Google †PESTEL & Porter’s Five Forces Analysis Essay

1.0 IntroductionGoogle Inc, a global applied science company, founded in 1998 by Larry Page and Sergey Brin, is the roughly popular hunting engine in the human. Google provides numerous free services and products such as Google inquisition, YouTube, Google Maps, and has transformed how sight use and sh ar cultivation.Googles subscriber line spans from advertisement, info analytics, operational systems to technic every(prenominal)y advanced devices such as Google Glass, Driverless cars, Solar-powered drones, and was recently named The universe of discourses virtually Valuable Brand due to consumers perception of Google being a mod company focused on innovation (Bloomberg, 2014).As of 2013, Google has 43,862 employees working in more than 70 offices in oer 40 countries around the world with their headquarters located in Mountain View, California, USA. (2014). For the purpose of this study, I ordain be basing my analysis of Google in capital of capital of Singapore, its Southeast Asia headquarters which opened in 2007.The following sections will analyse the various factors that will influence Googles operations in Singapore, and conclude with recommendations of how Google should further correct to boost its emulous edge.2.0 PESTEL Analysis2.1 Politicalthough little political restrictions affect Googles operations due to the nature of its business, government stability is a study aspect in Googles strategic planning. Singapore had been rated Asias most politically stable country (Berdzenadze, 2013), and Asias most competitive scrimping in the Global Competitiveness composing by the World economic Forum (2013).When the commercialize of operations has political and economic stability,businesses will din and in turn advertise more, in that locationof increasing business opportunities for Google.2.2 frugalGoogle was hailed as being Recession-Proof when they continued to post solid earnings by means of the economic downturn (Quittner, 2008). It is well positioned to weather the downturn, as its services ar free to consumers, and advertisers substituted traditional media advertising with online advertising to cut costs.Regardless, Singapore is astray acknowledged as having one of the best business environments in the world. be as the worlds easiest place to do business (The World Bank Group, 2014) and city with the best investment potential (as cited by scotch evolution Board, 2014), Singapore with its sound monetary and fiscal policy pull backs some investors.The more investment dollars pour into a business, the more they are free to spend on advertisements, which increases business opportunities for Google.2.3 SocialIn Singapore where thither is high internet acumen rate of 87% and mobile incursion rate of 156% (IDA, 2014), consumers comfortable with technology often see the internet as the first source of product re anticipate before making their nett purchase, making Google a very important part of the pr ocess. To increase the numeral of users accessing Googles services from their mobile device, Google released its own Android mobile operating system which now holds 55.8% of the mobile device market share (comScore, 2014). It is thus increasingly important for marketers to influence consumers final purchasing decisions by advertising in this space.However, Googles understructure created to customise and in the flesh(predicate)ise each users search experience by storing their personal information has beenreceived with mixed reactions as some find Googles exchange of such information a violation of their privacy. As peoples attitude and concern towards protecting their private grantive information change, Googles business whitethorn face a threat.2.4 TechnologicalBeyond a search engine, Google constantly innovates and develop its wide range of free products aimed at beef up user engagement.Technology rapidly advances, and Google actively takes measures to examine they do non f all behind. According to Bloomberg data, Google has drawd 127 companies in the past three years (as cited by Farzad, 2014). Besides buying companies, such as Waze, a GPS navigation software, and Admeld, an advertising optimisation platform, in a smart defensive play to acquire companies that poses a threat to its business, Google has been acquiring a wide range of technological companies from Humanoid robots to Airborne lace turbines to Home automation devices.In a bid to strengthen its business, Google is increasingly moving into ontogenesis hardware technology that has a tangible presence in consumers homes and offices.2.5 EnvironmentalIt is estimated that Google runs over a zillion servers in data spirits worldwide, with its first Southeast Asia data centre in Singapore operating since 2013, and consumes a huge aggregate of electrical elan vital. Every time someone makes a search or sends an email, they contributes to the electricity bill at Googles data centre (Tan, 2014). However, Google argues that they nonplus do the world a greener place considering the electricity consumption for a search in lieu of a drive down to the library. Above all, foreign new(prenominal) companies, Google builds most of their