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Read about the core competencies at Google. What drives it? What makes Google so successful. What is the core culture at Google Inc? Take a look at the Google SWOT analysis we have done for you. Feel free to use this essay for your assignments and homework. Our online assignment experts provide 24 hours homework help and you can contact us by chat, email and WhatsApp any time of the night or day.
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The concept of core competencies was first identified by C. K. Prahalad and Gary Hamel in 1990. According to Prahalad, C. K. and Hamel, G. (1990), an organization’s collective learning and coordination and integration ability to bring together various production skills and technology streams create its core competencies. They say that core competencies also reflect in the proficient organization of work and delivering value in both services and manufacturing. In the new business environment, organizations need to present themselves as portfolios of competencies rather than portfolios of strategic business units (SBUs). Prahalad and Hamel have also said that three conditions or tests can be applied to identify the core competencies of an organization namely; (1) if they provide the organization with potential access to a variety of markets, (2) if their contribution to benefits to the customers from the end-products is significant and, (3) if they are difficult to be imitated by competitors. The process of creating and developing core competencies also includes benefitting and taking advantage from strategic alliances as well as establishing new competencies that are in the nascent stages of evolution in existing businesses. The core products of a company are what connect the core competencies with end-products, incorporating within themselves one or more core competencies of the company. The authors, Prahalad and Hamel say that stand-out global brands are built by efficiently and rapidly multiplying core products with core competencies of the company.
Core competencies of an organization can be attributed to those resources and capabilities that make it stand out in the market and give the company a strategically advantageous position against its competitors. Core competencies can be defined as the result of the company’s resources along with its competitive advantages, knowledge pool and technical capabilities that help it in gaining a competitive position in the market (Twin, A., 2019) where similar businesses exist. The areas of business and operations in which the company is capable of performing the best and even better than its competitors, making it distinguished in the market are what comprise its core competencies. Bain & Company (2018) defines core competencies simply as a company’s inherent high proficiency enabling it to deliver unique and better value to its customers. Thus core competencies help the company in achieving sustainable advantage over the competition and entering a cross section of related markets. The ultimate test for a core competency is that it should be extremely difficult to be imitated or procured by the competitors.
The core competencies of a company are used to:
Basu, C. (2019) has identified four important core competencies of successful companies based on key internal strengths and investing in customer oriented capabilities. These important core competencies are:
Founded in 1998 by Sergey Brin and Larry Page, Google started off essentially as an internet search engine. Google receives and processes more than 70% of all search requests globally, which makes it one of the most recognized internet services company (Hosch, W. L. and Hall, M., 2019) in almost every part of the world. Google uses proprietary algorithm to process the request and display the most relevant results from billions of individual web pages. Having started as an online search engine, today Google offers more than 50 cutting edge and technology driven products to its global customers and users. Some of the most popular and widely used Google products are its search engine, Email service, interactive maps, document creation and storage software, and video streaming service. The original product of the company- the Google search engine still remains its top product and the key to its success. The company acquired Motorola Mobility in 2012 which gave it the opportunity to enter the lucrative mobile handset market. Google is recognized among the most influential technology companies in the modern market along with IBM, Microsoft and Apple.
Google became a part of the holding company Alphabet Inc. in October 2015 (vault.com, 2019). Most of Google’s revenues are generated through ad sales. Google earned revenues to the tune of $33.7 billion in the third quarter of 2018, which was about a 21% increase from the corresponding period in 2017 (Rosenberg, E., 2018).
Without a doubt, ‘Innovation’ is the primary and most important core competency of Google right from the very beginning of the search engine. The company was founded by two Stanford University undergraduates, Sergey Brin and Larry Page in a dormitory room on the idea of infusing innovation and new thinking process into the traditional internet search models. The idea of ranking websites on the basis of number of links attached to them was unique at the time and most search engines used the appearance of search phrases as the basis to rank websites and showed results accordingly. Google provided more useful and relevant search results to users through its innovative algorithm and started gaining popularity among internet users. This brought the attention of many investors to the company and it grew at rapid pace starting from mid 1999 when it received and processed around 500,000 search requests per day. According to Hosch, W. L. and Hall, M. (2019), Google handled around 3 billion search requests per day at the end of 2011.
Some of Google’s top innovations which made the company a global giant and put it in a leading position in the internet services market are: (1) auto-complete, (2) translate. (3) maps and navigation, (4) universal search, (5) mobile and new screens, (6) voice search, (7) actions, (8) the knowledge graph, (9) customized information, and (10) intuitive reminders and answers, according to Goldman, D. (2014).
All the other core competencies for the company revolve around the key core competency of innovation, which can be a good thing for Google as well as a drawback at times. To understand this better, we should take a look the core product of Google’s business which is its search engine. More than 70% of global internet users use Google for their search queries on the internet every day. This is because they rely on the quality of the results shown by Google. Google delivers quality because of its innovative algorithm and continuously evolving technology aimed at producing intuitive and accurate search results. Thus, this leverage of innovation is used by Google’s other core competency- quality and reliability. Now, if Google stops investing resources in innovation, its quality and reliability will surely take a hit due to the rapidly evolving consumer needs. Add to this the growing competition in the internet services market, and we will see a decline in consumer satisfaction and ultimately the company’s profitability. Therefore, it is of critical importance for the company to maintain its innovative brand image in the market to sustain its business which has already been affected to some degree by the lower than expected or even negative result from acquiring Motorola Mobility.
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Strengths: As noted earlier, Google’s entire business is based on innovation and technology. The company is a pioneer of intuitive and smart search engine innovation, which has made it a highly regarded and reliable internet services company. The company employs highly skilled, talented and knowledgeable workforce across its offices globally which gives it a competitive advantage against many of its younger rivals and competitors. Google has integrated technology in all its operations very effectively which helps in creating advanced products and streamlines its business operations seamlessly. Most of Google’s products and services are highly flexible and customizable which different users can use according to their own personal requirements. All of Google’s products use smart algorithms which understand the needs of individual users and can be modified accordingly, making them highly user-friendly. Innovation clearly gives Google a massive competitive advantage over others. What makes it an even greater strength is that most of these innovations are patented and very difficult of imitate.
Weaknesses: Many of the core competencies of Google are dependent on innovation which can have some drawbacks as a lack in innovation or technological errors can seriously impact other core competencies and even the whole business of the company. For a big company like Google which deals with sensitive user data all the time, data safety and security are a major area of concern. There have been instances in the past where consumer data have been compromised or leaked due to fault in security and insider activity. This can seriously harm the image of the company and consumers may shy away from using its products due to security risks.
Opportunities: The opportunities for Google are immense in the internet and related services market due to the extensive and rapid growth of the internet. Millions of consumers are being added daily to the web and there are numerous growth markets in the developing world presenting huge potential for the company. The Android devices of Google have gained immense popularity since their launch in the late 2000s. These devices have become synonymous with mobile connectivity in many parts of the world, especially in the developing countries. The company can also benefit from its loyal consumer base which sticks with Google due to its reputation as a customer oriented company.
Threats: Over the recent years, as the cost of technology has reduced remarkably and become more accessible, many new companies have emerged in the market with similar products and services, making the market very competitive. All tech companies including Google need to be at their best at all times to stay relevant to the market requirements. Any slackness can cost market share and the business can even face the risk of becoming obsolete and becoming irrelevant for the consumers. Technology also brings with it the threat of becoming obsolete very quickly due to fast and continuous innovations. Many technologies and related products are also subjected to trial and error method and customer feedback before being fully adopted and introduced to the public. This increases the cost of technology and leaves little room for errors.
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