Two Strategic Concepts with Google Strategy

Undoubtedly, Google has been a game changer in the modern world by revolutionizing how people connect and access information. Its services ranging from search engine optimization, web hosting, data storage, analytics, and advertisements have propelled it to become one of the top five most valuable companies. As of 31st September 2012, Google had a market valuation of $250 billion and was ranked as the second most valuable tech company after toppling Microsoft and only behind Apple. At this time, Google’s management launched a plan that aimed at becoming the leader and dominant player in online advertising, a niche that raked in billions of dollars yearly. To achieve this goal, Google adopted an acquisition strategy whereby it acquired several companies that operated in the online advertisement market. This strategy was supported by the argument that acquisitions saved Google a lot of time to develop products and gain a significant market share in different sub-sectors and regions. However, a deeper look into the efficiency of this strategy shows that it was inefficient and poorly thought as evidenced by Google’s failure to capture the Russian and Chinese markets. A better understanding of this case is gained when examined through the lens of publications by Nelson, Martin, and Powers (2008) and Simons (2010).

According to Nelson, Martin, and Powers (2008), a high-quality product and unique technology can enable a company gain a huge market share but only a robust execution strategy can enable a company keep it. A study by Nelson, Martin, and Powers (2008) revealed that about 60% of multinational companies usually have competitive products but weak execution strategies. Applying these findings to Google’s case study, it appears that the failure of Google to gain and maintain a significant market share in China was due to implementation of a weak execution strategy. Nelson, Martin, and Powers (2008) defined execution as the overall product of hundreds of decisions that employees make routinely based on the information available and self-interest. In a foreign market with different settings of culture and administration like China and Russia, it was paramount that Google’s management clarify the decision rights, create robust information channels, modify and align incentives as well as make changes to its organizational structure.

In the same way, applying Simons’ (2010) findings reveals that Google failed to achieve its expansion plans because of implementing an untested strategy. Simons (2010) opines that the ingredient to survive an economic downturn is identified and prepared during the good times by carrying out stress testing. A stress test entails an assessment of how an economic system or a business strategy functions under severe conditions and immense pressure. It is well documented that the Chinese market is characterized by protectionist policies that put foreign players at a disadvantage and immense pressure. These features comprise the main reasons why stress testing of a strategy is important. Simons (2010) argued that stress testing allows a business to identify the weak areas and direct more energy to mitigate them. Thus, preparing for tough times allows a business to avoid confusion and inefficiencies during strategy implementation. The issues identified would have helped Google determine whether the company was able to modify and adapt its strategy to the Chinese and Russian markets’ styles over time. Importantly, Google could have determined whether its strategy was improving innovation and commitment hence avoid losses from failed investment.

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Works Cited
Neilson, Gary L., Karla L. Martin, and Elizabeth Powers. "The secrets to successful strategy execution." Harvard business review 86.6 (2008).
Simons, Robert. "Stress-test your strategy." Harvard Business Review 88.11 (2010): 92-100.