FORMATIVE TASK: CASE ANALYSIS OF ALPHABET INC.
Table of Contents
In terms of international business strategies, Alphabet Inc has been able to implement the concept of business diversification, where new products are consistently been brought to the consumer’s attention and associated services are being provided on a regular basis to the consumers, accordingly (de Bustos, 2019). The core business strategy of Alphabet Inc states that the initiation of their search engine and then the constant portfolio expansion of the company has been consistently been conducted. Starting from providing a wide range of products and then services accordingly including self-driving cars or even cameras, thermostats and many other products have been supplied by the company in all these years. The rapid growth of the company Alphabet Inc lies in the fact that the company is able to generate massive revenues with the involvement of successful business acquisitions (Moniz, 2017). Between 2015-16, Alphabet Inc has been reportedly made around 220 companies and 35 acquisitions, something that had been able to increase the efficiency of the giant company, while allowing the internet giant to proficiently integrate their corporate culture to all the new business that they acquire have considerably been one of the solid and credible sources of Alphabet Inc’s competitive advantage (Paley, 2019). With the creation of a closed ecosystem, the company has been able to maximize its profits. The aspect of having a collection of a wide range of interconnected services, and the aspect of applications, have allowed Alphabet Inc to have their consumers enter their eco-systems effectively (Abdellahi, 2017). Within a few years of business developments, the company has been able to have additional services, something that have contributed to the development of a wide range of products that the consumers of Alphabet Inc got to use.
Having a separate division other than Google, Alphabet Inc has been able to provide internet-related products and services where involvements of ambitious innovations where the aspect of smart appliances, involvement of artificial intelligences, smart appliances and different capital venture that have been conducted and initiated by the company over the years (Kaschny and Nolden, 2018). The prospering business through the involvements of leadership where the element of independence is something that gets involved, where the strong CEO model is one of the international business strategies that have been refined and improved time and again by Alphabet Inc. Organising all the information of the world, while making sure that the information is available, accessible and affordable and even useful to all the people across the communities in the world (Skulski, 2020). The aspect of market penetration as one of the intensive international strategies that have been developed by Alphabet Inc. Acquiring more consumers effectively from its current markets while already having a leadership positions, is something that had been a consistent international business strategic development (Yeon, 2018). A continuous strive for a bigger market share while having an intensive strategy in the element of market penetration, is something that the company has been able to have to have effective international business developments. The involvement of competitive products and then their consistent innovation of the same had allowed the company experience competitive advantage in the aspect of market penetration; something that allows the company to have better market share (Moniz, 2017).
The analysis conducted below has involved Alphabet Inc where the theoretical understandings of PESTEL have been considered to effectively come to an understanding of macro-environment of the company and then effectively identify the areas of opportunities and the areas of threats (Pomykalski, 2019).
| Political | Economic |
| o The aspect of globalisation
o Having a stable political climate in most of the major markets (in terms of opportunities) o The companies sponsored by the states (in terms of threats) o The establishments of the anti-counterfeiting trade agreements o The growing political issues emerging in terms of the cheap labour and poor wages (Lalić et al. 2019) o Having good international relations in terms of the trade (opportunity) o The existing commerce infrastructure has also been politically motivating o The developments of trade sanctions o The emerging trade reluctance with certain regions
|
o Having economic stability in most of the markets causing
o The aspect of rapid growth of the countries both thee developing and developed (Trautman, 2018) o The increasing amount of sustainable business interests o The aspect of having focus on highly targeted measurable advertising makes the makes the business strategies and the business in general recession-proof (Teece and Linden, 2017) o Since the internet-based advertisements have become a staple to the world and that in a way have been able to isolate the company and their business to stay away from any sorts of recession (Skulski, 2020) |
| Social/cultural | Technology |
| o The increasing use of social platforms and accessing social platforms to acquire information (Yeon, 2018)
o Increasing diversities in the aspects of the users o With the means of communication, especially with the involvement of the internet and internet-based services, the world is increasingly becoming connected (Trautman, 2018) o The internet capabilities in the contemporary mobile devices, especially considering all the modern innovations of the internet makes the social aspects of the company much more beneficial |
o The consistent growth in the use of internet, especially in the developing countries
o The rapid sense of developments of having an efficient adoption of mobile technologies and mobile devices, especially in the areas of the global markets (Tom, 2020) o The specific considerations taken by Alphabet Inc to consistently ensure that they do not fall behind in the growingly competitive market is allowing the company to consistently improve (Wirtz, 2019) o Despite the geographic differences the aspect of internet searches is applicable to nearly everybody or to any sorts of communities across the community |
