'Google – PESTEL & Porter’s Five Forces Analysis Essay\r'

'1.0 Introduction\r\nGoogle Inc, a b on the whole-shaped engine room social club, founded in 1998 by Larry Page and Sergey Brin, is the roughly popular re look to engine in the world. Google provides many free serve and mathematical outputs much(prenominal) as Google calculate, YouTube, Google Maps, and has alter how masses engage and sh ar nurture.\r\nGoogle’s furrow spans from advertize, data analytics, operating systems to technologically advanced contrivances such as Google Glass, Driver little cars, Solar-powered dr whizzs, and was recently named â€Å"The World’s closely invaluable Brand” cod to consumers perception of Google macrocosm a forward-looking order focused on innovation (Bloomberg, 2014).\r\nAs of 2013, Google has 43,862 employees working in more than 70 offices in oer 40 countries somewhat the world with their headquarters located in plenteousness View, California, USA. (2014). For the purpose of this study, I allow for be basing my compend of Google in capital of capital of capital of capital of Singapore, its southeasterly Asia headquarters which opened in 2007.\r\nThe following sections give analyse the various factors that volition influence Google’s operations in Singapore, and dissolve with recommendations of how Google should further improve to boost its competitive edge.\r\n2.0 PESTEL abstract\r\n2.1 Political\r\nThough little political restrictions strike Google’s operations due to the nature of its argumentation, political science stability is a major aspect in Google’s st appraisegic planning. Singapore had been rated Asia’s close politically stable country (Berdzenadze, 2013), and Asia’s nigh competitive economy in the Global fighting Report by the World scotch fabrication (2013).\r\nWhen the foodstuff of operations has political and economic stability, businesses leave thrive and in turn advertise more, hence increasing business o pportunities for Google.\r\n2.2 Economic\r\nGoogle was hailed as universe â€Å"Recession-Proof” when they continued to post solid earnings by means of the economic quite a littleturn (Quittner, 2008). It is well positioned to weather the d deliverturn, as its services argon free to consumers, and advertisers substituted traditional media publicise with online advertizement to cut costs.\r\nRegardless, Singapore is tolerantly adjudge as having one of the best business environments in the world. Ranked as the world’s easiest say to do business (The World Bank Group, 2014) and metropolis with the best investment potential (as cited by Economic culture Board, 2014), Singapore with its sound monetary and fiscal policy attracts many investors.\r\nThe more investment dollars de providet into a business, the more they ar go outing to choke on advertisements, which increases business opportunities for Google.\r\n2.3 Social\r\nIn Singapore where in that respect is high internet penetration rate of 87% and peregrine penetration rate of 156% (IDA, 2014), consumers well-situated with technology often see the internet as the firstly source of product re appear onward devising their final purchase, making Google a rattling central part of the process. To increase the number of substance abusers accessing Google’s services from their mobile device, Google released its own Android mobile operating system which now holds 55.8% of the mobile device market share (comScore, 2014). It is consequently increasingly important for marketers to influence consumer’s final purchasing decisions by advertising in this space.\r\nHowever, Google’s infrastructure created to create and in the flesh(predicate)ise each user’s search experience by storing their personal breeding has been real with mixed reactions as some find Google’s cut-rate barter of such information a rapine of their privateness. As heap’s att itude and name towards protecting their private data change, Google’s business may face a threat.\r\n2.4 Technological\r\nbeyond a search engine, Google constantly innovates and develop its gigantic range of free products aimed at strengthening user engagement.\r\nTechnology rapidly advances, and Google actively takes measures to ensure they do not fall behind. According to Bloomberg data, Google has acquired 127 companies in the one age(prenominal) three years (as cited by Farzad, 2014). Besides bargain for companies, such as Waze, a GPS navigation software, and Admeld, an advertising optimisation platform, in a smart defensive play to acquire companies that poses a threat to its business, Google has been annoyting a wide range of technological companies from android robots to Airborne wind turbines to Home automation devices.\r\nIn a bid to strengthen its business, Google is increasingly move into developing hardware technology that has a concrete presence in cons umer’s homes and offices.\r\n2.5 Environmental\r\nIt is estimated that Google runs over a million servers in data spunks worldwide, with its first Southeast Asia data digest in Singapore operating since 2013, and consumes a huge amount of electricity. each time someone makes a search or sends an email, they contri notwithstandinges to the electricity bill at Google’s data centre (Tan, 2014).