alphabet's diversification strategy

1. Is the industry Google Alphabet in, an attractive industry? What does it take to remain competitive in this industry? With the advent of technology and increase in internet users, the industry in which Google Alphabet operates is not only attractive but also have potential to revolutionize the technology and internet world. Porter’s five force model and TOWS matrix analysis will help to understand factors that will help Google to remain competitive in the industry. 2. Identify and critically evaluate Google Alphabet’s resources and capabilities using relevant BB835 frameworks and concepts. In your answer you should use your evaluation of resources and capabilities to assess how Google Alphabet achieves competitive advantage in its industry. 3. What type of diversification strategy is Alphabet pursuing? Explain the organizational structure of Alphabet using its strategic business units? What is the rationale behind this structure and diversification strategy? Alphabet INC is a giant conglomerate and holding company for Google LLC and more than 200 companies which are subsidiaries to it. It has online, digital and moon shoot companies under its verticals which are independent from one another. From 2001 to 2020, the company has done more than 200 acquisitions. If we consider companies acquired, it appear to be unrelated diversification, however, when these companies are evaluated on the basis of their activities, most of them are generally to support Google search advertising which is the main activity of Alphabet Inc. Acquisition of Alphabet Inc proves to facilitate diversification strategy. These acquisitions are very specialized in social networking, intelligent home systems, robotics, communication, e-commerce, navigation, office software, and their core capabilities such as search engine, mobile OS, advertising or information technology (voice and image recognition). Diversification strategy of Alphabet Inc is twofold: Related diversification through product and service innovation and acquisition Related diversification in terms of acquiring and developing internet and technology based products and services to capture the global internet market such as cloud computing, Android OS, R &D in Artificial intelligence and so on. The main service of Alphabet Inc is Google online search and major revenue is generated through online advertisement. It has diversified into various internet related products and services such as Gmail, Google drive, Google my business, Google map, Google photos, YouTube; enterprise products such as Ad sense, Ad Word, Pay per click and other utility services such as Google translate, Google news, Google drive, Google map, Google language. It enabled the company to reach to a large number of internet users and make them dependent on its products and services. It helps the company to create consumer base of Google dependent internet users. It also enables the company to position itself as one stop solution venue for all internet related services. Chrome had 60 % market share in web browsing in 2017. Google map allows retailers to advertise their address and products through promoted place application. Unrelated diversification through company and product acquisitions for expansion From search engine business in 1998, Alphabet Inc. offers the widest ranges of products and services termed as other bets. Other Bets includes businesses like Access (Google Fiber), Calico, CapitalG, GV, Nest, Verily, Waymo, and X. Continuous investment in development and acquisition of products such as artificial intelligence, machine learning and robotic technology, health care, venture capital funding, energy, self driving car, drone delivery and R& D in many moon shot projects, consumer hardware, airborne wind turbine, learning thermostats, smoke alarms and many other business segments have led to diversification of Alphabet’s business into other technological segments and industries. First mover advantage is the main Alphabet competitive advantage in relation to the majority of these products and services. Acquisition of HTC Google will allow engineers to more tightly integrate hardware and software and differentiate its high end pixel phone from Apple I phone X. Acquisition of Android for smartphone OS held 85 % market share in 2017.

ALPHABET’S GOOGLE Strategy

ALPHABET’S GOOGLE Porter’s Five Force, VRIO Framework, TWOS Strategy, Value Chain, organisational structure, Strategic Business units, rationale behind Alphabet structure and its diversification strategy Based on the Industry Analysis: Task 1 (20 marks, 500 words) Is the industry Google Alphabet in, an attractive industry? What does it take to remain competitive Read more…

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