Week 3: Case Study: How long will Google magic last?

Case Study: How long will Google’s magic last?

As a private company, we have concentrated on the long term, and this has served us well. As a public company, we will do the same. In our opinion, outside pressures too often tempt companies to sacrifice long term opportunities to meet quarterly market expectations. Sometimes this pressure has caused companies to manipulate financial results in order to "make their quarter." In Warren Buffett's words, "We won't 'smooth' quarterly or annual results: If earnings figures are lumpy when they reach headquarters, they will be lumpy when they reach you." (2004 Founders' IPO Letter)

1)      Would you describe Google’s strategy as more deliberate or more emergent?

Answer: As the search firm’s founder Larry Page and Sergey Brin mentioned “Google is not a conventional company. We do not intend to become one”, I would express Google as more emergent. Google is more like a firm that responds to market and environmental forces and believes in experimentation rather than proposing a long term plan. Resources at Google are allocated for improvement of search and advertisements. The employees are motivated to make decisions and their creativity and practical experiments are accepted too as Google's novel ideas come from people embedded in the company's core operations rather than cloistered in a stand-alone brain trust. 

2)      What are the advantages of being very experimental?

Answers: The advantages of being very experimental are as follows:

i)                    Experiments are more realistic.

ii)                  It increases creativity and generates original ideas.

iii)         It is replicable that gives same results and gives more confidence to implement it     further.

iv)                Works become fun as the employees are allowed to do the work they are interested in.  

v)                  Organization becomes more flexible.

3)      What are the disadvantages of being very experimental?

Our business environment changes rapidly and needs long term investment. We will not hesitate to place major bets on promising new opportunities. ((2004 Founders' IPO Letter)

Answers: The disadvantages of being very experimental are as follows:

i)                    Experiments can be complex and huge that does not guarantee success.

ii)                   They are expensive and uncertain.

iii)                 They do not possess regularity.

4)      What do you think of their strategy?

Answers: The Google strategy is very different and flexible in a unique way. The product and services are varied according to the type of customer. This helps the firm to adapt in the fluctuating market. Google believes on its employees and knows how to keep their employees happy. They encourage their employees financially and also by making their work fun and interesting. Likewise, they know how to deal with its competitors. They make products that are user friendly and are easily accessible. Customers get highly satisfied by the information they provide via its search. Thus, their strategy will help them to flourish and design a path to grow profitably. 

References:

2004 Founder's IPO Letter. An Owner's Manual for Google Shareholder [Online] Available at: http://investor.google.com/corporate/2004/ipo-founders-letter.html (Accessed on 12 March 2013)

The Economist Dec 2nd 2010. [Online] Available at: http://www.economist.com/node/17633138 (Accessed on 12 March 2013)