| Legal | Environmental |
| o Having increasing amount of regulations in the online privacy
o Having increasing amount of regulations on intellectual property o Inflexible labour laws or even the security of the same (Pomykalski, 2019)
|
o The consistent climate changes occurring global (Kaschny and Nolden, 2018)
o The emerging effects on distributions costs happening because of the energy wastes (Trautman, 2018) o The aspect of carbon footprint is something that has been a major aspect, especially in terms of the GHG emissions and CO2 o The aspect of reserving natural resources o The usage of implementing environmental sustainability into the business activities has been a considerable business strategy (Glowik, 2017) |
From the PESTEL analysis conducted above, some of the most key opportunities and threats have been identified. In terms of the political opportunities, the aspect of wider free trade agreements that Alphabet Inc managed to have, resulted in varying opportunities for the overall developments of the company. In most of the major markets for Alphabet Inc, the aspect of stable political scenario has been another opportunity-oriented area, that have helped the company to grow and the macro-environment to find credible improvements overall (Kaschny and Nolden, 2018). The aspect of economic stability has been a major area of opportunity in most of its markets, alongside the rapid growth in the developing countries have been a major improvement and an overall development to have better economic opportunities for Alphabet Inc. The decreasing costs of the renewable energeias have been another aspect of opportunity that could potentially be helpful for the overall international business strategic developments for Alphabet Inc. Increasing use of social platforms have also brought various business opportunities for the company by bringing numerous acquisition opportunities and customer reach overall (Kutera, 2017). The emerging and increasing amount of consumer diversity is also another opportunity that had contributed to a better revenue generation and overall financial improvements of the company. Some of the key threats that have been identified with the PESXTEL analysis are use of personal data have been receiving a lot of criticisms in the international business platforms, something that could potentially be threatening to their business (Bilić, 2018). State-sponsored online companies could also be threatening for Alphabet Inc sine that does increase the aspect of competitions as well. The aspect of growing restrictions on using consumer personal information have also been threatening for a company like Alphabet Inc.
Some of the key opportunities in terms of the technological factors of the company has also been a relevant factor. The aspect of growing internet access in the developing countries have been an area of opportunity something that resulted in the improvements of the company reach. With the intervention of the internet, the range and diversity of users have drastically changed and increased (Bilić and Prug, 2020). The adoption of mobile services in the global market with a rapid growth have also increased the areas of opportunity for Alphabet Inc since that increases the aspect of how the company is able to have an international reach (Barrón-Cornejo et al. 2020). The growing amount of cloud users worldwide have increased the opportunity for Alphabet Inc for their internet-based services and products to have a global reach altogether. The continuous support for the aspect of environmentalism for giant tech corporations or internet-based companies like Alphabet Inc have also created various opportunities (Anderson, 2019). The growing amount of interests amongst the suppliers for the sustainable business have also been an influential aspect and have created many opportunities for the company overall. Then increasing amount of online privacy is also creating opportunities for Alphabet Inc in terms of creating consistent securities for Alphabet Inc’s all of their internet-based products and services. The aspects of imposing stronger regulations on intellectual property rights have also been a potential area of opportunities for the overall business strategic developments of the company on a global level (Abdellahi, 2017).
Based on the analysis of the internal environment, the company has a set of key strengths and weaknesses something that have been identified in the course of its assessment. These areas of strengths include, Alphabet Inc being one of market leaders in the search engines, suggesting that the domineering space of the company along with Google have a massive market share overall (Yeon, 2018). Having more than 50% of the market share, Alphabet Inc is able to integrate the experiences of the search engines like Google and with that they allow these massive companies to have a lion share of the internet searches worldwide, something that makes extremely difficult for their competitor to even get involved in any sorts of competitions with Alphabet Inc. The ability to generate internet traffic is something that has been another aspect of Alphabet Inc where they are able to generate unique searches, reportedly above 1.2 billion, something that the users perform using the search engines. This alone provides an unparalleled edge to the company over their competitors and allows them to gain competitive advantage (Wirtz, 2019). Garnering massive profits with the involvement of partnerships have held the company in a good business place something that has been a consistent amount of business strength for the overall development for the company business overall on an international level. Then entire revenue model is built in that way where the aspect of partnership has been implemented with the help of methods like ad sense or ad revenues, have helped the company to gain business strength. The aspect of adopting mobile technologies and android tech have been also extremely effective and have helped the company to gain a competitive advantage overall (Trautman, 2018).
