Industry and Company Strategy Analysis: Google Inc. in US internet service industry
The internet has greatly transformed a ubiquitous application almost in all facets of business and life generally thus the U.S internet service providers industry. This paper is about the analysis of the U.S internet industry and the strategy of Google Inc. which is one of the U.S internet industry. The analysis follows an overview of the market size growth from the past five years to the next five years of the future, the main drivers of the growth, industry cycle stage, concentration level, major competitors, market shares, demand determinants and profitability drivers. The porters five framework analysis can be best used to analyze the U.S internet competiveness. The nature of the competition is embodied on thee following five forces;(1) rivalry among the existing firms(2) the threat of substitute products(3) the supplier bargaining power(4) threat of new entrants(5) the buyer bargaining power.
In the U.S internet industry the aforementioned five forces are favorable for Google Inc. since the similar competitors also earn favorable returns over the invested capital. The five forces are also very fundamental in determining the profitability of industry since they shape the prices that the firm imposes. The entry of new players into the market in the long run limits the gross profit potential of the U.S internet industry since the new players also seek a share of the market and thus pushing down the margins. The market size growth for the U.S internet industry in the past five years was wider and stronger than what could be projected in five years into the future since the market has been shared by some other new developers and also due to the ever increasing customers bargaining power.
The U.S internet industry analysis will also be done based on the following tools; economic attributes framework, value chain analysis, porter`s five forces framework. Based on the economic tool, the demand for internet from the U.S internet industry is very high almost worldwide and it keeps growing with the growth in the world economy and also due to the technological advancements. The supply of the U.S internet industry is also high and steady and it also keeps growing as time advances as the industry also employs a continuous innovation to dominant the market. Marketing of the U.S internet industry is also very good and efficient since the geographical coverage of the internet has gone global. The U.S internet industry economic attributes framework in terms of investing and financing on the long term and short term assets has also been a very crucial area that has enabled them to generate enough cash flows and also to grow very rapidly.
The value chain analysis of the U.S internet industry is founded on the following pillars; upstream activities, downstream activities, brand name, differentiable goods. The upstream activities of the industry such as a continuous value addition to their products makes the company to remain relevant over decades through development of new softwares and upgrading of their brands to suit the market demand. Innovation is also a dominant activity in the internet industry as evidence by Google continuous introduction of new features. The brand name of the U.S internet industry has earned them a great advantage to expand and also to maintain wider margins as compared to their closest competitors. This has also made is easier for such companies in the U.S internet industry to easily access market and explore greener pastures due to the uniqueness of their products. Having differentiable goods and services is also a major aspect that has contributed remarkably to the growth and expansion of the U.S internet industry.
Strategy analysis refers to the process of evaluating the business decisions of a company and success while sustaining and building the competitive advantage it has. The company`s strategy analysis can be done based on the criteria of a sustainable competitive advantage. This module is based on the principles of resource availability, both tangible and intangible, the capability to deploy the resources and the capacity to give a competitive advantage. The internet strategy for the Google Company is tied to the technical and the creative internet aspects. This includes advertising, design, the influx in sales and the general development of the company. The Google company has also a good placement of customer engagement at different stages through the search engine optimization (SEO) and also through the search engine marketing (SEM) through email marketing strategies and also through the web based strategies on the social media platforms such as Facebook and twitter.
Google Internet Company in the U.S also uses the incumbent’s advantage strategy in order to stay and dominate the internet industry. Apart from marketing the search engine and function software development, Google also has deployed a lot of fund drive for innovation thought the world to gain a all round relevance through innovation technology. The economies of scale that this company has make its products to be relatively cheap as an incumbent advantage to push away and suppress new players in the market.
The other internet strategy that the Google company uses on the practical aspects of the internet are such as advancement in security measures to their clients, highly efficient hosting and the deployment of quality software s and technologies. Security is one of the major headaches that the internet companies have had over the past years with ever increasing cases of cybercrimes. Therefore by devising means of improving on the security to data bases and the privacy information of the clients is in itself a milestone to expanding ones market and business margin. Google has widely invested on training and on knowledge transfer that ensures that the corporate brand is protected at all times and also that the website too is guarded against internal and external risks. Through such forums, there have been improved systems with more secure user interfaces that are highly efficient and reliable.This strategic plan also gives Google a supplier advantage to dictate to the market and to have an added advantage over its competitors.
In conclusion, the success behind the U.S internet industry is founded on the foundations of the application of the industry and strategy analysis modules of the business structures and also the environment in which it operates. Human wants and needs continues to increase and also technological advancements also keeps changing and so must the businesses. This automatically propels them to develop mechanisms that will render them relevant through carrying out proper business analysis and strategies. Proper analysis also helps to curb the challenges posed by competitors through carrying out market research and also by widening the market margins for an industry. Therefore, industry analysis is a very key aspect that very firm should study before venturing into any commercial field that may require huge capital and technical skills.