\r\nHowever, Google argues that they drive made the world a greener place considering the electricity consumption for a search in lieu of a drive down to the library. Above all, unlike other companies, Google fabricates most of their own data centres down to the zip-saving chips it uses, and custom-designs its servers for efficient energy use (Glanz, 2011). Its facility in Singapore uses recycled water for its modify system.\r\nAlthough Google is a high carbon footprint business, it has follow a proactive strategy to hold itself up as a 3ly responsible company by making its facilities environmentally-friendly through generating its own renewable energy from solar panels, wind farms and purchasing carbon offsets by funding green efforts.\r\n2.6 Legal\r\nFrom the perspective of fairness and regulation, the internet is inherently transgressive and toilsome to govern since it is global, and information weed be instantly transferred at anytime, anywhere. Google’s products collects a lot of personally identifiable information on its users †DoubleClick cookies tracking online footprints, Google wallet storing name, credit witticism details, and thus how this information is compiled, used or stored are a natural concern.\r\nGoogle’s data centre in Singapore serves users well-nigh the region, and Singapore’s business-friendly set out with the privacy law on multinational transfers of data that does not restricts transfers to specific countries on their okay list, but kinda puts the onus on the company to put in place measures to ensure personal data is transferred to locations with comparable standard of safeguard, makes compliance issues less complicated than that of Europe’s (Bratby, 2013).\r\nIn general, Singapore is a relatively late adopter of privacy laws (The Register, 2014), and is largely reactive rather than transformative. As such, reasoned issues that may arise in Singapore are likely to be those that Google already has measures or policies in place.\r\n3.0 Porter’s v Forces Analysis\r\n3.1 little terror of New Entrants\r\nAlthough the internet has traditionally been viewed as a â€Å"low barrier to entry” marketplace, the barriers to entry in the internet search market are high, as it would take a giant step in innovation, and a mammoth starting capital to build a network infrastructure that could compete with all of Google’s services and products. The scale of Google’s businesses has develop a significant barrier to entry.\r\nNevertheless, companies f ocusing solo on developing a single product or service that Google offers could potentially usurp Google’s dominance in that area, as seen with the Rubicon Project, an advertising start-up which surpassed Google’s Ad Network reach by over 6 million unique visitors (Thomas, 2012).\r\n3.2 brat of Substitution\r\nSome of Google’s products and services could potentially be substituted, such as users choosing GPS instead of Google Maps, but Google’s primary business is their online search engine, which is demanding to substitute.\r\nEveryday, an average of 5.9 billion Google searches are made (Statistic Brain, 2014). Although in that respect are alternative sources of information such as newspapers, books, television, or radio, the internet is the preferred source for people to retrieve information as it provides information on demand. As of now, the threat of substitution is low as there are no foreseeable substitutions for online search.\r\n3.3 supplier Power\r\nGoogle owns its search platform and advertising services tool, thus it has very limited exposure to suppliers. payable to the advertising system used to generate tax tax, twain the advertiser and search engine user are Google’s customers.\r\nHowever, websites that have given inventory to Google for sale can be considered their supplier. As websites frequently have their inventory listed across multiple ad exchanges, Google will have to return both quantity of gross revenue and quality of pricing of their buys to maintain the impressions given to them for sale by web publishers. So long as Google maintains strong market dominance, supplier bargaining will retain low.\r\n3.4 Buyer Power\r\nAlthough internet users are free to switch to alternative platforms, most of Google’s products and services that they use are at no cost to them.\r\nWhereas in the case where the purchaser is the advertiser, buyer power is low as there are limited vendors they could spe nd with. A key suffer of Google’s ad buying platform, DoubleClick, is that advertisers can buy ads on 300 different websites with a some clicks instead of making 300 calls or meetings to get the ads on all the websites.\r\nThe scale of modern online media buying is staggering as Google provides access to millions of possible sites for advertising. Although Google’s products are not unique, they are at scale, and can make competition difficult for start-up and smaller competitors.\r\n3.5 intentness Rivalry\r\nGoogle is known for being the best search engine with high relevance within its searches, thus its position as the market leader in the search market with about 80% market share (Nguyen,2012). Though competitors have caught up, and substitution of Google search in favour of bumpkin or Microsoft’s Bing is certainly possible, ‘Googling’ has now been ingrained in people’s mind, and is largely a habit instead of being driven by significan t product differentiation.