Some of the key weaknesses that have been recognised from the internal environment analysis overall, where the excessive reliance on the aspect of secrecy have also been an area of weaknesses. With the growing amount of secrecy and the association of secrecy, the company has been keeping things quite confidential and opaque for their consumers and have been hiding behind the veneer of secrecy (Tom, 2020). The aspect of falling ad rates have been something that had contributed to the developments poor revenue generation and the declining financial gains for the company. With the ongoing global slowdown, the aspect of company competitors has severely snapping their economic status and with that the company has not been able to have any substantial developments in terms of economic developments, especially in terms of the economic aspect (Teece and Linden, 2017).
Some of the key opportunities, based on the internal environment analysis have been a consistent business insights that have been acquired of Alphabet Inc. based on the internal environments analysis, it has been found that the adoption of android technologies and mobile tech have been another aspect of opportunity that had helped the company to effective expand their business areas effectively (Skulski, 2020). With that the company has been able to become a direct competitor of the mobile and android companies. In order to remain profitable, the company has to diversify their non-ad revenues something that had been another major aspect of opportunities for the overall business developments. With the consistent push towards the commercial transactions, the company has been able to have better profit generation and created a wide range of opportunities for the company (RICHTER, 2017). With digital and internet-based products and services the company has been able to create significant business opportunity for themselves which had led the company towards taking an evolutionary leap into emerging world of Nano-computing and smart technologies and services that are ahead of their time. The aspect of cloud computing has been a key opportunity for both Google and Alphabet Inc something that had led to the overall developments additional data and personal information storage information for their consumers and provide cloud solutions accordingly (Pomykalski, 2019). The aspect of acquiring massive profits with the involvement of partnerships have held the company in a good business place something that has been a consistent amount of business strength for the overall development for the company business overall on an international level. With the falling ad rates have been something that had contributed to the developments poor revenue generation and the declining financial gains for the company (Paley, 2019). The areas of threats have also been identified with internal environment analysis and that suggests the growing amount of competition from other internet-based product manufacturers and search engine providers or even other android technology infused companies that have been able to penetrate the market in the same way that Alphabet Inc has been able to. The aspect of mobile computing has been another business threat that have developed some sorts of business complications for the company. With the aspect of emerging mobile computing, it seizes the opportunities of the company to ramp up their presence in terms of the mobile computing something that affects their international business strategies overall (Moniz, 2017).
A specific set of strategic options that have been recognised for Alphabet Inc and that includes the aspect of strategic alliances with the other companies. Fighting with their equals would only disrupt their marketing developments and would also restrain their dominance in innovation. Instead, creating strategic alliance with these equally potent enterprises would help Alphabet Inc to effectively gain strategic developments in terms of the business (Mazzei and Noble, 2017). By joining forces with their competitors, Alphabet Inc could potentially maximise their business capabilities on a global platform and with that they could possibly increase the values of resources and capabilities of the company (Lalić et al. 2019). By engaging in mutual formal relationship, Alphabet Inc could possibly engage in combined strategic forces to achieve collaborative valuable strategic outcomes and then gain mutually beneficial developments overall. In order to protect the company’s market position, Alphabet Inc is able to develop defensive strategies to effectively gain a competitive position. In order to lower the risks of any sorts of business attacks or any kinds of potential threats in the macro-environment, the defensive strategies by the company would also help mitigate the risks of these potential business attacks. By blocking the avenues and opening up to the challenges and then signalling the challengers that may generate some sorts of business retaliation could possibly benefit the company to have a defensive position to gain a competitive position overall (Kutera, 2017).
The aspect of innovation and then considering the consumer feedback accordingly to make sure that the consumer grievances ae accommodated would also be helpful for the overall developments for the company (Kurtz et al. 2021). By consistently monitoring the consumer feedbacks and then sincerely identifying what they actually wish to have and what is the overall priority for the company and then slowly infusing the same into the overall business strategy would be a helpful strategic option for Alphabet Inc. It would help the company to gain strategic advantage over their competitors to move ahead of them and then generate a much better revenues and eventually have a more consistent global reach with the diverse consumer base (Kaschny and Nolden, 2018). The aspect of expanding the diversification base for the company be another strategic option where the company would be able to diversify into a new kind of business with their existing products into a new business where they potentially offer better business strength and develop a much-improved competitive advantage (Harmon and Castro-Leon, 2018). With the emerging number of competition the company is experiencing a tough complication and threats something that could possibly be avoided with the involvements of diversification, where the company is able to enter different business world by tapping into this new business state and then eventually reposition themselves in that business market by improving their existing features and products or services that they usually offer (Glowik, 2017).
