Core Competencies of Google Inc
Google’s revenue in 2002 was $0.4 billion. In 2017, Google’s revenue stood at $109.65 billion. Each of the 15 years from 2002 to 2017 saw higher sales than the previous year. What makes Google great? How did a company that got established just 20 years ago grow into the corporate giant Google has become? Answering these and other “Google-success” questions requires a SWOT analysis as well as an examination of the core competencies of Google. This article looks at the core competencies of Google and the strengths, weaknesses, threats, and opportunities that have made Google the number one search engine in the world.
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Studying and completing a major writing project form a central part of earning a degree in grad school. The workload can be exacting, but some students can still find a bit of time to go out and interact with others. Larry Page and Sergey Brin, the founders of Google, were such students at Stanford University.
Coincidentally, these two grad school students had a lot of interest in the internet and how it worked. Each found the idea of being able to extract more meaning and order from the tons of data that the web carried intriguing. Unlike so many people who keep dreaming, Brian and Page decided to do something about their idea.
A New Type of Search Technology
Working from Page’s dorm room, the two enthusiastic students started to design BackRub, a new type of online search technology. Then, most search engines ranked websites depending on how often different search phrases appeared on them. As a result, sites that offered keyword-stuffed content ranked higher in the search results. Brin and Page thought the way the search engines of the day returned search results needed improvement. They got down to work.
New Way to Rank Websites
Brin and Page figured out that sites which had more backlinks were likely more valuable than those that had few or no backlinks. That is when this determined duo decided that making the number of backlinks websites had a part of the search function was a good idea. And it was, judging by the billions of people around the world who prefer using Google over the other search engines.
Setting Up Shop in Menlo Park
One of the toughest challenges founders face is raising start-up cash. Entrepreneurs who cannot convince investors to fork over some money are highly unlikely to turn their dream into reality. It does not matter how viable the idea is.
Luckily, Brin and Page managed to convince the first bunch of capital owners in mid-1998 that their idea made sense. Andy Bechtolsheim, one of the co-founders of Sun Microsystems, Inc., was one of the early investors. In the end, these eager treps were able to raise $1 million from family, friends, and investors.
The funds enabled them to set up shop in Menlopark, California. They named their shop Google. Did you know that the name Google was a misspelling of the actual name they had in mind? Their first name was Googol. Googol is a mathematical term for 1 followed by 100 zeros. Remember: a trillion is 1 followed by 12 zeros! Maybe they chose that name as a symbol of the vast opportunities and profits they envisioned.
In 1999, Google successfully raised $25 billion from venture capitalists. Investors are more likely to entrust more of their money to entrepreneurs if they can demonstrate they can handle it right. At that time, Google processed about 500,000 search queries daily.
Yahoo Became a Paying Customer and Things Exploded for Google
Most of the time, a competitor is someone a business wants out of the way. Many treps see competitors as obstacles to their success. However, a competitor can be a blessing in disguise as Yahoo was for Google. Google became the client search engine for Yahoo, a worthy competitor. However, Yahoo stopped doing business with Google in 2004.
Then, Google processed 200 million searches daily. Contrary to what one would have expected, business did not slow down with the exit of Yahoo. In 2011, Things had exploded for Google. The company then processed about 3 billion searches each day. The tech company had become so popular that the name “google” entered the Lexicon as a verb. Today, everyone knows what someone who says “I will google it” means.
In a Nutshell
Sergey Brin and Larry Page founded Google in 1998. Google is a subsidiary of a holding company called Alphabet Inc. The two young entrepreneurs met at Stanford as graduate students. Brin and Page needed to change the way people accessed information from the web. The world needed a better search engine, and these two treps decided to build it.
The headquarters of Google, also known as the Googolplex, is in Mountain View, California. Google processes more than 70 percent of all online search queries. But the company offers more than online search services. The global technology firm provides more than 50 different products and internet services.
Email services, advertising, web search, and mobile phone operating systems are some of the services Google offers. Advertising nets Google nearly all of the revenue it earns.
After acquiring Motorola in 2012, Google started selling hardware such as mobile phones. With its vast product portfolio and a strong global presence, Google competes with the three largest players in the tech playground: Apple, IBM, and Microsoft.
Did you know Google’s founders almost sold the company early on as they felt it interfered with their academics? Do you think Google would have become the tech behemoth it is had they sold the business?
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What are the Core Competencies of Google?