own data centres down to the energy-saving chips it uses, and custom-designs its servers for efficient energy use (Glanz, 2011). Itsfacility in Singapore uses recycled water for its cooling system.Although Google is a high carbon footprint business, it has adopted a proactive strategy to hold itself up as a 3ly responsible company by making its facilities environmentally-friendly through generating its own renewable energy from solar panels, wind farms and purchasing carbon offsets by funding green efforts.2.6 LegalFrom the opinion of law and regulation, the internet is inherently transgressive and embarrassing to govern since it is global, and information privy be instantly transferred at anytime, anywhere. Googles products collects a lot of personally identifiable information on its users DoubleClick cookies tracking online footprints, Google wallet storing name, credit bug details, and thus how this information is compiled, used or stored are a lifelike concern.Googles data centre in Singapore serves users around the region, and Singapores business-friendly approach with the privacy law on international transfers of data that does not restricts transfers to specific countries on their approved list, but instead puts the warhead on the company to put in place measures to construe personal data is transferred to locations with comparable standard of protection, makes compliance issues less complicated than that of europiums (Bratby, 2013).In general, Singapore is a relatively late adopter of privacy laws (The Register, 2014), and is largely reactive quite an than transformative. As such, legal issues that may arise in Singapore are likely to be those that Google already has measures or policies in place.3.0 Po rters Five Forces Analysis3.1 flagellum of New EntrantsAlthough the internet has traditionally been viewed as a low parapet to entry marketplace, the barriers to entry in the internet search market are high, as it would take a giant step in innovation, and a mammoth starting capital to build a network infrastructure that could compete with all of Googles services and products. The scale of Googles businesses has buy the farm a significant barrier to entry.Nevertheless, companies focusing solely on developing a single product or service that Google offers could potentially absorb Googles dominance in that area, as seen with the Rubicon Project, an advertising start-up which surpassed Googles Ad Network reach by over 6 million unique visitors (Thomas, 2012).3.2 Threat of SubstitutionSome of Googles products and services could potentially be substituted, such as users choosing GPS instead of Google Maps, but Googles primal business is their online search engine, which is difficult to substitute.Everyday, an average of 5.9 billion Google searches are make (Statistic Brain, 2014). Although there are alternative sources of information such as newspapers, books, television, or radio, the internet is the preferred source for people to retrieve information as it provides information on demand. As of now, the threat of substitution is low as there are no foreseeable substitutions for online search.3.3 Supplier creatorGoogle owns its search platform and advertising services tool, thus it has very limited moving picture to suppliers. Due to the advertising system used to generate taxation, both the advertiser and search engine user are Googles customers.However, websites that befuddle attached inventory to Google for sale can be considered their supplier. As websites frequently have their inventorylisted across multiple ad exchanges, Google will have to lead both quantity of sales and quality of pricing of their buys to maintain the impressions granted to them for sale by web publishers. So long as Google maintains beefed-up market dominance, supplier bargaining will lie low.3.4 Buyer PowerAlthough internet users are free to switch to alternative platforms, most of Googles products and services that they use are at no cost to them.Whereas in the case where the buyer is the advertiser, buyer power is low as there are limited vendors they could spend with. A key feature of Googles ad buying platform, DoubleClick, is that advertisers can buy ads on 300 unlike websites with a few clicks instead of making 300 calls or meetings to crush the ads on all the websites.The scale of modern online media buying is staggering as Google provides access to millions of possible sites for advertising. Although Googles products are not unique, they are at scale, and can make competition difficult for start-up and smaller competitors.3.5 Industry arguingGoogle is known for being the best search engine with high relevancy within its searches, thus its pos ition as the market leader in the search market with about 80% market share (Nguyen,2012). Though competitors have caught up, and substitution of Google search in favour of Yahoo or Microsofts Bing is certainly possible, Googling has now been ingrained in peoples mind, and is largely a habit instead of being driven by significant product differentiation.When Google introduced the Android operating system, they have placed themselves in direct competition with Apple. Though Android phones currently has