This study will analyze the concern theoretical account, hazard exposure and hazard direction schemes of Google. To place the company hazard, it is of import to get down by understanding the company ‘s current concern and its concern theoretical account. With these penetrations, major hazards that Google is exposed will be discussed. The hazard exposure analysis will be divided into identified and unidentified hazards. Then, Google ‘s hazard direction schemes will be assessed. These schemes will be divided into explicit and implicit hazard direction schemes. Finally, a set of recommendations will be provided to further better the decrease of hazard exposure.
As the market leader in the cyberspace hunt engine services industry, Google owns the taking internet hunt engine, Google.com. The Business theoretical account of Google is derived from its mission statement: “ to form the universe ‘s information and do it universally accessible and utile. ” ( Google, 2010a ) . This mission is an encouragement to take the manner for Google to aim its ultimate ends. To accomplish its mission and satisfy its ends, Google has created an advanced and radical concern theoretical account, which is to go an highly big and diversified information supplier beyond the significance of an on-line hunt engine. Google has turned its concern theoretical account into the concern design via cardinal assets. The cardinal assets of concern theoretical account conveying both strengths and exposures to Google. The concern theoretical accounts ‘ failings expose Google to hazards of macro-environment factors, industry factors and steadfast factors.
The cardinal assets of Google are its diversified merchandises and services, “ market place ” and trade name value, “ important substructure base ” and client relationship ( Datamonitor, 2009 ) .
Google delivers diversified merchandises and services based on a big base of merchandises and services, such as “ Google.com, Communication, Collaboration and Communities, Downloadable applications, Google GEO, Google AdWords, Google AdSense ” . “ Adwords and AdSense ” , the most of import assets, contribute to about all the grosss Google accomplishes ( Datamonitor, 2008 ) . Google AdSense was initiated in 2003 ( Datamonior, 2008 ) . Google launched “ Adwords ” in the undermentioned twelvemonth, ( Google, 2010b ) . The company chiefly generates grosss via these two corresponding services webs, Google AdWords and Google Adsense ( Google, 2010c ) . In fact, AdWords is the corporation ‘s worldwide advertisement undertaking that is loosely identified as the web ‘s most capable advertisement tool. Through AdWords, advertizers are able to make terminal users who are shoping for destitute information relevant to what certain advertizers have provided through “ 41 different interface linguistic communications ” . At the same clip, Google Adsense plan helps the company to present advertizements for presence on the 3rd parties web sites, which are portion of Google web members. The complimentary and powerful AdWords and AdSense concern theoretical account create concern net incomes through offering services to 160,000 planetary advertizers and 1000000s of day-to-day terminal users. The strong grosss and net incomes prepare the company to put in possible hereafter chances, integrating new merchandises invention, planetary enlargement and positive acquisitions in multi markets and multi parts. ( Datamonior, 2008 )
Another important plus of the concern theoretical account is market place and trade name value for Google. As a planetary prima cyberspace hunt engine, Google serves search consequences in 160 kingdoms with more than 117 linguistic communications ( Datamonitor, 2008 ) . Hence, Google has shaped a vigorous market place in its diversified markets it operates. For illustration, Google has three worldwide markets, incarnating U.S, Europe and the remainder of the universe. Specifically, harmonizing to entire figure of sole surfboarders, “ Google is the taking hunt engine in Argentina, Australia, Belgium. Brazil, Canada, Denmark, France, Germany, India, Italy, Mexico, Spain, Sweden, Switzerland, the UK and the US. ” In add-on, YouTube cyberspace picture, incorporated in Google services has grown to an internet media traffic leader, keeping strong market portion in the societal web platform ( Datamonitor, 2009 ) . Furthermore, dominant market place has driven Google develop into top valued internet trade names in the universe. Harmonizing to market research house Miillward Brown, Google has been ranked for the 3rd consecutive clip as the Earth ‘s most valuable trade name in 2009, go oning to dominate Microsoft and other well-known trade names like General Electric Company, Coca-Cola, Wal-Mart Stores and IBM. At the same clip, Google has turned into the planetary first $ 1000 billion trade name. Dominant market place and premier trade name repute of the company consolidate investor involvements and client trade name trueness every bit good as employees assurances. All the factors above generate gross growing ( Datamonitor, 2009 ) .
