INTRODUCTION The emergence of Internet enabled a low cost of information sharing and dissemination, independent of the existing distance between the producer and the consumer of the information. This new environment allowed access of a growing number of individuals and customers to new kinds of businesses that has been continuously revealed. This novelty is changing the environment where corporations, governments and communities interact. The changes are, especially, in the way information is received, processed, sent and stored. In this new environment, speed, flexibility and innovation are essential. (Winfried Lamersdorf, 2004)
The Novelty of bringing out new products into the market with innovates ideas and upgrading it self according to the current market needs with a break through in getting any information on WWW (World Wide Web), Smart Phones and placing it self in various market segemets helped Google to be a Strategic Marketing Planner and to be the among the top most businesses in the dot com industry. Planning Process: There are various formulations of planning process (Boyce et al, 1970; Lichfield et al., 1975; Harris, 1965). Like (a) the formulation of objectives in relation to the general goals, problems and the regional context; (b) the provision of an outline of alternative strategies of growth; (c) the testing and evaluation of alternative strategies; (d) decision making.
Lynch (2000) explains that every organization has to manage its strategies in three key areas: The organization’s internal resources, The external environment within which the organization operates, The organization’s ability to add value to what it does and other core elements include clarification of strategic direction , strategic analysis, development of strategic options, strategy implementation and management of strategic change. Traditionally, Google relationship between these areas has been viewed as Linear, with strategic analysis which includes a position to audit where various aspects of the organization are examined and analyzed, including the organizational objectives, organizational relationship with the environment, organizational resources. Google ‘s Strategy development a Varity of options
for the future development of organization have to be built, reviewed and selected have implementation of selected options . Lynch (2000) describes the linear approach to corporate strategy as a prescriptive approach to decision making. He contracts this with an approach that he describes as the emergent approach, where the three core areas are interrelated Prescriptive Vs Emergent approaches: Prescriptive approaches: Reliant on the use of analytical tools such as SWOT and PESTLE, and matrices such as Boston Consulting Group Matrix (BCG).Most efficient approach where business environment is stable. Planned approach based on linear step process for implementation. Emergent approaches: A responsive approach based on shared understanding across the business. Based on organizational learning. Most effective in conditions of economic and environmental uncertainty. Google strategy formulation closely related to product development options is the review of opportunities from new business. As new business constantly reviewing innovation in the services to improve the quality of experience offered is important for organizations like Google.Evaluting new models and approaches is important . If Google do not review opportunities to innovate then competitors and new entrants certainly will. Andy Grove of Intel famously said: ‘Only the paranoid will survive’ and Google constantly innovate through acquiring other companies. For example Google purchased linguistic analysis company applied (Semantics in 2003) to improve its search results algorithm; it developed social networking site Orkut (http://www.orkut.com) and Google Earth.
Google is pursuing a growth strategy of merges and acquisitions with other related businesses. This strategy is preferred because it allows Google to quickly adopt new technologies and process rather than trying to develop them internally. Given the rapid changes the industry is undergoing, timing is critical. Acquisitions and partnerships make more sense.
Factors which are contributing effective Google strategy implementations are its highly talented leadership team and work force. The strength of its culture that emphasizes teamwork, flexibility, transparency, and innovation. Its structure there is little in the way of corporate hierarchy. Its aggressive hiring policy it is not discriminatory and favors’ ability over experience. Market Position and Strategy: The advantages of being first into a market are well known, but the risks can be high and the costs of failure great. Google could never be defined as an example of a first time mover. By the time it entered the market, searching was considered a commodity. But Google is now considered one of the most popular sites on the web. Google success stems from its use of the link structure of the web to determine what is important and what is not. Unlike its competitors it chews banner ads; instead it offers advertisers the option of buying discrete text ads which are only shown when users search for certain words.
Google external environment keeps changing and with it comes opportunities and threats. Google has to contribute to anticipate changes and adapt strategies, systems, cultures, and process to align with such changes. Some of the changes that Google has undertaken so far include the decision by Larry page to step down into VP role and let Eric Schmidt be the CEO and front Man for Google, as well as the decision to make many acquisition of companies at different stages of development. So far, Google has acquired more than 50 companies. Every acquisition brings in a company that may be different in its way of doing things from Google. Being able to merge these companies under Google culture and achieve the kind of results that the company is getting so far is a mark of effective change implementation (Robert N. Lussier, Christopher F. Achua)
PART – A (2) All business decisions have a financial ingredient. Financial analysis and management is a key skill set that all facility managers must have. It is important for a facility manager to push the services and new idea to forefront organizations like Google and agendas by using accepted financial metrics and analytical tools for its growing business. Google needs financial analysis tools to perform evaluations and budgeting. Here is a list of financial tools which needs to be considered:
1. Simple payback(SPB) 2. Life-cycle costing (LCC) 3. Return on Investment (ROI) 4. Activity based costing (ABC) 5. Total Cost Ownership (TCO) 6. Return on Net assets (RONA) Each financial tool provides value and insight in a specific application. The history of these financial tools has evolved towards higher and higher stakeholders. The financial tools that are commonly used are: Cost benefit analysis Payback periods Risk and return Internal rate of return Present Value analysis Return on asset (ROA).