For the short-term developments Alphabet Inc could possibly utilise the marketing tool known as defensive strategy something that could possibly help them have a better business insight and reduce the impact of any attacks from their rival’s end (Figueroa-Domecq et al. 2019). Instead of fighting with their business rivals and going head to head in terms of the business, they could adopt this particular business strategies where they could possibly retain valuable consumers, something that the competitors could possibly take away from the company. Instead of causing business disruptions, this would possibly trade-off to Alphabet Inc’s operations effectively (Feng et al. 2019). Since the company along with Google have a large market base, they could possibly focus on their existing products and services and with that they could concentrate on their market segments and specific geographic areas that they have been so far. Using the existing dynamic capabilities and all the core competencies within the organisation, Alphabet Inc could possibly use their innovation and continue to strive for consistent improvements overall for the long-terms (Feldman and Romesberg, 2018).
In terms of the medium-term strategic choice, the company could possibly adopt the policies and procedures that would help the company to outline their business developments and to ensure that no short-term problems occur. It would also allow the company to have an organizational regulation and the legal states that the company abides by on both national and international levels (Efremov and Vladimirova, 2020). With the strategic developments of the regulations, organisational policies and placements and procedures the aspect of business transactions become comfortably convenient with that. For the aspect of short-term strategic planning, sustainable innovation could be effective for the overall developments. With the aspect of sustainable innovations, the company could possibly have a better implementation of the same (de Bustos, 2019). With the innovations that are considerate of the environmental concerns and raise concerns about the eco-systems, GHG emissions, Carbon footprints or even the overall environmental oriented issues would help the company to have an effective business development strategically, This alone would allow the company to have a better strategic developments in terms of the consistency in the aspects of the innovation and then effectively implement the same into their business strategies and then continue to have a better developments overall. With the aspects of sustainable business strategies, the Alphabet Inc would also be able to have a consistency and the aspect of business longevity would become a relevant aspect of the company overall (Cusumano et al. 2019).
For the medium-term recommendations for Alphabet Inc, the aspect of outlining and possibly securing all the organisational policies and procedures would be really important and necessary for their developments. It is very important that the company is able to create their organisational regulations and have all the policies and procedures for both international and national business transactions ready and consistent (Chu et al. 2021). With that it would allow the company to have a better consistency and then eventually create developments accordingly. Eventually, this strategy would allow the company to have an organizational regulation and the legal states that the company abides by on both national and international levels (Carr and Hesse, 2019). With the strategic developments of the regulations, organisational policies and placements and procedures the aspect of business transactions become comfortably convenient with that. In term of the long-term strategic recommendation, Alphabet Inc would require to have implement their sustainable innovations something that would both benefit their business requirements and as well as benefit the environment and the communities across the globe (Bilić, 2018). Within that it would help them build a consistent organisational environment something that would involve the consumers and all the people working under them considering a unilateral ecosystem something that would be beneficial for the company’s international business developments (Bilić and Prug, 2020). With the aspect of this long-terms strategy, the company would be able to have a better implementation of business strategies that would consider issues such as disruptions in the eco-systems, GHG emissions, Carbon footprints or even the overall environmental oriented issues such as reduction of natural resources or even increasing glob al warming, reducing carbon footprint and then creating business activities considering all these aspects effectively would create a sustainable business developments overall (Barrón-Cornejo et al. 2020). This specific strategy would allow the company to have a better strategic developments in terms of the consistency in the aspects of the innovation and then effectively implement the same into their business strategies and then continue to have a better developments overall while making sure that the consistency and the aspect of business longevity would become a relevant aspect of the company overall (Anderson, 2019). In terms of the short-term strategic recommendations, the advised strategy would be defensive strategy since that would help the company to reduce any sorts of potential attacks or retaliation form their competitions in terms of the business, and instead focus on the specific demographic and the market segmentation efficiently to have better comprehension of the business developments and generate revenues from the existing set of consumer by being extra focused and strategically concentrated on them (Abdellahi, 2017).
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