core
principle— “it’s best to do one thing really, really well”—and constantly continues
to develop its search technology.1 Google is also known for its various operating
systems. Through innovations in phone technology, web browsing, television, and
electronic books, Google constantly changes the way people live. The company
introduced its Android operating system as a free platform that can be installed on
any mobile device to “provide consumers with a more powerful mobile
experience. “Google has also created its own web browser to improve the way its
users access the internet, as well as Google TV—a platform that allows for the
consumer to experience the internet on their television—and Google Books—an
online source for utilizing the content from printed books electronically. Google’s
largest portion of revenue comes from advertising. With the means to display ads,
Google provides third-party entities targeted to specific users depending on factors
such as search criteria, online viewing content, and residency. The company uses a
system called the cost-per-click basis, requiring the creator of the ad to pay Google
only when an ad is clicked on by a consumer. Google provides services for
common users and designs specific products for corporate settings, such as
governments, businesses, schools, and non-profit organizations.

B. Strategic Posture
1. Mission
- is to organize the world's information and make it universally accessible and
useful.
2. Objectives
 To push existing technology’s limits to offer an accurate, fast, and user-
friendly service for information accessibility.
 To push the ad system
 To push the communities and content
 To make sure tools run everywhere.
 To have the world’s top Artificial intelligence research laboratory
 To have a universal search engine
 To have ads accessible on the mobile platform among other hardware
appliances
 3. Strategies
- Google’s corporate strategy extensively focuses on advertising as its business
function.

II. Strategic Managers

A. Board of Directors
1. Nine current members of the Board of Directors
2. Former Sun Microsystems executive Eric Schmidt has served as Chairman of
the Board two different times and is currently. The Google founders Larry
Page and Sergey Brin are members of the Board of Directors.
3. Most members have been involved with Google for at least 5 years.
4. All the members are very prestigious, having or having had additional top
executive positions such as top positions of the best Universities, and other
organizations.
B. Top Management
1. Larry, Sergey, Eric, and other members of the senior management team are
what make it possible to execute Google’s business strategy.
2. The future success of Google depends largely on the continued service of key
members of the senior management team. In particular, Larry Page, Sergey
Brin, and Eric E. Schmidt are critical to the overall management of Google, as
well as the development of the technology, the culture, and the strategic
direction.
3. All the executive officers and key employees are at-will employees. The loss
of any of the current management team could seriously harm the business.

III. External Environment

(EFAS Table; see Exhibit 1)
A. Natural Environment
1. Energy consumption and carbon footprint impact on world’s climate. (T)
2. Increasing greenhouse-gas emissions. (T)
B. Societal Environment
A. Economic
1. Market share can be increase since IT is spending continuous growing
constantly in U.S market and will not affected by inflation. (O)
2. High competition arises since market is going to mind-cycle correction period.
(T)
3. Economic growth of developing countries. (O)
4. Impact of global economic crisis (O)
B. Technological
1. Google search engine is growing much faster than any present-technology
search engine. (O)
 2. Extensive investment in Information Technology Research and Development.
(T)

C. Political-Legal
1. Global political situation remains stable. (O)
2. Market share and revenues are critical when political dilemmas become
worse. (T)
3. Censorship issue with China (T)
4. More legal restrictions on its operations. (T)
5. Increase in legal cost. (T)
D. Sociocultural
1. People desires convenient living style. (O)
2. Increased usage of mobile phones. (O)
3. Growing use of internet globally. (O)
4. Suspicions about the security of intellectual properties. (T)
C. Task Environment
1. Low Competitive rivalry or competition
- low number of firms, Strong Brand, Low switching costs (T)
2. Low Bargaining power of buyers
- High reputation of google, High and increasing demand from buyers (O)
3. Low Bargaining power of suppliers.
- Google itself is a supplier (T)
4. Low Threat of substitutes or substitution
- Hard to compete with google due to its continuous innovation (O)
5. Low Threat of new entrants or new entry
- high cost of doing business & brand development (T)

