Google internal environment

Running Head: ENVIRONMENTAL SCANNING 1

ENVIRONMENTAL SCANNING 2

Environmental Scanning

John Mbiti

STR/581

01/29/2017

Carlos Pinda

University Of Phoenix

Current: Google Inc.

Recent: Microsoft Inc.

Google Inc. is an American multinational company that operates in the internet technology industry. The company offers a platform that is user-friendly and helps users to search and find information from the world wide web. The use of the services attracts a worldwide customer base that has contributed to Google’s revenues over the years.

Environmental Scanning

Environmental Scanning is a process which surveys and systematically interprets relevant data to determine the threats and opportunities in a systematic way (Babatunde & Adebisi, 2012). The company is expected to gather information about itself, the competitors and the external environment. Through the environment scanning Google Inc. can determine the models to create value and sustain competitive advantage.

Google can use environment scanning in creating value. Google has stayed ahead of Yahoo through its element of newness, development of its brand status, reduction of risk, customization, and reduction of risk. The ideas around the creation of value developed after the management analyzed the information about the competitors and its internal capacity.

The company has developed a user-friendly environment which connects the users to the desired outcome hence enhancing the experience. The strategy enhances the experience of the customers who are interested in Google free services and promoting an environment for the business. An example of Google customization is Picasa which provides families with an environment whereby they can share with friend and families. They share videos and photos with one another based on this platform.

The risk reduction value creation is provided through the secure Google mail. The environment scan has indicated that the industry has a niche regarding having a mail that is secure for the users. The Google Mail is a secure e-mail account by Google (Rowland, 2017). The subscription with Google gives the customers access to the platform where they can stay in contact with employers, families, and friends.

Evaluate the Company’s External Environment

The analysis of the external factors provides the management with an understanding of the opportunities that are available and how to mitigate the threats in the market. Based on the PESTEL analysis below it is important for Google to focus its efforts on technological and economic factors.

The business of Google is subject to several economic changes. Using the PESTEL model, the external economic factors can alter the opportunities in the market that are present in the business (Chaneta, 2011). The most significant economic factors that Google is expected to deal with include economic stability its major markets, and rapid expansion of the markets in developing countries. The external economic factors above creates opportunities for Google Inc. The company is expected to exploit economic stability in major markets and the fast growth in developing markets. The external opportunities can help the company expand its business around the globe.

Google’s business is technology based which means that the technological aspect of the external environment is very critical for its existence. The changes in the technological environment are potential makers or breakers of Google’s business (Rowland, 2017). The technological environment factors that are important for Google Inc. business are highlighted below.

The opportunity exists for Google due to growing access to the internet in the developing world. At the same time, there is rapid adoption of the use of mobile devices in the international market. The company is faced with significant opportunities from the external technological factors. The company will gain through the increased advertising revenues as the developing markets become connected to the online environment. Google is also expected to improve the nature of online friendliness of its products which can exploit the mobile trends (Rowland, 2017).

The General Environment

Assessment of the general environment involves determining significance and timing of the trends and changes in the strategic management of Google Inc. The assessment under this section is done using Porter’s Five Forces.

The potential threat of new entrants in the industry that Google Inc. operates is low due to the high barrier to entry. At the moment the competitors to the company have several servers that are deployed across the world and have been gathered over the years. When a new entrant comes into the market, it is critical that they offer search results that are fast to compete with establishing companies. The market is mature meaning that new entrant threat is relatively low.

The threat of suppliers is low and will remain as such as long as the company manages to maintain its dominance in the market (Chaneta, 2011). The ad system managed by the company is an important source of income since the ad-maker, and the ad-receivers are part of the customer portfolio of the company. The ability of the company to maintain customer and seller collaboration is critical to reducing the cost of revenue as a percentage of sales.

The customer bargaining power of the company is low since no individual customer has a controlling interest. The situation exists as it is because no individual customer covers more than 3% of the net revenue of the company. The threat of potential substitute for Google services is low. The internet has developed into the single mode that is used to search and retrieve information from the internet. Google is the only platform that is available for the creation of search services.

The existing competition is relatively high even though Google is the main player in the industry. The main competitors that the company has had to deal with over the years include Microsoft and Google. The two companies operate under Live Search and MSN respectively. The amount of income that is made in the income is high, and Google Inc. holds a larger share of the income.

Industry Operating Environment

The operating environment of the company is the external industry environment (Gupta, 2013). The company is affected by the political, economic, social, technological and environmental elements. The legal aspect of the business has come to light due to the international nature of the business. Google has been accused of giving its services an added advantage regarding search results in its platform. The company has denied such practices which have threatened its business model up to date. The management is expected to always take into consideration the legal and social elements in its operation to avoid clashing with its environment.