Effective Global Business: Analysis of Google Case

Introduction

In today’s ever-expanding World Wide Web business, Google takes first place. Google first started its business as a search engine, which rapidly grew into other sectors in the economy. According to the article "Top 10 Search Engines in the World," Google is classified as the number one search engine globally, and according to the latest netmarketshare report done in November 2018, 73% of internet searches were powered by Google compared to Bing, which was much lower at 7.91% (NetMarketShare, 2018). Google’s search engine has become much more than just a web-based business but has branched out to an array of products, advertising, and marketing other products such as software and hardware products. Although Google started as an online search engine, its marketing mix has made it into a global success.

Effective Global Business: Analysis of Google Case

Google was founded in 1998, and due to the company’s business strategies, it has grown worldwide. In the article "Google's Marketing Mix (4Ps)," Greenspan states, “According to Google’s marketing mix, it involves a diverse array of products. The company has grown and diversified. These products are generally grouped into the following product lines: Web-based products, Operating systems, Desktop apps, Mobile apps, Hardware products, and Services” (Greenspan, 2018). It is evident that Google implements its marketing concept by using “carefully designed strategies.” Greenspan adds, “the value-based pricing strategy determines prices based on the customer’s perceived value of the product” (Greenspan, 2018). Most of the products marketed are available around the world on the internet. Greenspan explains that “the company uses product development as a major intensive growth strategy,” signifying that their strategy encompasses consumers’ needs, sales increase, maximizing profit and thus beating any competition (Greenspan, 2018).

Although Google is a global success, the company can still be impacted by the external environment; the stability of its internal structure can be influenced by external factors. In order for Google to continue being a global success, it is imperative that their strategic team analyze both internal and external elements, specifically external factors. When analyzing the external factors, it should be taken into account the political, economic, social, technological, and legal environment.

Political Environment

The political environment can influence business organizations and also add risk factors which can lead to major losses. As changes in the political system can influence business strategies, a particular local market can be affected. According to "Google Internal Environment and PESTEL Analysis," it states, “As for the political environment, Google has few political restrictions. Firstly, one of the political problems that it faces is with the Department of Justice, due to the fact that there is plenty of inappropriate content and classified documents. Secondly, it has problems with the Chinese Government, because of censorship of searching results” (PESTEL Analysis, 2018). Google tries not to have problems with censorship globally, because of its cooperation with the U.S Government and the protection of personal privacy. For this reason, it has created privacy terms on its homepage, where users can find information. Government policies, political stability and instability, taxes, trade restrictions, and consumer protection laws among others are external factors that are of prime importance for Google as a corporation to observe in order to continue being a global success.

Economic Environment

The economic environment of a business can be divided into two, the microeconomic, which can be translated to the political economy, and the macroeconomic regarding the national economy. Macroeconomic factors are expansive economic factors that affect all partakers in an economy, which can include inflation, unemployment, tax, and interest rates. On the other hand, microeconomic factors comprise the economic decisions that businesses and individuals make. It focuses on individual situations, as opposed to macroeconomics, which looks at the big picture.

The essay, "Google Internal Environment and PESTEL Analysis," states, “Furthermore, one of the countries that have been hit the most is the United States, where Google is located. However, this crisis has not affected Google, because it does not sell direct products, but services which are funded by advertisements. Also, the free provision of Google leads to an increase in its popularity, which in turn maintains its good relations with advertising firms. Finally, its excellent knowledge of the market allows Google to be able to respond to any kind of crisis” (PESTEL Analysis, 2018). Google, with its strategic team, has built a business where external factors can work in their favor, thus still be a nationwide business that has and still is the leading company for many web-based searches and content marketing.