As an information engineering innovator, information engineering becomes an indispensable plus for Google. In fact, Google has “ proprietary engineering and technological substructure. ” The hunt engine in the company originates from its sole “ PageRank engineering, ” which links the hunt petition to the extremely relevant contents on Google ‘s web pages and shows. This patented “ PageRank engineering ” will near termination by 2017. Furthermore, “ Googlebots, web-crawling automatons ” are applied by the house to seek the web sites in order to set up an overpowering database used by Google on-line hunt engine. By constructing up the index, Google ranks the largest searchable catalogues, catching all the other hunt engines ( Datamonitor, 2008 ) .
Additionally, Google has set up a powerful “ technological substructure ” . To make a world-wide user base of significant visitants, Google has accumulated 450,000 waiters, chiefly centering in the “ US ( Mountain View, California ; Virginia ; Atlanta, Georgia, and The Dalles, Oregon ) , Ireland ( Dublin ) . ” These waiters are allocated to function Google hunt engine, Gmail, Blogger and its web-based word processor. Therefore, they offer the most efficient public presentation to planetary clients via geographically divided information hubs and waiters. Ultimately, the progress engineering and strong technological substructure locate Google in a leader place with competitory advantages by maintaining establishing advanced merchandises and services ( Datamonitor, 2009 ) .
Major Identified Risks
The major assets constituents have chiefly dedicated to progressive gross growing and gowning market portion. In peculiar, based on the FY 2009 study, Google has gained $ 6,520,448 million net income that is much higher than FY 2008 ‘s $ 4,226,858 million ( Google Inc, 2009 ) . However, this does non bespeak that Google ‘s money gaining logic is perfect. The cardinal assets are besides exposed to certain hazards and damage the house net incomes and growing.
Political Hazards
Google operates towards cosmopolitan users in multi parts with a considerable client base. Similar to other transnational corporations, it faces transverse state hazards upon governmental Torahs and ordinances. Because its merchandises and services are available worldwide, although Google does non hold certain local entity, staff or substructure, some “ foreign legal powers ” have required Google to obey their Torahs and ordinances. The differentiated accounts and apprehensions on “ informations protection Torahs ” and their enforcement on cyberspace in Europe and other “ foreign legal powers ” are obscure and contradictory. These Torahs or ordinances pose hazards for Google to follow with these assorted cross boundary line demands due to inconsistency with Google informations protection applications ( Google Inc, 2009 ) . This will do operational cost and client disloyalty. Not merely is personal informations protection relevant, but besides national informations involvement is involved, such as censoring. For illustration, On Mar. 22, 2010, Google decided to discontinue its mainland Chinese Google hunt services to exchange to a Hong Kong website due to disagreement with internet censoring policy with the Chinese authorities. The absence of Google in universe ‘s largest cyberspace market will do a possible loss in the fiscal environment and the market portion in the Chinese market ( MacMillan, 2010 ) .
Economic Hazards
Economic uncertainnesss, in peculiar, economic downswing triggered by planetary economic crisis have placed hazards on Google advertisement gross achievements. Google ‘s concern theoretical account is an on-line advertisement theoretical account by bring forthing gross about entirely from administering related, utile on-line advertisement. Statistically, publicizing grosss was 99 % of Google ‘s entire gross in 2007 and 97 % in 2008 and 2009 ( Google Inc, 2009 ) . The economic lag has encouraged on-line advertizers to curtail advertisement disbursement. Consequently, the “ mean cost-per-click ” made by the advertizers fell as advertizers have tightened advertizement costs in reaction to the planetary economic recession. Additionally, advertizers have reduced their commands on keywords due to the decrease in gross revenues through “ per paid chink. ” Consequently, if cardinal advertizers decrease or halt exposing advertizements on Google due to fiscal budget concern, the negative harm on Google concern and grosss could be terrible and fatal. For case, even though Google web sites and Google Network members ‘ advertisement gross has grown from increasing paid chinks on advertisement undertakings, the ads gross was besides offset by diminishing “ mean cost -per-click ” reimbursed by advertizers to a big extent ( Datamonitor,2009 ) .
Social and cultural hazards
Social and cultural tendencies upon turning public consciousness towards personal privateness and individuality security issues have certain hazards. These hazards are peculiarly confronted by information engineering based corporations, like Google. Using these hazards to the Google instance, the hazards are informations privateness and security issues. Google ‘s success has been developed significantly through trade name individuality and repute. To continue and elate the Google trade name is critical for planetary enlargement on terminal user, advertizers, Google Network members and other concern spouses. As a consequence, the exposure to data privateness and user security will impact unfavorably on Google concern runing result and fiscal consequences and finally damage Google trade name image ( Google Inc, 2009 ) . For illustration, the company invented the “ street position map ” for Google Maps and Google Earth, suggesting 360 degree street-level metropolis positions and empowering users to see chosen metropoliss ‘ and environing urban countries. This innovation has lead to some privateness issues. For case, the city manager of North Oaks, Minnesota complained Google has broken the “ encroaching regulation ” in the metropolis. Similar issues in civilization and privateness can ensue in harmful impact on its trade name repute, which will further impact its growing ( Datamonitor, 2008 ) .