What are the core competencies? The term “Core competencies” refers to areas of high proficiency in a company. It is what sets a business apart from its competitors. Competitors often find themselves unable to copy the core competencies of a company. Core competencies are the things a company or individual does supremely well; the one thing they can do better than anyone else. Let us keep that in mind and now ask: what are the core competencies of Google? What does Google do better than any other company?
Google is everywhere. You and nearly everyone you know likely use the company’s products or services. What makes Google stand out considering that competition in the tech marketplace has grown fiercer than ever? Let us examine some of the things Google does better than any other technology company out here:
Google is the Best Search Engine in the World
Yahoo, Bing and the rest of the search engines compete against Google, but Google has remained dominant for years. When an internet user wants to get specific information, they usually google it. A few people might use Yahoo (now called Oath), Microsoft Sites (Bing), or Ask Network, but no one ever says “I will yahoo it or I will bing it.”
When a user types a keyword in their browser, Google returns the most helpful data it can get on the web. Google keeps introducing updates based on complex algorithms, ensuring that only the most useful results stay at the top.
Perhaps that is why Google dominated the U.S. mobile search market in July 2018. The company had a market share of 93 percent. Google processed 63.2 percent of all search queries in the same period. Bing was the closest rival, handling 24.2 percent of all search queries. Overall, Google provides a much better online search experience than its competitors. No wonder Google has become the preferred search engine.
When in a new town and you want to find the nearest Macdonald or Taco Bell, you don’t need to ask strangers. Ask Google Maps. Google Maps is a web mapping service Google created to serve its customers better. Google Maps offers the most up-to-date data for locations, directions, and public transportation. Google Maps even help commuters avoid traffic. Apple Maps is an alternative, but frankly, Apple Maps still has some work to do before it can topple Google Maps.
Google owns YouTube. Thanks to YouTube, pretty much anyone can upload videos or watch videos online anytime. No other services come close to YouTube when it comes to uploading videos on the internet. Videos promote search engine optimization, and that dramatically raises the value or usefulness of YouTube.
Paid search is increasingly becoming a critical part of the marketing strategy for many businesses. Google helps companies display ads online, boosting their visibility and discoverability. But Yahoo, Bing, AOL, and Ask Network are also doing that. So, what makes Google stand out?
When a customer pays Google for online advertisement services, their ads appear on Google’s search network as well as websites connected to that network. Google helps businesses sell products and services through search queries performed by real web users. Google controls the largest share of the search market, and that means a lot. Through Google AdWords and AdSense, Google places its customers’ ads in front of millions of web users. Other search engines do that, too. However, it seems that they have a long way to go before they can dislodge Google from its market dominance.
In the last quarter of 2016, 82 percent of all smartphones sold ran on Android. Only 17.9 percent ran on Apple’s iOS. With the most popular mobile phone system in the world, it is easy to see why Google dominates the mobile search market. That is a significant competitive advantage considering that 50.3 percent of the global website traffic happened on mobile phones. In 2018, mobile search grew to 52.2 percent. If the trend continues, Google’s mobile search dominance will keep growing.
Chrome: the Most Popular Browser
Chrome for Android and Chrome 68.0, both owned by Google, are the most widely used browsers globally. According to Statista, 30.14 percent of all page views happened on Chrome for Android. Chrome 68.0 supported 18.79 percent of the total page views while Safari iPhone was a distant third in the race with only 9.75 percent of the page views occurring there.
Google Swot Analysis
Let’s now analyze Google’s strengths, weaknesses, threats, and opportunities. This analysis reveals how Google used its competitive advantages to become the dominant player in the online advertising industry.
Google dominates the web, video content sharing, online advertising, browser usage, and mobile Operating System markets. Online advertising is Google’s largest source of revenue. In 2017, for example, 87 percent of Google’s revenue was directly attributable to advertising. Google dominates the digital advertising market through its globally recognizable and accepted channels such as YouTube, AdWords, AdSense, and Android OS.
Google is also the most popular search engine worldwide, and that gives the tech giant significant competitive advantages. Some of the world’s biggest smartphone vendors including Huawei, Samsung, OPPO, Lenovo, LG, and Samsung have Android OS as their preferred mobile OS. Android is leading mobile Operating System globally.
Through YouTube, Chrome, Android OS, Google Search, and Google Analytics, Google obtains an enormous amount of data about its customers. The company continually gathers users’ information, buying habits, and other related information. All this information does give Google a critical competitive advantage. That enables Google to offer its customers the products, services, and ads that serve their needs best. As a result, Google has become a strong, popular, and easily recognizable brand worldwide.
