mmmmm dd, yyyy
Best Value Discipline
The web search engine is already mass market or commodity product. In the internet age, it has become intertwined with the computer and because the world-wide market is now so large and the need for web search has become indispensable, the direct approach to success is simply to create the best possible product. And product leadership is what Google was able to achieve even after five years that the first search engines came about. The wisdom of the crowd has already decided – Google’s algorithm gives the best search results among all search engines (Sullivan, 2013) and it still continues to fine-tune it. The search engine created the user market but Google’s other equally important product, the ad auction algorithm created its customer market. Again, ad buyers found Google’s algorithm to be the most cost-effective.
While giving product leadership its primary focus, Google offers satisfactory value for operational excellence. The main element is service availability which it has maintained satisfactorily so far. Google downtime is extremely rare as it has invested in about a million servers worldwide to support its service. Being a commodity service, Google doesn’t offer much for customer intimacy.
Having established dominance by its superior search engine, Google continues evolving its business through the generic strategy of differentiation. After establishing its core product Google Search, it followed with other successful products like Google Chrome, Gmail, Google Drive and Google Docs. The satisfaction of users using these products has added to their loyalty to Google thus it continues to develop more products and functionalities that will add value to its large loyal market.
It did not follow the path to cost leadership as its AdWords advertising is considered expensive and is only advisable for the largest stable companies (Rampton, 2014). It continues investing in product development and taking risks in search of more winning products that will compete against other successful web companies like Facebook, Instagram, Whatsapp, etc.
One can look at Google as pushing for diversification through product development and acquisitions. Since 2001, Google has spent $28 billion in company buy-outs which reveals its grand strategy of acquisition. It also seeks to diversify on a broader scale on top of its achievements in the web market. It has bought companies in the following fields - clean energy, restaurant review, aerospace, artificial intelligence research, robotics, GPS/ navigation, home automation, online advertising, online video and phone operating system (Smith, 2014). Most of these companies can complement Google’s web products.
Internally, it is busy developing new products like the driverless car, wearable computer, home automation, space elevator, smartwatch, ingestible health sensors and internet blimps (Smith, 2013). Google is willing to ride on a hit-and-miss approach when it comes to market acceptability but it is banking on its deep pockets to ride losses through and recover with winners.
Combination of Strategies
Aside from its product leadership, Google can also raise the level of its customer intimacy. With data coming from users’ web searches, it has the means to analyze common needs and wants and be able to target marketing messages to virtual market segments. It can use Gmail as its channel of communication. It can also continue to venture into non-internet businesses like clean energy and robotics. These are hedging initiatives into future technologies that will prepare for the day that web products would become too commoditized to be profitable.
Rampton, J. (2014, July 7). 5 Reasons You Shouldn't Use AdWords. Forbes. Retrieved January 15, 2015 from http://www.forbes.com/sites/johnrampton/2014/07/07/5-reasons-you-shouldnt-use-adwords/#1facacdd7dbb5fd920317dbb
Smith, D. (2014, August 12). The 11 Most Important Google Acquisitions Ever. Business Insider. Retrieved January 15, 2015 from http://www.businessinsider.com/important-google-acquisitions-2014-8?op=1
Smith, K. (2013, July 3). 10 Mind-Blowing Products Google Is Working On Right Now. Business Insider. Retrieved January 15, 2015 from http://www.businessinsider.com/mind-blowing-google-products-on-the-way-2013-7?op=1
Sullivan, D. (2013, February 11). Google Still World’s Most Popular Search Engine By Far, But Share Of Unique Searchers Dips Slightly. Search Engine Land. Retrieved January 15, 2015 from http://searchengineland.com/google-worlds-most-popular-search-engine-148089