Technological hazards
The launch of new engineering is required for an advanced company. The new engineering will come with tonss of rational belongings, like patents, hallmarks, and right of first publication and in order to protect the sole engineering. However, if the outside state of affairss are out of control, they will present menaces or hazards to rational belongings. To take Google as an illustration, any of import injury to Intellectual belongings ( IP ) rights could ache Google ‘s concern. For illustration, Google ‘s transnational operations could decline troubles with satisfactory IP rights defense mechanism since IP Torahs, like patent Torahs and IP rights fortunes vary cross states. With a great trade with IP, it is easy for it to acquire involved in judicial proceeding of rational belongings rights misdemeanors. The failure of the case will be a big sum of compensation fees for Google and increase entire costs. Besides, Google hallmarks are confronting menace. Specifically, “ Google ” may alter to a extremely used term equivalent to “ hunt ” , ensuing in loss of hallmark protection and death of trade name acknowledgment. This could go on to merchandise secrets belongings. The secretiveness might be ignored by Google forces or foreigners, conveying approximately less importance from these trade secrets ( Google Inc, 2009 ) .
Major Unidentified Risks
Technological hazards
Technological uncertainness plays a cardinal function in the information engineering age. The extremely developing engineering put hazards on information engineering ( IT ) oriented companies, such as Google. Google is to a great extent dependent on IT and has set up a complicated IT substructure. To accomplish the steadily turning technological substructure, harmonizing to annually fiscal statements, Google has invested well in Research and Development ( R & A ; D ) with one-year growing rate of 120 % from period 2003 to 2009 ( 2843 million ) and its R & A ; D employees grew to from 5,788 in 2007 to 7443 in 2009 ( Google Inc, 2009 ) . Even though, frequent engineering invention has produced tonss of competitory new merchandises and services which become cardinal assets in concern theoretical account, inefficient merchandises merger has non made all new merchandises reach clients efficaciously. For illustration, most Google users have to use the Google hunt engine to happen new merchandises due to unrecognition of new merchandises rooted in Google ‘s web sites. This time-consuming process could do clients exchange to other quicker hunt engines, taking to disfavor in client relationship. Furthermore, if a rival, like Yahoo has launched better Bridgess between diverse merchandises by exhibiting most merchandises available on its home page, it is possible of for Google to be defeated in the on-line conflict ( Datamonitor, 2009 ) .
Operational hazards
Customer relationship is the most important plus in a customer-centric corporation. Bing unable to cover with client relationships successfully will set most serious hazard on the house. Google focuses on users including hunt users and Google Network members, supplying the best likely experiences. Particularly, The Google Network members have contributed 31 % of entire grosss in 2008 and 30 % in 2009 ( Google Inc, 2009 ) . However, Google did non place that the web participants are capable of from consumers to rivals. The heavy dependance on Google Network members will originate future operational losingss. For case, if some of the members end the contracts with Google and so reassign to challengers or their ain hunt engine, the online competition will be intensified and operational public presentation will be adversely affected ( Datamonitor, 2008 ) .
Internal work force hazards
One of the most popular societal and industrial tendencies is located in lifting importance on human capital resource. Due to restriction of qualified human capital, the competition for extremely competitory employees is acquiring fierce. The hazard of being unable to maintain and update qualified staff will finally convey a halt to growing and corporate value death. Google has non realized the value of skilled forces which injects endowments and parts to originality and freshness of future tools and applications. Even if Google has introduced “ equity award plans ” to profit employees, the attempt on pulling prospective and maintain current persons are far from really sufficient and effectual. The corporate nucleus civilization is based on invention, creativeness and coaction. If Google can non appreciate the human power in the house, the touchable and intangible benefits and values spurred by intelligent employee populations will be hard to retain or obtain. In the terminal, the corporate civilization will lose significance and future growing will be difficult to accomplish ( Google Inc, 2009 ) .
