Analysis of Google's External Environment

Analysis of Google's External Environment

Introduction

The company Google has been chosen as it is one of the largest companies in the world that highly has its implications on the users as well as the non-users across the globe. Google is a company whose main product is the search engine of the same name. Google appeared in March 1996 as a research project of Larry Page and Sergey Brin, Ph.D., who was a student at Stanford and was working on the Stanford Digital Library Project (SDLP). SDLP was the aim of "Developing Advanced Technologies for a single, integrated and universal digital library." The implications clearly mean the affect it asserts on the external environment. Therefore, the following essay is going to analyze the Porter's Five Forces Model and the Google's external environment in context to Porter's Model. (www.landley.net)

Discussion

Porter's Five Forces Model

The model of Porter's five competitive forces is a tool for strategic analysis of the competitive environment of a company. Michael Porter has identified five types of forces that can be exercised in a more or less intense in the industry. The model was developed by the economist and professor Michael Porter of Harvard Business School in 1989. The five forces of Porter are Bargaining Power of Buyers or Clients, Bargaining Power of Suppliers or Vendors, Threat of new entrants, Threat of substitutes and the Rivalry among competitors.

Google's External Environment Analysis

The internal dynamics of the company and the speed and how it moves the environment, must be treated as a whole at the time of analysis of which will emerge the strategies to attain competitiveness in a market increasingly convulsed. Using the Porter's Five Forces Model, the essay is evaluating the external environment of Google. The five elements that are explained in the model are the competitors, new entrants, customers, suppliers and the substitutes. (www.cozy-digital.co.uk)

The entry of new firms to compete in the industry will depend on entry barriers and the reaction from existing firms in the industry. The new entrants are the newly established businesses who have started their operations in the market. The impact of Google on these new entrants is high as they really need to come up with effective and competitive strategies for their businesses to run their operations in competition with Google. Thus, the barriers for new entrants in the internet industry are high. The competitors who are already working in the IT and internet industry have developed a strong serving network for its users across the globe that has given new firms a difficult time to get in the industry. He needs to come up with more improved strategies that can attract the users towards them. Considering the fact that when Google was established in 1998, it was recognized that Yahoo, Excite and AltaVista had dominated the search market and Google was in chase to all. Therefore, the threat of the new entrants to the internet industry in competition to Google is relatively less.

Google's competitors are becoming more powerful though the impact of ...