\r\nWhen Google introduced the Android operating system, they have placed themselves in direct competition with Apple. Though Android phones presently has larger market share than iOS phones, Apple will not easily give in in the battle of mobile operating systems.\r\nGoogle’s strategy is all about scale and interoperability. With advertising making up over 90% of its total revenue (Google Inc, 2014), it is critical for Google to protect its space, thus its entrance into the browser and mobile operating system market. When one owns the platform, one has the stage. Google tries to own as much of the overall ecosystem as they can so as to lock in its users and keep out competitors. In doing so, it does not look at considerable advertising expense to stay and remain on top.\r\n4.0 Conclusion & amp; Recommendations\r\nIn toll of PESTEL analysis, I recommend that Google venture into new markets around the region. Singapore is a mature market, thus oppo rtunities to enhance further are rather limited due to its market saturation and small community. In essence, it is difficult to justify large advertising spend when it can never attract large reciprocal gross sales as it simply does not have the population to support it.\r\nHowever, expansion into emerging markets in Southeast Asia such as Indonesia or Philippines will facilitate its revenue growth. To illustrate, Indonesia has internet penetration at 24% (Statista, 2014), which translate to 60 million users. That is 12 clock Singapore’s population. The propensity of growth there is phenomenon. In terms of Porter’s Five Forces analysis, I recommend that Google diversify into other ventures that helps generates income as it is not healthy for the company to rely closely entirely on one source of revenue. With its wide range of free products and services, Google could select a fewer of its products to further develop as alternative revenue sources such as its VOI P business, or licensing fees for its products.\r\nGoogle will to a fault need to ensure that it maintains its momentum in the explore and development of its search engine to ensure that it is frontward of its competitor. With Microsoft and Yahoo search’s merger, the convergence of technologies will improve their search engines, and possibly catapult Yahoo’s more successful products such as Yahoo Finance and Flickr.\r\nAs long as Google’s continue to innovate and stay in advance of its game, they will remain the market leader in the industry.\r\n5.0 References\r\nBloomberg. (2014, May 21). Google Overtakes Apple as Most Valuable Brand [Video file]. Retrieved 13 June 2014, from http://www.bloomberg.com/video/google-overtakes-apple-as-most-valuable-brand-PgHrIgIsQMuzLZA4CxRJSg.html\r\nBratby, R. (2013) Singapore takes business-friendly approach in data protection guidelines. Retrieved June 24, 2014, from http://www.zdnet.com/sg/singapore-takes-business-friendly -approach-in-data-protection-guidelines-7000021091/\r\ncomScore. (2014). comScore Device Essentials †Singapore & Hong Kong 2013. Retrieved June 13, 2014, from https://www.comscore.com/ gist/download/23711/1282705/version/1/file/ singapore-vs-hongkong-mobile-usage.pdf\r\nBerdzenadze, I. (2013) Singapore: Asia’s Leading stage business Hub. CNN. Retrieved June 24, 2014, from http://ireport.cnn.com/docs/DOC-953461\r\nEconomic Development Board. (2014). About Singapore †Facts and Rankings. Retrieved June 13, 2014, from http://www.edb.gov.sg/content/edb/en/why-singapore/about-singapore/facts-and-rankings/rankings.html\r\nFarzad, R. (2014). Google at $400 Billion: A New No. 2 in foodstuff Cap. Business Week. Retrieved June 22, 2014, from http://www.businessweek.com/articles/2014-02-12/google-at-400-billion-a-new-no-dot-2-in-market-cap\r\nGlanz, J. (2011, Sep 9). Google Details, and Defends, Its Use of Electricity. The New York Times, pp. B1. Retrieved June 23, 2014, from\r\nhttp://www.nytimes.com/2011/09/09/technology/google-details-and-defends-its-use-of-electricity.html\r\nGoogle Inc. (2014) Google Annual Report 2013. (pp. 26). Retrieved June 13, 2014, from http://investor.google.com/proxy.html\r\nGoogle Inc. (2014) Company †Google locations. Retrieved June 22, 2014, from http://www.google.com/about/company/facts/locations/\r\nGoogle Inc. (2014) Investor Relations †2014 Financial Tables. Retrieved June 22, 2014, from https://investor.google.com/financial/tables.html\r\nInfo-communications Development dictum of Singapore. (2012). Google breaks ground for Singapore data centre. Retrieved June 13, 2014, from http://www.ida.gov.sg/blog/insg/in-the-news/google-breaks-ground-for-singapore-data-centre/\r\nInfo-communications Development Authority of Singapore. (2014). Infocomm Landscape †Facts and Figures. Retrieved June 22, 2014, from http://www.ida.gov.sg/Infocomm-Landscape/Facts-and-Figures\r\nQuittner. J. (2008, 16 Oct). Behold! The Recession-Proof Google!. Time. Retrieved June 22, 2014, from http://content.time.com/time/business/article/0,8599,1851286,00.html\r\nStatisticbrain. (2014). Google Annual Search Statistics | Statistic Brain. Retrieved June 16, 2014, from http://www.statisticbrain.com/google-searches/\r\nTan, H. (2011, 21 Dec). Rainfall to cool Google’s data centre here. The Straits Times, pp. 21. Retrieved June 23, 2014 from http://newslink.asiaone.com/user/OrderArticleRequest.action? documentId=nica_ST_2011_22596292&year=2011&month=12&date=21\r\nThe Register. (2014). Singapore lures big biz with mega data protection regime. Retrieved 24 June 2014, from\r\n'