Assessment of the current strategy and the capacity to sustain competitive advantage
Google.com faced serious challenges during its venture into the China market. There was competition from other internet search providers who were already operating in China. For instance, there was Baidu, and yahoo. However, Google came up with strategies aimed at ensuring that the company beats its competitors in the market. They came up with strategies aimed at offering best search services based on search quality. This means that in China Google is positioned as the best search engine in terms of search results quality. In fact, Google ensures that it provides information with a lot of precision hence remaining promising to most of its users. In addition, Google competed on image search, which was unique in China (Turley 2010, p. 47).
This means that internet users can view clear photos and pictures from Google engines unlike other search engines in China. Google search is also reliable since internet users can make use of it anytime and anywhere. This is due to the fact that Google’s technical teams are ever busy and keen to correct any error. Therefore, Google users do not experience problems with the search engines hence preferring it to other players in Chinese market. This strategy enabled Google to command quite a number of internet users in Chinese market despite having issues with the Chinese government on censoring of information. Google introduced Google.cn to the Chinese market to ensure that they comply with regulations set by the government in China. The Government of China filtered some information from Google.com hence making it slow due to delayed search results (Ireland, Hoskisson and Hitt 2009, p. 103). As a result, Google introduced Google.cn which eliminated all contents that were inconsistent with expectations of the Chinese Government. This ensured that Google provided its users with results faster than other players in the market.
The current strategy used by Google in Chinese market has the capacity to sustain competitive advantage. Google ensures that their level of technology is sophisticated in a way such that their competitors cannot easily imitate (Slamanig 2012, p. 65). For example, Google’s image search enables internet users to get results of images quite fast. In addition, they can access quality images and enhanced graphics. This has created an uphill task for their competitors because they cannot provide image searches similar to those of Google. In terms of reliability, Google has put in place measures to ensure that breakdowns are predetermined. This enables its engineers to keep the searches going hence enhancing reliability. This has enabled sustained competitive advantage as internet users rely on Google since they are assured of attaining their search results.
Findings from external/internal analysis
Any existing organization is affected by internal and external factors in the environment. Therefore, it is essential to carry out a SWOT and PEST analysis to understand all factors that affect Google in China. The SWOT will highlight on the strengths and weaknesses of google.cn in China. These represent the internal analysis of the company since it concerns the internal operations of Google.cn. In addition, opportunities and threats will represent external factors alongside the PEST analysis. PEST stands for political, economic, social and technological factors affecting goolge.cn.
Other external factors that affect the venture of Google in Chinese market include political, economic, social and technological factors. Google’s venture into the Chinese market was faced by political challenges where the government in China had a firewall control approach. This ensured that only information that was in line with set standards could be made available in the search engines. They went ahead to insist that they have to filter all information provided by Google.com. This slowed down their services, as a result, the company decided to come up with a Google.cn which adhered to all regulations in China. In fact, the Chinese government enforces oppressive censorship while Google advocate for freedom of speech (Fan 2001, p. 56).
Social aspects also affect the business of Google in China. For instance, Google is working on incorporating its services with social networks to attract potential customers in China. This is due to the fact that although Google and the Chinese government does not relate well, Chinese citizens may develop healthy relationships with the Google Company. On the other hand, people might decide to believe in government hence making it hard for them to use Google search engines.
There are also economic factors in China which may hinder or favor Google’s venture into the Chinese market. There are many opportunities in China for Google.cn since China is a developed country and many investors would consider posting advertisements in Google. Google may also take advantage of China’s internet ecosystem to expand its market share (Drysdale 2000, p. 98). Baidu, which is run by Chinese citizens and works well with the Chinese government, may pose enormous dangers to Google’s venture into the Chinese market. Since Google had refused to comply with the Chinese government it may face a lot of challenges which may hinder its economic growth in Chinese market.
Finally, technological factors may also have considerable influence to Google’s venture into the Chinese market. Since China is technologically developed, Google stands better chances of venturing in the Chinese market. In fact, Google has a lot to offer in Chinese market since it is a technological based company.
Key strategic issues/findings
Strategic issues are those that help the company to advance from where it started. They help the company to advance in terms of increased competitiveness, profitability, selling results and productivity. Google.cn has several strategic issues which aim at provision of quality products in China. Google invests in new products that enable its customers to customize their searches hence ensuring them that they beat their competitors. There is efficiency and speed in Google searches hence making them preferable to many customers.
Google has come up with new strategies aimed at ensuring smoother relationship with the Chinese government. For example, Google introduced Google.cn in order to market its products better in China. Google.cn adhered to all regulations put in place by the Chinese government. In addition, Google came up with strategies aimed at ensuring that they increase their sales in the Chinese market (Williams 2009, p. 62). For instance, they offered ideal offers for investors willing to advertise on Google space. Google.cn also ensured that its users got access to many services that are powered by Google such as Google maps and Google images. Finally, Google takes part in acquisition of famous companies that add value to its services hence enticing potential customers in China.