Risk Management Strategies
Different types of hazard have been managed otherwise by Google. Hence, explicit hazards which refer to the recognised and disclosed publically in concern studies are spurred from macro-environmental hazards and are inquiring for uninterrupted developing schemes in response to those hazards. To analyze Google hazard direction schemes, the tactics towards different hazards are categorized into explicit and implicit hazard direction schemes.
Political hazard direction schemes
There are a assortment of Torahs, ordinances, and policies in different states. The complexness and volatility in political Fieldss have put political uncertainness to Google. Google has implemented a twosome of hazard direction attacks to work out the hazardous jobs. To accommodate to the specific investing and operation environment, Google devotes plentifulness of clip and money to negociate with foreign authoritiess. Furthermore, Google flexibly adjusts merchandises and services bringing by barricading and extinguishing sensitive and violative contents which could act upon important people and issues in certain provinces. For illustration, the nationalised censoring in China has pushed Google to go forth Chinese mainland hunt market. However, as an option, Google convinced the Chinese authorities to empower Google to exchange its hunt engine from mainland China to Hong Kong. In fact, Google redirected its mainland user to its uncensored Hong Kong server. It is an appropriate scheme to reassign its mainland market portion to Hong Kong site temperarily. Nevertheless, in a long tally, Hong Kong web is still capable to censorship through a “ licensing system for cyberspace content suppliers ” proctors and barricade sensitive political key words ( Fletcher, 2010 ) . Strategically, Google advertizers will halt partnership and defect to home-developed hunt engine Baidu. Over the clip, Google will decrease its market portion to approach nothing in China if Hong Kong waiter is blocked and advertiser will switch to local rivals ( Womack, 2010 ) . Consequently, the assorted political and regulative uncertainnesss can increase negative deductions for Google ‘s public presentation.
Economic hazard direction schemes
On one manus, to forestall enduring economic crisis, Google has the most superior advantage by offering free merchandises and services to stop users. Following gift economic system tendency, Google ‘s “ free tiffin ” scheme has kept client trueness via incorporating abundant resources good. Additionally, to cover with the uncertainness with terminal users, Google applied selling schemes and R & A ; D inventions. For illustration, hunt bellwether Google purchased Postini, a private Web communications security supplier, for $ 625 million hard currency in 2007. This application aims to suppress users ‘ email security from virus or hacker onslaughts ( CNNMoney.com, 2007 ) . To retain loyal advertizers, Google ne’er stop taking attempt to optimise stop user and Group Network member ‘s on-line experiences and accomplish long-run client values. These parts have kept Google ‘s stable gaining growing. On the other manus, long term focal point forces Google to pretermit short term fiscal net incomes. Insufficient one-fourth net incomes will detain the planned acquisitions and planetary enlargements. For case, the company ‘s 2010 first-quarter public presentation did non run into expectancies. The cost per chink dropped about 4 per centum from the 4th one-fourth of last twelvemonth. The market portion has fallen by 1 % in January of 2010 from December of 2009 and besides has decreased by 0.4 % in March from February of 2010 ( The Nielsen Company, 2010 ) . These monthly diminution could make harm to its expected acquisitions and capital disbursement on the hereafter show advertizements and wireless telecommunications. In the terminal, the annual net income border could drop to a big extent ( Womack, 2010 ) .
Social and cultural hazard direction schemes
To pull off menaces of cultural and private issues, one meaningful scheme is to avoid the hazards from staff and spouses. For illustration, Google has signed a “ confidentiality and innovation assignment understandings with their employees, advisers and 3rd parties ” to minimise misdemeanors on O its rational belongings rights. ( Google Inc, 2008 ) . Besides, to cover with public crisis, the public dealingss is necessary. For case, when Google became cognizant of Street position autos jobs, Google instantly disconnected the handiness to informations and ended assemblage WIFI web informations through Street View autos holistically. Beyond the operational reaction, Google once negotiated with relevant spheres and made official apologies. By repairing the job, Google does non merely concern rightness of contents to states ‘ ordinances, but besides regards public trust care as a important consideration ( Eustace, 2010 ) . The enterprise to continue trade name trueness besides has inauspicious impact on aspiration and encouragement to transport out new engineerings on shows and application. Google relies extensively on engineerings ‘ invention and often launches fresh merchandises and services. It is inevitable that these engineerings will come with national or personal engagement of privateness since high engineerings with high net income are on a regular basis associated with high hazards of privateness policies.