Profitability: Return on assets, or ROA, tells what percentage of capital invested in business is returned as profit. Every business puts assets to work: cash, facilities, Computer Equipment. A Search engine company like Google may have a lot of capital tied up in Technology creation, Advertising, Innovative user interface products and this Google business have expensive computer and Telecommucations systems. ROA simply shows how efficient the company is at using its assets to generate profit. Pay back method: Pay back method is an appraisal method. It’s a method which compares the predicted cash out flow and cash inflows relating to new investment options. Costs and income savings are analyzed over a consecutive period until to a point is reached. Where the forecast cumulative costs of the new project are balanced by the cash inflows that the project is expected to generate. Cash Flow & Liquidity: The Company in its trading operations creates liquidity through the cash, paying for new technology, hiring and other resources, converting them into user interface services or provide services for sale and in return obtaining payment from the customers. A profitable company with a regular flow of trade should be able to remain liquid, and accumulate cash surplus from its profits. NPV Net Present Value: Net Present Value (NPV) is a concept .In order to make an investment decision about the project, this NPV should be computed which is the difference between the present values of proceeds and expenditures related to the project and invest if this difference is positive. Margin of safety: A margin of safety does not guarantee an investment against loss; it guarantees that the probabilities are against loss. And their will be a control over risk. As to which strategy to implement.
Ansoff Matrix: Ansoff Matrix can be introduced here as a useful tool for thinking about marketing objectives and this situation can be simplified to two dimensions only products and the markets. Ansoff framework is about what is sold (the product), and who is sold to (the market) with in this frame work, Ansoff identifies four possible courses of action: Selling existing products to existing markets Extending existing products to new markets Developing new products for existing markets Developing new products for new markets. Below is Ansoff Matrix framework:
Increasing Technology newness PRODUCTS Present Increasing Present Market Newness MARKETS
Market Extension Diversification Market Penetration
Source: Adapted from Malcolm McDonald, (2007). Marketing Plans, p280.
Thus, from the above figure it can be said that in the long run, it is only by selling something
(a product ) to some one (a market ) that ant firm can succeed in staying in business profitably , It means the route chosen to achieve company goals through rage of products it offers to its chosen market segments. Thus the product/market strategy represents a commitment to future direction for the firm. Boston Consulting Group (BCG Growth Share Matrix): It’s an analytical tool which is used in product portfolio analysis. By selecting to measures of product performance (Market share and Market growth) and evaluate like the attractiveness for going into a new market.
? Question Mark Innovation at the research (launch) phase or being tried out by other industries, having uncertain but promising differentiation potential.
Star Innovation being tested (growth); potential for differentiation is great and will impact the company future.
CASH COW Innovation being operated or in the Maturity phase; strong competitive impact
DOG Innovation exploited extensively by the company and its competitors (decline phase); Low competitive impact.
Source: Adapted from Organization for Economic Co-operation and Development, (2006). Innovation and growth, p94. Google can always be a good example of a successful high grow company that’s manages quantum & incremental innovations and they continue to both surprise and delight the market with novel new products beyond Google search. These include Google earth, Google desktop search, Google Image, Google 101 cloud, Google renewable Energy cheaper than coal, and Google Android mobile software, And many more innovations in the pipe line, Like any other
company Google could be faced with luxury of imbalance towards quantum innovation, which may mean that their resources for incremental innovation to maintain the market share for their existing products are heavily stretched. The increasing diversity of their business model will also likely present some challenges to Google in future.
PART B Global Accounting software in Business –to- business market to explore the new markets:
B2B is specifically business to business e-commerce, it the umbrella term used to refer to transactions between businesses conducted online, and the business networks and supply chains that make these transactions possible. B2B market in this context referred to organizational markets. Strategic Planning: Strategic planning requires the organization’s intimate and enthusiastic involvement, formal and informal teams, in providing information, making decisions, and successfully implementing the software. Strategic Planning process flow chart
Planning Base Results Required How Implementation Review
Internal Assessment External Assessment Assumption Priority Issues
Objectives Programs Delegated programs
Where are we now?
