The major product that Google Inc. runs is their extremely successful search engine, www.google.com. By the year 2009, Google had grown considerably and had expanded to include many more services that were available on the web (Johnson, Scholes, & Whittington, 2008)
Some of these services are Google Chrome, a lightning speed web browser, Google Images for searching for images on the web, Google News which aggregates news from thousands of sources worldwide, Google Docs which allows users to create new documents and share their other documents online, Google Translate which helps translate web pages to different languages, Google Blog Search which searches within millions of blogs around the world, Google Scholar which helps in the search for scholarly articles, Google Adwords which helps advertisers place advertisements on the web and Google Adsense which monetizes websites by publishers serving advertisements on the Google Adwords network. These are but a few of the various services offered by Google.
Google is the most used search engine all over the world, and it is available in multiple languages. Google even has local search engines using public domains like google.co.uk for the United Kingdom, google.com.au for Australia, google.it for Italy.
Company's mission and vision statement analysis
Google's mission is "to organize the world's information and make it universally accessible and useful." Vise, 2006.
This mission is a uncomplicated and clear statement of what Google wants to achieve through its activities and it is reflected in the activities of Google and their financial performance.
Google does not have a clear vision statement but they have ten philosophies from which a vision statement can be generated. These philosophies are focused on the user, dealing with one thing at a time, being fast and timely in delivery of products, web democracy, being mobile, making money in the right channel, getting more and more information in their index, making information available across all countries, seriousness without being official, and doing the best at all tasks. From these philosophies, we can see that Google has a vision to make the world an open place where everyone benefits. Even though the company is meant to make money, money should be made through the appropriate channels and the company strives to provide the best to their consumers. It can also be seen that the company does not necessarily believe on what is on the outside in terms of wearing a suit or being official.
Google is known around the world to be a global leader in technology and is involved in many activities to make the web as open as possible. Google does not charge end users for most of their services by they have a freemium model for some services such as Gmail where they provide some storage free but charge for extra storage Cowan, 2009.
Google is investing predominantly in new products and services. As reported in their 2010 annual report, they have invested substantially in mobile, enterprise and display which the company views to be their future. Mobile phones and other devices are increasingly growing in popularity and this is part of the reason why the company is shifting in this direction Google Inc., 2010.
This is in line with the company's mission to make information available and accessible to all.
Organization's strategic goals
Google focusses more on their long-term goals rather than the short-term ones Kirby, 2009.
Google Inc. has many goals which the company strives to achieve. Each of their products has a specific goal. However, there are the unified goals which the company has. One of the principal goals is that of making the web open to all. The 2010 annual report states that the company was founded to connect the general public with their much needed information Google Inc., 2010.
This goal is what drove the company to what it currently is. Google is built around the premise of an open source of information. This is what the Google brand is best known for all over the world. This goal is in tandem with the organization's vision and mission since both the company vision and mission state that the company wants to make information accessible and available to people all over the world.
One of Google's specific products, Google Adwords which is the company's advertising program which is auction-based has a goal of delivering ads which are related to the content web surfers are viewing or searching for. This is the main income generating activity of Google Inc. As per Google's vision, they would like to generate income through legit activities that are not of any evil nature. This is what Google has done with their Adwords program. Adwords advertisers pay on a cost-per-click basis whereby the advertiser only pays when a customer clicks on the ad. This means that advertisers only pay what is essential for their business which are clicks leading to the ad's target page. It is not always that an advert is seen and it leads to a particular behavior.
The company's financial performance
From the 2010 annual report filed with the SEC, Google reported revenue of $29.321 billion which represents a 23.9% increase from the $23.651 billion reported for the fiscal year ended December 31, 2009. When looking at the trend in the company's revenue for the past 5 years, the company has had increasing revenue by at least 20% every year. The company's earnings before tax has also been increasing year by year. In the year ended 31st December 2010, the company reported income before taxes of 10.796 billion and the income after taxes was about $8.505 billion representing a 30% increase from the $6.52 billion reported for the year ended December 2009 Google Inc., 2010()
About 96% of Google's revenue comes from their AdWords platform. In the years 2008 and 2009, the company's revenue from AdWords was 97%. This 1% reduction for the period ended December 31st 2010 can be attributed to the company gaining other products that increase revenue for the company such as their third party ad agencies such as AdMob and DoubleClick. The company also licenses their enterprise products to earn additional income. Another product was also introduced which is the Google ads for television. These also helped to increase the revenue of Google from other activities other than their AdWords program Google Inc., 2010.
However, as can be seen, in as much as Google has introduced new products and services to help increase their revenue, the company's earnings significantly comes from their AdWords program since despite adding these new products, the drop in percentage revenue was just 1 per cent.
The company's revenue is affected by many factors. One is the seasonal variation in usage of the internet. For example during the Black Friday/Cyber Monday shopping days, there can be seen a whopping usage of the internet as millions of people scour the web for advertising coupons and crazy sales promotions. During this period, as Google reports, they receive an enormous amount of revenue as advertisers place adverts on the Google AdWords platforms and these adverts receive many clicks as shoppers want to see these sales promos. Generally in the summer months, internet usage goes slow thus decreasing the company's revenue. Such changes in trends cause huge fluctuations in the quarterly reports of Google.
Since Google is a global company that charges for their products in U.S. dollars, the company experiences problems caused by the fluctuation of currency exchange rates. For example, in 2010, the dollar strengthened against many currencies, especially the Euro, and this negatively impacted the earnings of the company for the year 2010 as compared to the results for the year 2009. The company thus developed a program to manage the risk of foreign exchange fluctuations. However, the program will just help to mitigate the risk and not to eliminate it altogether.
Competitive and marketing analysis
The table below shows a SWOT analysis of Google Inc.
Helpful for achieving the objectives
Harmful to achieving the objectives
Google is the most popular search engine around the world
Very little marketing is required since Google is a well-known brand all over the world
Google products all have a simple user-friendly interface which even novice end users feel comfortable using.
Google has low costs of operation since they use cost effective equipment which are low cost but efficient in running their system.
Google does not favor any advertisers in their advertising products.
Google's products are available in many countries and are localized to the content of that country or region.
Google has a low cost per click rate which encourages advertisers.
Contextual marketing is seen by some marketers to have less influence than general marketing.
Google has a complex business model which looks confusing to some business analysts.
Due to the large amount of data that Google handles, they are less accurate in their search results. Only about 50% of their web searches are answered with accuracy.
Google does not provide attractive content like that provided by…