Globalization at Google

Globalization at Google

Introduction

Google's mission to organize, and make all information accessible and useful to its users drives Google's strategies to expand into new markets, gather further information, and make that information available in a beneficial, valuable manner. Google's objectives are to grow, expand into international markets, and continue developing new products such as new advertising technology. Strategically, Google differentiates themselves by focusing on the core product of search services and has benefited from a competitive advantage in "faster response times, and greater economies of scale,” which translates into lower costs. Therefore, Google not only has an advantage in the differentiation arena, but also in cost and speed as well. Google's search-engine business model has propelled it to a dominant role in the industry based on its expertise and differentiation. Google's innovations and diversity keep them in a leading position (Winseck, 2011).

Impact on Globalization

The decision point for Google to deal with the Chinese market proposed a number of decision points. First was the decision of whether or not to enter this new market at all. China is a very population-heavy market with the potential for revenue-generating transactions by selling advertisements to companies in the local area. Profitable markets with the possibility of yielding high returns such as the Chinese market attract new players to enter. Entering the new market would allow for globalization of the company, direct competition with other companies with search engine capabilities already in the area, and possible expansion of services based on needs of consumers in that target market. The alternative to this decision would be to remain out of the Chinese market and allow other internet and search engine providers to dominate the area.

As part of the framework for strategizing business development and analyzing the industry, one of Porter's Five Forces: “Threat of substitute products or services,” is affected by this decision. Not entering the Chinese market would be considered potentially leaving money on the table, or a missed opportunity. By not entering the Chinese market, Google would limit the search engine competitive rivalry, not leverage their competitive advantage through their innovation, and not pose healthy competitive pressures on their rivals with the visibility of their product in the vicinity. Another of Porter's five forces: “Buyer propensity to substitute,” would also be affected by Google's decision to enter the Chinese market. Substitution happens because customers have a propensity to switch to different alternatives based on many things like: price, number of substitute products available, perceived level of product differentiation, quality of the product, and ease of substitution just to name a few. If Google were to come into the Chinese market at a lower price, with more differentiation than the government site and competitor sites, there is a strong possibility that there would be great gains in market share as buyers (advertisers) substitute their current internet advertising contracts with new contracts from Google (Liu, 2012).

Google moves into China

Once the decision was made to enter the Chinese market, the second important decision point was whether to ...