Technological hazard direction schemes
To cut down the emphasis on IP rights and protect the value of merchandises, Google enforced policies to forestall mining the cyberspace for video cartridge holders and enable picture cartridge holders that simply were assigned by the manufacturers. To set it merely, Google constricted the Video Viewer, which was rooted on the open-source VLC participant, to merely do payment on files that were applicable on its waiters ( Kuan, 2009 ) . The policies good guard IP rights in certain Fieldss. Confronting the bing or possible lawful and regulative insecurity on IP rights worldwide, Google has put utile policies and processes into pattern with legal duties. For case, Google has conformity with “ Digital Millennium Copyright Act ” to extenuate legislative misdemeanors ( Google Inc, 2008 ) . Unfortunately, the regulative hazards can non be wholly prohibited due to unpredictable planetary state of affairss. Besides, exposing to going a generic term equivalent to “ hunt ” , Google has prepared lawful defensive system, including legal paperss and attorneies ( Google Inc, 2009 ) . If the hallmark is offended illicitly, Google is able to contend back harshly and denote powerful warnings to the populace who intentionally make usage of free hallmarks. However, this action will take down the trial-out want from future cyberspace surfboarders and do it rather expensive to make concern and will ache runing income ( Kuan, 2009 ) .
Problems and Recommendations
As the unidentified hazards analysed supra, these unrecognized hazard have non been managed at all. Some recommendations and suggestions will be discussed to assist Google relieve these possible hazards.
First, sing steadfast technological hazards, Google did non recognize the significance on unity of bing merchandises and services which are independently organized. With inefficiently interconnected merchandises and services fortunes, misconduct and misfunction are possible. To cut down the operational hazards that Google is involved with, Google is supposed to ever supervise and oversee the interrelatednesss among current applications and undertake the new relationship between produced and updating merchandises by the strong R & A ; D squads. It is critical to look after the storage of stock lists in the information engineering warehouse alternatively of seeking out new productions. The significant R & A ; D investing should be used more economically to obtain cost efficiency. Besides, to get the better of rivals, Google needs to larn from rivals with respect to how the oppositions manage their online shows and tools successfully in order to do fastest and the most helpful information to users. Furthermore, the extremely organized web sites can appeal to big figure of advertizers and better paid click income on the footing of high chink rates on sites ( Datamonitor, 2009 ) .
Refering the hazard of retrenchment of terminal users and uncertainness of Google Network member ‘s partnerships, one of the solutions is to develop non-PC devices ‘ handiness to PC internet information. Google has already operated and introduced alternate hunt applications to offer hunt, electronic mail, map and other web site services which used to be applicable on Personal computer, like Google Mobile which can reassign on-line merchandises and services to mobile phones and Android which is open-source mobile-based package ( Google Inc, 2009 ) . Nevertheless, Google merely noticed the nomadic phone ‘s increasing popularity as a new engineering bearer and did non realized Mobile is genuinely the 5th media except newspaper, wireless, telecasting, and cyberspace as intelligence and information platform. To catch new client ‘s chinks in new age, it is necessary to equalise the importance of traditional and alternate hunt devices. At the same clip, for advertizers, AdWords and AdSense concern theoretical account are required to be applied to mobile or other platforms to do advertizements executable on multi entree bases. Particularly, advertizers who have ample fiscal budgets and great willingness on advertisement disbursement are prioritized.
Google is to a great extent trusting on extremely skilled staff, particularly like applied scientists and developers. To work out the jobs of deficiency of or losing of suited employees, Google is supposed to take attempts in four facets. First, with increasing acquisitions, localised experts are put on top precedence since they are familiar with local cultural and institutional backgrounds. Second, pecuniary wagess can fulfill persons based on proper managerial policies and schemes. For case, annual fillips can be assigned to people who have constructive public presentation on company ‘s touchable and intangible additions. Third, as the most well-known hunt leader, the valuable trade name value and repute are intangible strengths to enroll gifted individuals. Fourthly, Google ever attempts to determine a free and active environment for forces to recognize their ain dreams on creativity, development and self-actualization. This corporate civilization could congratulate with mercenary awards to do the employee satisfaction and trueness. This competitory advantage can non be imitated by other challengers.
Decision
In overall, Google seems to turn to many chief hazards both explicitly and implicitly through implementing assorted schemes. While some of those schemes are effectual in the short tally, others perform good in the long term. It is believed that none of these schemes will supply the prefect solutions to get the better of the hazards associated with cardinal assets and spouses due to the concern theoretical account exposures. Furthermore, some unrecognised uncertainnesss will present menaces on Google. Therefore, some recommendations and advice on hazard direction schemes are proposed above every bit good.
Mentions list
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