Google’s Competitive Strategy
Porter’s four generic strategies features a model represented in four squares. Basically, it consists of two basic types of competitive advantage that a firm can possess, and the activity scopes that the organizations needs to use to aid in achieving them (Gurǎu, 2007). Therefore, the first square represents cost leadership, the second square represents differentiation, and the third square represents cost focus and differentiation focus. This third square has been divided into two to cover the aspect of “focus”. Through cost leadership, an organization seeks to be low cost producer in the industry. This requires the exploitation of raw materials that will enable it to maintain low costs so as to maintain its customer base. Under differentiation, a firm strives to become unique in its industry. This may be through the products it offers or even along other customer valued dimensions. In the focus strategy, a firm identifies a specific segment of the industry and works on serving this segment to the exclusion of others.
The competitive strategy of an organization determines its value chain structure in that the organization will have to use a specific structure to enable it to achieve its set strategy. For instance, when an organization chooses to use a differentiation strategy, the value chain structure will have to be unique so as to guarantee higher product value (Gurǎu, 2007). Similarly, if cost leadership is the strategy, the organization will have to make use of a value chain structure that will ensure the production uses the minimum cost possible.
Google’s competitive strategy can be well understood with the use of porter’s generic strategy. First, Google has made use of the differentiation strategy in that it provides a wide range of products and services (Gurǎu, 2007). Thus, it functions in different industries all at the same time. Second, Google has managed to maintain cost leadership by ensuring that its products are unique and of high value compared to others in the various industries it operates in (Gurǎu, 2007). The resources are of high value, rare, in-imitable, and non-substitutable. Lastly, depending on its specific products and services, Google has keenly applied the use of the focus strategy. It specifically concentrates on particular market niches and ensures it strives in them (Gurǎu, 2007).
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