IV. Internal Environment

(IFAS Table; see Exhibit 2)
A. Corporate Structure
1. Google specifies hiring young, innovative employees. (S)
2. Google needs constantly, creative young adults to help its corporate structure
grow fast and grow as a whole. (S)
3. Google is not looking for someone who is good at a particular area or
specialists in one department. (W)
4. Google is looking for employees who are good at everything Google needs
them to be, and that is just a couple of years, but in long term. (S)
B. Corporate Culture
1. Google believes that everyone, not just board members, has the obligation to
contribute, and give ideas to further improve Google as a whole. (S)
2. Google specifies the working environment, according to Google.com, it states,
“Our offices and cafes are designed to encourage interactions between
 Googlers within and across teams and to spark conversation about work as
well as play.” (S)
3. Google wants employees who are innovative, creative, and young. (S)
C. Corporate Resources
1. Marketing
a. Google focuses on the user and all else will follow. (S)
b. Over reliance on digital marketing.
c. Unique working culture helped creating unique brand image. (S)
d. Efforts focus on Distribution, BCG Matrix, and Brand Equity. (S)
e. Google facilitate the efficient organization, storage and retrieval of data or
information across online platform. (S)
2. Finance (see Exhibits 4 and 5)
a. Google continues to show strong financial results from the year 2007 all the
way to 2009 as seen on the income statement. (S)
b. Despite a significant drop to $307.65 million in the stock price in the year
2008 due to the economic recession, Google’s revenue continues to increase
and managed to recover its stock price to its previous level of $619.98 million
at 2009. (S)
c. With its increasing profit margin, Google continues to reinvest into its R&D,
services capabilities, and company acquisitions. (S)
3. R&D
a. Google continuously allocates specific funds and investments in research and
development each year. (S)
b. A created a notable enhancement to search in the engine. (S)
c. Strategic investments in critical product areas. (S)
4. Operations
a. As of 2010, Google is only operating with software and an online search
engine. (W)
5. Human Resources
a. By hiring the brightest and most talented workers, Google can stay ahead of
their competitors. (S)
b. Employees are Google’s main human resource to stay competitive now and in
the future. (S)
6. Information Systems
a. To maintain power and becoming become a web search engine, Google has
been rigorously working to gather as much information about everyone as
much as possible. (S)
b. Google has become one of the world’s leading information providers to the
public. The more information they could collect the more users will go on
their site and the more companies will pay Google to do advertisements. (S)
V. Analysis of Strategic Factors
A. Situational Analysis (SWOT) (SFAS Matrix; see Exhibit 3)
1. Strengths
 a) Workers and organizational culture
b) Recognition of brands
c) market leader in search engines
d) Offer the top internet goods and services
e) Advertising earnings and contractual conditions
2. Weaknesses
a) Wide Range of Services
b) Antitrust inquiries
c) Chinese Market
d) Tax Evasion
e) Private information
3. Opportunities
a) Mobile connections and improvements
b) The launch of Google Fiber and the improvement of the cloud service
c) Purchases of associated business
d) Growing influence in the consumer electronics sector
e) The development of social networking websites
4. Threats
a) Competitive search engines
b) Security Threats
c) Social media competition, such as Facebook
d) Intellectual assets
e) The development of new technology
B. Review of Current Mission and Objectives
- Their mission statement is over a decade old, which for a technology company
is a long time. Although the focus is still on information, Google’s scope has
widened to operate as a media agency, digital TV, cartographer, wireless car
industry, providing fiber optic cable services, mobile phone application
software, artificial intelligence, and space exploration firm to mention only but
a few. Google’s diversified products support its core business, but the
peripheral projects need to factor into this statement.

VI. Strategic Alternatives and Recommended Strategy

A. Strategic Alternatives
1. Growth Strategy: Google should consider integration that leads this company to
benefit from market share in merges & acquisitions. This strategy is preferred and
achievable because it allows Google to quickly adopt new technologies and
processes rather than trying to develop them internally.
a. Pros: The benefit of this strategy is that it aids in the operation of the
business. USA and international to survive in the touch competition through
mergers and acquisitions with other companies strong in various fields of
internet technology. As a result, Google's market share and recognition will
grow, as will its revenue.
 b. Cons: The disadvantage of this strategy is the large investment required to
acquire new businesses.
2. Stability Strategy: Google has a strong corporate culture, innovative technology,
and a good brand name. So, all these things let this company position in the global
market best against the competitors. The stability strategy enables Google to
maintain its technology, users, and business growth, and before the industry
situation drop in any case.
c. Pros: The advantage of this strategy is that it secures and maintains Google's
global market share stability through its existing competitive advantage and
competency among competitors. The number of users is growing by the day,
so it is beneficial for Google to keep them on the products and services.
d. Cons: The advantage of this strategy is that it secures and maintains Google's
global market share stability through its existing competitive advantage and
competency among competitors. The number of users is growing by the day,
so it is beneficial for Google to keep them on the products and services.
B. Recommended Strategy
1. Pursue growth and quality control activities
- It must keep up the high caliber of its engine if it wants to keep its position as
the top in the search market. It is advisable to include more media and expand
the set of documents that may be searched. Google Inc. should constantly keep
an eye on its rivals and, where appropriate, try to buy them. It is also suggested
that this business develop plans to lower its high operational expenses. In order
to reduce the cost of moving data across continents or regions, this can be
accomplished by negotiating bulk discounts with PC component suppliers. The
business should keep up the pressure on mobile search by forming
collaborations with like-minded businesses.
2. Although Google enjoys a solid competitive position moving forward, it should
think about increasing its R&D spending to encourage inventive and creative
activities. Additionally, to effectively integrate and interoperate its products, the
company needs to keep looking for and forming strategic relationships with other
businesses that share its goals.
3. It is also advised that Google keep broadening the range of products it offers to
create new revenue opportunities. Last but not least, the company ought to think
about spending money on internet security programs to retain its clients happily
and devotedly.