Evaluation of options
Google had many options in venturing the Chinese market some of which included mergers. Depending on people’s reactions to their venture Google might decide to come up with mergers with Chinese companies such as Baidu. This can help the company in dealing with oppressive government policies that might make it difficult for the giant search company to establish its business in China. Another option is to quit and consider venturing into other markets in the world. For instance, if the government in China becomes harsh on google.com, it can be wise for the company to cease its services in China and consider doing business with countries that are friendly.
Google should also consider an option of cooperating with the government in order to foster excellent working relations in China (Drysdale 2000, p. 94). For instance, they should agree to work with the government in censoring information as required by law. This is the best option since Chinese citizens will have a positive attitude towards the company if it has solid working relations with their government. Furthermore, the company will be able to understand what is right for its customers as put by the Chinese government hence giving it an opportunity to develop products that match their expectations.
Recommendations of possible best
It is recommended that Google.cn works with the government to ensure that they offer quality services to Chinese people. Google.cn should ensure that customers are given priority by ensuring that they provide services that are conversant with needs of people in China (Fan 2001, p. 56). The company should ensure that they provide enticing offers to business people who may be willing to buy advertisement space on Google pages. This can attract a lot of investors and in return bringing a lot of revenue to the company. In fact, Google.cn stands better chances of acquiring sustained competitive advantage as some services offered by them cannot be offered by their competitors. For instance, their variety of products ensures that customers get access to a variety of services which are not offered by its competitors. In addition, most of its services are difficult to imitate hence promised it of sustained competitive advantage as the company will enjoy those services solely. Google should ensure that they do everything within their reach to ensure that they retain quality services to their customers in China (Williams 2009, p. 62). Therefore, Google.cn should consider making wise decisions that can enhance sustainable competitive advantage in the Chinese market.
References
De Wit, B & Meyer, and R 2010, Strategy synthesis: resolving strategy paradoxes to create competitive advantage, 3rd edn, Thomson, London.
Drysdale, P. 2000. China’s Entry Into the World Trade Organization. Routledge, New York.
Fan, X. 2001. Communications and Information in China: Regulatory Issues, Strategic Implications. University Press of America, Sydney.
Ireland, R. D., Hoskisson, R. E. & Hitt, M. A. 2009. Strategic Management Competitiveness & Globalization 9th ed. Nelson Education Ltd, Canada.
Slamanig, M. 2012. Carrefour in China. GRIN Verlag, London.
Turley, J. 2010. Connecting with China: Business Success through Mutual Benefit and Respect. John Wiley & Sons, New York.
Wheelen, T. L. & Hunger, J. D. 2006. Concept in Strategic Management and Business Policy 10th ed. Prentice Hall, United State of America.
Williams, A. 2009. Contemporary Issues Shaping China’s Civil Aviation Policy: Balancing International With Domestic Priorities. Ashgate Publishing, Ltd, Michigan.
Appendices
Strengths of Google Company are the fact that customers can access information from the search engine ultra-fast. Every user obtains useful information from all parts of the world within no time. Compared to its competitors, Google can integrate its searches into a vast number of languages. This makes it possible for users from various backgrounds to make proper use of its search engines to search for information. In fact, all Google’s products are its main strengths since they enhance relationships between its stakeholders and customers. For instance, Google has its information organized remarkably well hence enabling customers to access it easily.
Google.cn has various weaknesses, which include difficulties in differentiating between right and offensive content. Since Google is accessed by people from different cultural backgrounds, it becomes extremely difficult to tell which information is right and which is wrong. This is due to the fact that some contents may be acceptable in one culture and unacceptable, in other cultures (Slamanig 2012, p. 65). Another weakness associated with Google.com is that its information can be manipulated. In addition, many of its products are not known to all its users.
In the external environment, it is necessary to look at opportunities that Google.cn has in the Chinese market. For instance, advancement in technology and increase, in internet usage, has created a strong market for google.cn in China. Google uses programs such as the AdSense to generate income. This is where web publishers get paid for allowing advertisements sponsored by Google to be placed on their places. In fact, there are a lot of advertisements placed by Google for the internet users hence bringing a lot of revenue for the company. Investors in China prefer placing their advertisements in Google pages to ensure that they reach many people. Furthermore, many organizations are opting to partner with Google to increase its popularity e.g. Picasa (De Wit and Meyer 2010, p. 74). Google has had other opportunities in Chinese market such as acquisition of companies dealing with information technology.
There are various threats facing the company in Chinese market, and these include competition from other search providers in China. These include Baidu, Yandex and Yahoo. Changes in user preferences have also been a threat to Google.cn as customers keep on expecting better quality results due to advancing technology.
Google must also make use of the porter’s five forces model when venturing into the Chinese market. This is where the giant search plant should ensure that there is a healthy working relationship with their competitors in China. For instance, google.cn should be operated in a way such that it respects other players in the industry. In fact, the company should come up with ways of dealing with rivalry among its competitors hence promoting respect in the search industry (Wheelen and Hunger 2006, p. 39). In addition, google.cn should make sure that they come up with strategies aimed at cautioning their business against threats from new entrants in the Chinese market. Finally, google.cn should make sure that they understand all substitute products in China and develop strategies to ensure that their customers do not turn to substitutes hence affecting their profitability in the market.