Google keeps acquiring new businesses. On average, the tech giant completes 1–2 acquisitions each month, and that is one of the highest rates globally. Google continually grows stronger, becoming a tougher competitor to its competitors.
Finally, Google attracts and retains some of the best tech brains in the world. Some of their people come from top-rated schools such as Stanford and MIT. Each year, Google receives more than two million job applications. The hiring process in Google is different than most other companies. At this company, a hiring committee that includes potential bosses and potential colleagues picks the best talent from among the applicants. Unlike in other places where one person may decide who gets hired, Google relies on the input of a committee. That does bring a lot of objectivity into the decision-making process.
Google depends heavily on its online advertisement income. Since the demand for ads keeps fluctuating, the company remains vulnerable to some extent. Facebook does seem to be nibbling away at Google’s dominance in the online advertisement market. In 2014, for example, Facebook’s ads prices increased by up to 285 percent even as ad viewing fell 62 percent. That same year, Facebook earned three times the value of mobile display ad revenue Google generated. Facebook-connected apps should worry Google since the more time users spend on Facebook, the less time they might spend doing searches on Google.
Lastly, Google needs to contain its high employee turnover rate. Google is among the four largest U.S. companies with the highest employee turnover rate. Competitors such as Facebook and others are doing a much better job in this regard.
There are many possibilities when it comes to the long-term growth of Growth. The company stays alert and is always ready to take advantage of different opportunities as it identifies them. In 2015, the company developed Android M (6.0). Google decided to use Chrome overlays together with Android M (6) to replace app-based browsers. The company used the same technique to add context-based searches of apps. As a result, Google can now mine data from different types of apps including Facebook-connected apps.
Driverless cars, artificial intelligence, medical equipment, medicine, smart-home, and robotics projects are other areas that offer Google tremendous opportunities. No one knows for sure whether Google will find success with any of these efforts, though. However, there is always a chance that one of these gambles might pay off, thrusting Google to even greater market dominance.
The music industry is another excellent opportunity for Google. Music Streaming through Google Play Music could become an important revenue stream for Google. The company could get income from subscriptions and ads just like it does from YouTube ads.
Google could also expand into social networking and shopping in the future, giving Facebook a run for its money. However, that is not something Google seems to be doing currently.
The enterprise market is another area Google can leverage into huge profits. Microsoft and Apple are the biggest players in this business. Google can lure some small and medium-sized customers away from these two dominant players. Google’s Chrome for Work, Android for Work, and Google Drive are efforts that might give Google some traction in the enterprise market. One hopes that Google will continue to spot and execute opportunities just like its founders did way back in 1998.
Amazon, Apple, and Facebook stand in the way of Google’s plans and strategies. Facebook enjoys the loyalty of more than 1 billion users. For that reason, anyone seeking to advertise on social media has Facebook as their first option.
Also, a lot of people these days directly visit Amazom.com to buy products and services. Increased product searches on Amazon means decreased searches on Google. Amazon is, in a sense, the new Google for product search. Amazon saw 55 percent of online product searches in 2016. Google and the other search engines processed only 28 percent of online product-related queries. However, Google and the other search engines handled 36 percent of product searches in 2017 while Amazon did 49 percent. Amazon is certainly a threat, but things could change in Google’s favor in the future.
Apple seems determined to get Google out of its ecosystem. In 2014, Apple made Bing the default search engine for Spotlight and Siri, edging out Google. As if that was not bad enough, Apple also decided to block Google maps on Carplay.
Also, Apple’s iOS 9 is another threat Google faces. The new OS for mobile phones came with content-blocking extensions. Ads can be annoying, and when web users get an opportunity to block them, they will. That is what Apple’s iOS 9 helps users do, and that poses a threat to Google’s advertisement revenues. Aside from Apple, other companies are also offering ad-blocking apps, and that does throw a spanner in the works for Google.
Will Google overcome its weaknesses, surmount the ever-growing threats, and retain its market dominance? Time will tell.
Google continues to take advantage of its core competencies, strengths, and opportunities. As a result, the company has managed to maintain a clear lead in the digital advertising and web search markets. However, Google needs to address various weaknesses such as overreliance on advertisement revenue and its employee worrying turnover rate. Most importantly, Google needs to discover ways to shore up its dominance against its key competitors including Apple, Facebook, and Amazon. Overall, Google is doing well, and the future does look bright.