Where do we want to be?
How will we get there?
Who must what?
How are we doing?
Source: Adapted from C.Davis Fogg, (1994).Team-based strategic planning: a complete guide to structuring, facilitating, and implementing the process, p4.
The key elements for implementing this strategic planning process can be through external assessment. The main area for opportunities and threat will be markets/customers, completion, Technology, Economy, Government/ Political.
Internal assessment (Areas for strengths, weakness, and barriers to success. -Culture -People -Organization structure -systems -People -Management Practices
Other key dimensions are: Cost efficiency, Quality, Service, Technology, Market segments/performance.
The Porter Five Forces: The porter five forces is primary framework for assessing quality of industry markets and determining points of departure for the improvement of comeptivte strategy (Porter 1991, p.97 ff.) Using the Five forces model to carry out structural anaylsis in the following steps: (A) Definition of Market to be analyzed (B) Description of the current competitive situation (C) Predication of the development of the competiveness forces and the changes this will bring in competitive intensity Then the competitive factors would be: 1. The bargaining power of buyers 2. The bargaining power of suppliers 3. The threat for new entrants 4. The threat for substitute products 5. Intensity of rivalry between firms This order is to be preferred because of the interdependencies between the factors. A firm compete by building superior value in the markets either through clearly differentiating their products from the competitors, or by focusing on the one particular B2B market segment and
competing by adding value to the product though internal customers with the organizations . A strong marketing orientation firm with product in B2B market shows a wiliness to evaluate and re-evaluate opportunities and challenges in the global markets. And build the capability to maintain their competitive advantage over a period of time, by reacting positively to the strategic challenges faced.
The Factors for successful marketing company are
1. Number of new customers per year; 2. Number of lost customers per year 3. Hire and retain excellent employees, which measures by employee turn-over, job vacancies, customer satisfaction. 4. Successful new product introductions which measured by sales and costs. 5. Successful promotional programs which is also measured by sales and costs 6. Good/healthy financial indicators: for example, working capital, acceptable ratios (in particular debt to equity ratios), profit margins, cash flow, receivables and more; 7. If in the manufacturing industry, high operating capacity utilization; 8. Strong supplier network 9. Strong distribution network or channel 10. Successful product positioning 11. Low cost structure 12. Niche product/service - track the number of competitors entering and/or leaving the niche. Is the cost of entry into the market high or low? 13. Market leader or follower or challenger, and is your relative market position and why? Are you able to support that position if under 'attack'? 14. Product differentiation: Do you have technology or service advantages that others can't easily copy? How unique and differentiated is your product or service? 15. Time to market: is your product or service able to be delivered quickly and easily; from the first point of contact to the time shipped and subsequently invoiced (Kris Bovay - EzineArticles.com)
REFERENCES 1. Ansoff Matrix Malcolm McDonald, (2007). Marketing Plans, p280. 2. Bola Ayeni, (1979), Concepts and techniques in urban analysis. Taylor & Francis 3. BCG Growth Share Matrix, Organization for Economic Co-operation and Development, (2006). Innovation and growth, p94. 4. Kris Bovay, http://ezinearticles.com, available at http://ezinearticles.com/?Build-aSuccessful-Marketing-Plan---15-Key-Business-Success-Factors&id=2156709 , accessed on 01/08/09 5. Lynch (2000), http://upetd.up.ac.za , available at http://upetd.up.ac.za/thesis/available/etd-03202002-122729/unrestricted/03chapter3.pdf , accessed on 01/08/09. 6. Porter Five forces, Rudolf Grünig & Richard Kühn, (2008). Process-based strategic planning, Springer, p145 7. Robert N. Lussier & Christopher F. Achua. , (2009), Leadership: Theory, Application, & Skill Development, Cengage Learning, p434. 8. SWOT, PESTAL & BCG, http://www.unisanet.unisa.edu.au available at http://www.unisanet.unisa.edu.au/resources/12271/SMA Online/Course Resources/SMAstudy-guide29June.pdf , accessed on 01/08/09. 9. Sementics 2003, http://www.sitepoint.com , available at http://www.sitepoint.com/article/engine-year-review-2003/ , accessed on 01/08/09. 10. Strategic Planning, C.Davis Fogg, (1994). Team-based strategic planning: a complete guide to structuring, facilitating, and implementing the process, p4. 11. Winfried Lamersdorf, (2004), Building the E-service society: E-commerce, E-business, and E-government, p3.