VIII. Implementation
A. Amass the finance department and determine the budgets and keep in mind Google's
assets and liabilities. Emerging opportunities or even liabilities are the factors that
must consider for future endeavors and financial obligations in establishing the
budget.
 B. Accumulate and assemble an experienced analyst team. Google should conduct
research to ascertain the most efficient strategy of where to establish R&D branches
that will yield the greatest success.
C. Sufficient communication. Communication should be used when setting up new
facilities and branches globally. Google should assemble knowledgeable and
advanced technicians to establish and maintain effective and efficient means to do so.
D. Google should further motivate advertisers to invest more funding into ads that have
fewer clicks, which would provide Google with greater profit.

IX. Evaluation and Control

A. Google have done so through careful selection of selecting employees, following,
implementing their mission statement, and creating products that are affordable and user-
friendly.
B. Google has knocked off their top competitors, Yahoo!, and Bing, in the search engine
industry.
C. They have also neared their mobile competitor, Apple IOS, and Google has projected that
they will gain more market shares from IOS in the near future.
D. According to this case study, Google has met most of their objectives expecting they
must make improvements in foreign policy law and continuing fair practice.
E. Google has a rising projected growth rate, which makes them very attractive to investors.
F. They continuously innovating the web search engine and making almost everything is
accessible through their website and mobile.
EXHIBIT 2

Internal Factors Weight Rating Weighted Comments

score
Strengths
Workers and 0.15 5 0.75 Google worked to gain a globally diverse workforce with
organizational different perspectives in which employees were rewarded for
culture performance

Recognition of Brands 0.15 5 0.75 Google is one of the strongest brand recognitions in the world
by its growth, product and application development
Market Leader in Search Engines 0.10 4 0.40 It has a domineering and lion’s share of the internet searches
worldwide
Offer the top internet goods and services 0.10 4 0.40 Provide the products and services like Gmail, You Tube and
Google Docs etc.
Advertising earnings and contractual 0.05 4 0.20 97% of Google’s revenues were generated from advertising
conditions

Weaknesses
Wide Range of Services 0.05 2 0.10 Increased of Cost

Antitrust inquiries 0.15 4 0.45 Attempt to Monopolize Search Engine Industry

Chinese Market 0.10 3 0.30 Unable to satisfy Chinese Consumers
Tax Evasion 0.05 2 0.10 Exploiting legal loopholes to avoid tax

Private information 0.10 2 0.20 With so many information within Google, they must do a better
job to protect them from increasing hackers
1 3.65
Total Scores
EXHIBIT 1

Opportunities WEIGH RATE WEIGHTED COMMENTS

T SCORE
Mobile connections and improvements 0.10 5 0.50 there is a mobile device in most pockets today, Google is following
and adding to this trend to continue expanding
The launch of Google Fiber and the 0.10 3 0.30 It will bring ultra-high to increase easy access on the web and it
improvement of the cloud service will increase the profitability of Google

Purchases of associated business 0.08 3 0.24 Google has currently acquired many companies and if they
continue, there is no stopping its growth.
Growing influence in the consumer 0.05 2 0.10 The firm can boost its aggressiveness in offering consumer
electronics sector electronics, such as Google’s Nexus devices

The development of social networking 0.05 2 0.10 It can compete with Facebook and Yahoo.
websites

Threats
0.14 3 0.42 Competitors like Yahoo and Bing etc. still hold a large share of the
Competitive search engines market

0.17 3 0.51 Google needs to protect the privacy of the users

Security Threats

0.12 2 0.24 Social Media has threatened Google’s dominance in the internet
Social media competition, such as world
Facebook

0.08 4 0.32 Google has to protect themselves from possibly being imitated.
Intellectual assets
 0.11 4 0.44 Google might fail or take time to migrate its existing technology.
The development of new technology

1 3.17
EXHIBIT 3
Strategic Factors Weight Rating Weighted Short Intermediate Long Comments
Score
Workers and 0.15 5 0.75 x Google worked to gain a globally diverse workforce with
Organizational different perspectives in which employees were rewarded for
Culture performance
Recognition of 0.15 5 0.75 x x Google is one of the strongest brand recognition in the world
Brands for its growth, product and application development
Antitrust inquiries 0.15 4 0.6 x x Attempt to Monopolize Search Engine Industry
Chinese Market 0.10 3 0.3 x Unable to satisfy Chinese Consumers
Mobile connections 0.10 5 0.5 x There is a mobile device in most pockets today, Google is
and improvements following and adding to this trend to continue expanding
The launch of 0.10 3 0.3 x x It will bring ultra-high to increase easy access on the web and it
Google Fiber and will increase the profitability of Google
the improvement
of the cloud service

