Google or Alphabet was founded in 1995 by Larry Page and Sergey Brin, Both of them attended Stanford grad school initially the search engines name was BackRub. Their first office was a garage in a suburban neighborhood owned by Susan Wojcicki who is the current CEO of YouTube which is another subsidiary by Alphabet. Google They now have hundreds of products mainly software related. The full form of google is Global Organization of Oriented Group Language of Earth and also the number googol. Their services range from Gmail to their google pixel line and android being an operating system.
PEST Analysis of Google
Due to politically unstable situations in countries like China google is unable to fully utilize these markets fully, therefore limiting growth. China is the largest country by population as of 2020 thus google is losing one of their biggest customers Huawei. This also hinders some of their work in their US operations. Due to the U.S having a high corporate income tax google stores their money in foreign countries however recently there has been pressures to bring the money stored abroad back into the U.S this could negatively impact their cash flow. Furthermore, google is accused of having a monopoly by Europe leading to antitrust action thus there is pressure to change the way they give search results.
Due to the US being a fairly stable market that keeps growing over time this is a very beneficial for google as they can tap into other newer markets to increase revenue, moreover there is a concern regarding Alphabets huge stock cash that has been kept abroad. However this makes it vulnerable to exchange rates as keeping money abroad would mean converting back into the US dollar again therefore if the US dollar were to be weaker than the chosen currency they would lose money when they exchange for a weaker dollar.
Due to the increase of social medias such as Facebook, Instagram, WhatsApp makes the situation volatile and unable to predict the future. Google having been accused of ‘Selling’ its users information there has been controversy regarding this matter along with people opting to keep their information more private there is an increase for privacy-based search engines such as DuckDuckGo this is something google has not yet provided as a feature this gives a threat. Google has gotten good at being a website search engine but has not successfully gone to other segments of this market such as the shopping search market where 30% of users start at amazon. Along with people being more aware of their privacy in the long run google may lose customers to companies who are privacy focused.
The rise in internet usage in developing countries this provides an opportunity for google to enter these markets in addition to this due to the shift in use from desktops to mobile devices more and more manufacturers of these devices have made proprietary searches such as apple or Microsoft which uses Bing search. Even more competition is faced when apps are made by these companies in order to go to the website without visiting google. The integration of voice search with other services such as Facebook and Amazon by Amazon Alexa poses a threat towards googles long dominance. Along with the rise of new smear speakers. However, Google has its own smart speakers this has opened up a new market for this.
Major Challenges for Google
Google as a company has been labelled as not being an ethical company for hindering their search results in their favor thus making it seem that google is highly anticompetitive. The US law enforcements have been keeping an eye on google as well. Both the Department Of Justice and the Federal Trade Commission are both participating in an anti-trust probe of the company. Not to mention even in the EU google is being investigated under their anti-trust commission. Moreover, google has been found in A wall street journal study to be interfere with their search engine resulting in the algorithm favoring big businesses over smaller ones.
In June of 2019 a shareholder meeting was bombarded with its handling of sexual harassment allegations along with their work with China to build a censored search engine given the code name ‘Project Dragon Fly’ however google ended this along with ‘Project Maven’ a contract with the military to review drone footage when such plans are let go some employees are let go as well thus this leads to an unsure and skeptical workforce that may end up being more in efficient in the long run.
If in the future suppose Google were to decide to expand into China further with a regulated search engine this could be made very troublesome due to the current tariffs between China and the US this leads to uncertainty in one of the biggest markets in the world not to mention major competitors of google come from China. Huawei uses to be one of the largest Chinese consumer of android however the recent phones cannot have a updated android system.
Recommendations for Google
Based on the source of many of these problems in my opinion can be attributed to googles secrecy thus it leads to long term consequences such as ‘Project Dragon Fly’ releasing a regulated search engine to China which is bad for publicity. This also leads to contusion among investors and an individual looking to invest in google may turn away due to their nature in being unable to detail with clarity why it missed its quarterly earnings in 2019. I would suggest Google to be more transparent in their actions along with that take care of employee harassment cases more seriously, ignoring these will damage Google’s public image and be labelled further as a bad employer. Many of there factors are external factors except for employee skepticism I would recommend google not to take short term projects that could reduce employee morale when they are let go or transferred away. Therefore, if this is applied well this may increase long term efficiency amongst employees.