larger market share than iOS phones, Apple will not easily give in in the battle of mobile operating systems.Googles strategy is all about scale and interoperability. With advertising making up over 90% of its total revenue (Google Inc, 2014), it is critical for Google to protect its space, thus its entrance into the web browser and mobile operating system market. When one owns the platform, one has the stage. Google tries to own as much of the overall ecosystem as they can so as to l ease in its users and keep out competitors. In doing so, it does not need coarse advertising expense to stay and remain on top.4.0 Conclusion & RecommendationsIn scathe of PESTEL analysis, I recommend that Google venture into new markets around the region. Singapore is a mature market, thus opportunities to grow further are rather limited due to its market saturation and small population. In essence, it is difficult to justify large advertising spend when it can never attract large reciprocal sales as it simply does not have the population to support it.However, expansion into emerging markets in Southeast Asia such as Indonesia or Philippines will help its revenue growth. To illustrate, Indonesia has internet penetration at 24% (Statista, 2014), which translate to 60 million users. That is 12 multiplication Singapores population. The propensity of growth there is phenomenon. In terms of Porters Five Forces analysis, I recommend that Google diversify into other ventures that helps generates income as it is not healthy for the company to rely almost exclusively on one source of revenue. With its wide range of free products and services, Google could select a few of its products to further develop as alternative revenue sources such as its VOIP business, or licensing fees for its products.Google will also need to ensure that it maintains its momentum in the research and development of its search engine to ensure that it is ahead of its competitor. With Microsoft and Yahoo searchs merger, the convergence of technologies will improve their search engines, and possibly catapult Yahoos more thriving products such as Yahoo Finance and Flickr.As long as Googles continue to innovate and stay ahead of its game, they will remain the market leader in the industry.5.0 ReferencesBloomberg. (2014, May 21). Google Overtakes Apple as almost Valuable Brand Video file. Retrieved 13 June 2014, from http//www.bloomberg.com/video/google-overtakes-apple-as-most-valuable-brand-P gHrIgIsQMuzLZA4CxRJSg.htmlBratby, R. (2013) Singapore takes business-friendly approach in data protection guidelines. Retrieved June 24, 2014, from http//www.zdnet.com/sg/singapore-takes-business-friendly-approach-in-data-protection-guidelines-7000021091/comScore. (2014). comScore Device Essentials Singapore & Hong Kong 2013. Retrieved June 13, 2014, from https//www.comscore.com/content/download/23711/1282705/ magnetic variation/1/file/ singapore-vs-hongkong-mobile-usage.pdfBerdzenadze, I. (2013) Singapore Asias Leading Business Hub. CNN. Retrieved June 24, 2014, from http//ireport.cnn.com/docs/DOC-953461 frugal Development Board. (2014). About Singapore Facts and Rankings. Retrieved June 13, 2014, from http//www.edb.gov.sg/content/edb/en/why-singapore/about-singapore/facts-and-rankings/rankings.htmlFarzad, R. (2014). Google at $four hundred Billion A New No. 2 in market Cap. Business Week. Retrieved June 22, 2014, from http//www.businessweek.com/articles/2014-02-12/google-at-400 -billion-a-new-no-dot-2-in-market-capGlanz, J. (2011, Sep 9). Google Details, and Defends, Its Use of Electricity. The New York Times, pp. B1. Retrieved June 23, 2014, fromhttp//www.nytimes.com/2011/09/09/technology/google-details-and-defends-its-use-of-electricity.htmlGoogle Inc. (2014) Google annual Report 2013. (pp. 26). Retrieved June 13, 2014, from http//investor.google.com/proxy.htmlGoogle Inc. (2014) Company Google locations. Retrieved June 22, 2014, from http//www.google.com/about/company/facts/locations/Google Inc. (2014) Investor Relations 2014 Financial Tables. Retrieved June 22, 2014, from https//investor.google.com/financial/tables.htmlInfo-communications Development pronouncement of Singapore. (2012). Google breaks ground for Singapore data centre. Retrieved June 13, 2014, from http//www.ida.gov.sg/blog/insg/in-the-news/google-breaks-ground-for-singapore-data-centre/Info-communications Development Authority of Singapore. (2014). Infocomm Landscape Facts and Figure s. Retrieved June 22, 2014, from http//www.ida.gov.sg/Infocomm-Landscape/Facts-and-FiguresQuittner. J. (2008, 16 Oct). Behold The Recession-Proof Google. Time. Retrieved June 22, 2014, from http//content.time.com/time/business/article/0,8599,1851286,00.htmlStatisticbrain. (2014). Google Annual Search Statistics Statistic Brain. Retrieved June 16, 2014, from http//www.statisticbrain.com/google-searches/Tan, H. (2011, 21 Dec). Rainfall to cool Googles data centre here. The Straits Times, pp. 21. Retrieved June 23, 2014 from http//newslink.asiaone.com/user/OrderArticleRequest.action? documentId=nica_ST_2011_22596292&year=2011&month=12&date=21The Register. (2014). Singapore lures big biz with mega data protection regime. Retrieved 24 June 2014, from