Social Environment

The social environment of a business can be encompassed by a society’s beliefs, practices, and even customs. It is necessary for a business to employ and modify their strategies according to its external environment. An example of the effects of the external social environment, according to study.com, “is, for instance, a change in beliefs and values regarding energy conservation and climate change, this can create a reform in consumer preference” (Study.com, 2018). Regarding Google and its social environment, "Google Internal Environment and PESTEL Analysis" explains, “Google’s great advantage is that there are no social restrictions, because its services can be used by everyone despite age, religion, nationality, and living conditions. Another advantage is that it is not a seasonal company, for the reason that its services are always desired. Also, the development of technology and the trend of using Internet through computers and mobile phones have increased in the last years, impacting Google expansion all over the world. Google has no geographical dependence because the technology of the internet is widespread worldwide. Google’s social environment is global, meaning that it is a Multilanguage society” (PESTEL Analysis, 2018).

Technological Environment

There are external factors in technology that can affect a business operation. Changes in technology can create opportunities, risks, and threats to a business. But businesses can be at an advantage by improving their technology products, or creating new products and processes that will inflate their market and net profit. "Google Internal Environment and PESTEL Analysis" adds, “technology is always advancing, so this phenomenon makes Google expand rapidly. For this reason, it has to be updated constantly in order for it to follow its revolution. New technology in computer systems may aid Google’s services to work faster and better, so it has to prevent its opponents from taking this new technological knowledge. Another advantage of technology for Google is that the costs are decreasing, while the quality of the services that it offers is improving and the innovation is strengthened. It also improves the speed of information, the ways of communication and transportation. These reasons help Google to expand and more importantly to survive” (PESTEL Analysis, 2018).

Legal Environment

The legal environment also plays a key role in a business's success. These external factors refer to how the law affects the way a business operates and how customers behave. For example, it may include consumer, discrimination, copyright, health and safety, employment, fraud, import, and export laws among many others. This can affect the operation in which the company handles its inventory and as well interconnects with its consumers. "Google Internal Environment and PESTEL Analysis" relay, “Copyright is an issue that exists in the legal environment because of the ability that third-party persons and companies can copy pictures and steal information from others. As a result, Google has created a page with copyright information about what is legal and what is not” (PESTEL Analysis, 2018).

Impact on the Digital Economy

The digital economy, also referred to as the internet economy, the new economy, or the web economy, has restructured the way many organizations do business. Khan explains, “Digitization is a process of converting the diverse forms of information, such as text, sound, image or voice into a digitalized format. The digitization has a proven impact on the economy and society by reducing unemployment, improving quality of life, and boosting access to knowledge and other public services” (Khan, 2018). Google has positively impacted and influenced economic growth, generating billions of dollars in economic activity through countless businesses and non-profit organizations nationwide. Hendrix states, “Google’s latest Economic Impact report finds the company contributing $165 billion of economic activity for 1.4 million businesses and non-profits in 2015, up from $131 billion in 2014. Ads and search lead to clicks, and some clicks lead to business. The incremental revenue gained has a not insignificant impact on job creation as well” (Hendrix, 2018). It is evident based on the information gathered that Google has produced significant cost savings in various areas of the economy, which has resulted in fast-economic growth for the digital economy.

Conclusion

Concluding all the gathered information, Google has been and still is a global success. Their ability to use “carefully designed strategies” has set forth their nationwide success, which has positively impacted the economy. Based on what is gathered, it is safe to say Google makes its money from selling advertisements on their search pages. These advertisers bid to have their products and services marketed on Google’s search query result pages. Overall, even though many external factors may affect Google’s prosperous business, it is still the number one search engine and a successful business due to its effective global business strategic team.

References

Greenspan, R. (2018). Google's Marketing Mix (4Ps). Retrieved from [Source URL]

NetMarketShare. (2018). Top 10 Search Engines in the World. Retrieved from [Source URL]

PESTEL Analysis. (2018). Google Internal Environment and PESTEL Analysis. Retrieved from [Source URL]

Study.com. (2018). Effects of the External Social Environment. Retrieved from [Source URL]

Khan, A. (2018). The Impact of Digitization on Economy and Society. Retrieved from [Source URL]

Hendrix, M. (2018). Google’s Economic Impact Report. Retrieved from [Source URL]