0.14 3 0.42 x x Competitors like Yahoo and Bing etc. still hold a large share of
Competitive search the market
engines

0.11 4 0.44 x x Google might fail or take time to migrate its existing technology.
The development
of new technology

Total Scores 1 4.06

EXHIBIT 4 2007 2008 2009 2010

1. LIQUIDITY RATIOS
Current 8.49 8.77 10.62 4.16
Quick 7.43 7.62 9.46 12.26
2. LEVERAGE RATIOS
Debt to Total Assets 0.08 0.08 0.11 0.20
Debt to Equity 0.09 0.09 0.12 0.07
3.ACTIVITY RATIOS
Inventory turnover-sales 15.35 16.50 7.39 5.86
Inventory Turn-over-cost of sales 15.35 16.50 7.44 6.90
Avg. Collection Period-days 23.78 22.12 49.40 62.29
Fixed Asset Turnover 2.06 1.88 2.09 1.80
Total Asset Turnover 1.31 1.37 0.58 0.51
4.PROFITABILITY RATIOS
Gross Profit Margin 0.13 0.88 62.67 64.47
Net Operating Margin 0.60 0.60 35.14 35.40
Profit Margin on Sales 0.25 0.19 27.57 29.01
Return on Total Assets 0.20 0.21 16.1 14.70
Return on Equity 0.19 0.15 18.11 18.39
 EXHIBIT 5 2007 2008 2009
Common Revenues $16,593,986 $21,795,550 $23,650,563
Size Income Cost of $6,649,085 $8,621,506 $8,844,115
Statement revenues
for Google Expenses
Inc. 2010 Research & $2,119,985 $2,793,192 $2,843,027
Development
Sales & $1,461,266 $1,946,244 $1,983,941
Marketing
General $1,279,250 $1,802,639 $1,667,294
Administrative
Total Cost & $11,509,586 $15,163,581 $15,338,377
expenses
Income from $5,084,400 $6,631,969 $8,312,186
Operations
Impairment of - ($1,094,757) -
Equity
Investments
Interest income $589,580 $316,384 $69,003
& other, Net
Income Before $5,673,980 $5,853,596 $8,381,189
Income taxes
Provision for $1,470,260 $1,626,738 $1,860,741
Income Taxes
Net Income $4,203,720 $4,226,858 $6,520,448
Net income per
share of Class A
and class B
common stock
Basic $13.53 $13.46 $20.62
Diluted 13.29 13.31 20.41
Shares 313 315 318
outstanding
(mil)
Year-end stock $307.65 $307.65 $619.98
price

EXHIBIT 6 IMPLEMENTATION, EVALUATION, & CONTROL PLAN FOR GOOGLE INC. 2010
STRATEGIC ACTION PRIORI WHO WILL WHO HOW CRITERIA USED
FACTOR PLAN TY IMPLEMENT WILL OFTEN
SYSTE REVIEW REVIEW
M (1-5)
Workers Establish a 1 HR COO Weekly Workers and organization
and culture of Administrator performance
organization accountabilit
al culture y for all
workers and
the entire
 organization.
Recognition Build strong 1 Brand CEO Annually Brand recognition growth
of Brands brand Manager
identity,
consistency,
visibility, and
recognition
Anti-Trust Provide safe 1 IT Systems IT Daily Customer trust growth and
Inquiries and trusted Administrator Manager satisfaction
systems
Chinese Identify 2 Marketing VP CEO Semi- China will unban Google to their
Market ways to Annually market
build trust
from China
Mobile Strengthen 2 IT Manager COO Monthly User Growth and user satisfaction
Connections and Extend
and internet
Improveme access
nts
The Launch Service 3 IT Manager COO Annually Market research and customer
of Google Expansion satisfaction
Fiber and
the
Improveme
nt of the
Cloud
Service
Security Tighten 1 IT Systems IT Monthly Number of Security threats
Threats online Administrator Manager
security
system
Competitive Focus on 1 Competition HR Yearly Return on Product Development
Search innovation Committee Administr Expense Metric (RoPDE)
Engines and ator
performance
REFFERENCES
 Google Inc (GOOG) SEC Annual Report (10-K) for 2008 (thequarterly.org)
 (PDF) The Ins and Outs of Google Inc.; A Strategic Analysis
(researchgate.net)
 Google Strategy in 2010 | Business Strategy Case Study Analysis
(bohatala.com)
 Case Study Analysis: "Google's Strategy in 2010" - 1201 Words | Case
Study Example (ivypanda.com)