Competition in the search industry
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1.Which of the five competitive forces seem strongest? weakest? What is your assessment of overall industry attractiveness? Ever since Google was created there really haven’t been any competitors that have come close to giving them a scare as far as competing with what they offer. Of the five competitive forces the threat of substitute products or services and the power of buyers are the highest. The weakest of the five for Google is the threat of new entrants because the entry barriers for the industry are high, and high customer loyalty to Google would make it much more difficult for a new entrant.
2. How is the search industry changing? What forces seem most likely to bring about major change to the industry within the next three to five years? Throughout the case, it mentions many times that the next big thing in the search industry is cloud computing. However, there are many other new areas that Google is entering such as Google TV, and they are continuing to develop their Google Maps and other areas such as their Android market (phones, tablets, and Google TV will be powered by android). After reading the case and thinking about what will bring in a major change, I think it will be cloud computing. Although most companies are still in the early stages of this, Google is projecting this to grow up to $95 billion by 2013.
3. What are the key factors that define success in the industry? What are the key competencies, capabilities, and resources of successful search engine companies? I think the biggest key factor in Google’s success is their ability to keep advancing their technology. They are constantly improving their methods and technologies and branching out into new industries other than just being a search engine such as smartphones and smart TVs along with many other things. In reading exhibit 1-The ten principles of Google’s Corporate Philosophy are their core competencies.