The Diversification and Innovation Strategies of Google: A Path to Success

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Jul 07, 2023

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The Diversification and Innovation Strategies of Google: A Path to Success

Introduction:

In the ever-evolving landscape of technology and the Internet, companies must continuously adapt and innovate to maintain their leadership positions. Google, the Internet giant, has consistently employed various strategies to achieve this, including diversification, acquisition, and vertical industry integration. These strategies have not only allowed Google to create new markets and retain existing customers but also position itself as a one-stop venue for all Internet-related needs. In this article, we will delve into the business strategies of Google and explore how they have contributed to the company's success.

Diversification: Creating New Markets and Retaining Customers

Diversification has been a core business strategy for Google, enabling the company to expand its offerings and cater to a wide range of consumer needs. By diversifying its services, Google has created a pool of Google-dependent Internet users, ensuring their continued loyalty and reliance on the company. One notable example of Google's diversification strategy is the acquisition of the Android mobile operating system in 2005 for $20 million. This move not only popularized the smartphone and tablet markets but also allowed Google to establish its presence in the consumer electronics market, competing against Apple's iOS operating system. The success of Android led to the resurgence of established consumer electronics companies like Samsung and Sony.

Acquisitions: Enhancing Capabilities and Market Position

Google's acquisition strategy has played a crucial role in the company's growth and expansion. One significant acquisition was the purchase of SkyBox Imaging in 2014 for $500 million, which provided Google with satellite technology to improve the accuracy and clarity of Google Maps. This acquisition showcased Google's commitment to enhancing its existing services and staying ahead of the competition. By acquiring companies with complementary technologies or expertise, Google has been able to strengthen its capabilities and solidify its market position.

Vertical Industry Integration: Creating Interdependence

Google has successfully created interdependence across different industries and sectors through vertical integration or alignment. By promoting the importance of the Internet, digital communication, and other technologies, Google has positioned itself at the forefront of diverse business organizations. An example of this is the AdSense program, which remains one of the best online advertising programs available. Through AdSense, Google allows online publishers and media organizations to display ads from the AdWords and DoubleClick networks, generating substantial revenue for both parties. This strategy has led to established publishers and media organizations relying on AdSense for their online revenues.

Innovation: A Key to Sustaining Leadership

Central to Google's success is its commitment to maintaining leadership through continuous innovation. As both a technology and media company, Google understands the importance of introducing new technologies and adapting to technological breakthroughs. By consistently innovating, Google has been able to stay ahead of its competitors and meet the ever-changing needs of consumers. This focus on innovation has allowed the company to supplement its advertising business and further enhance its strategies of diversification, acquisition, and vertical integration.

Actionable Advice:

  • 1. Embrace diversification: Companies should consider expanding their offerings to cater to a wider range of consumer needs. By diversifying, businesses can create new markets and retain existing customers, leading to sustainable growth.
  • 2. Strategic acquisitions: Companies should actively seek opportunities for acquisitions that enhance their capabilities and market position. By acquiring companies with complementary technologies or expertise, businesses can strengthen their competitive advantage and stay ahead in the market.
  • 3. Foster a culture of innovation: Companies should prioritize innovation to sustain leadership and meet evolving consumer needs. By encouraging a culture of innovation, businesses can adapt to technological breakthroughs and maintain a competitive edge.

Conclusion:

Google's business strategies of diversification, acquisition, and vertical industry integration have been instrumental in its success as an Internet giant. These strategies have allowed Google to create new markets, retain customers, and position itself as a one-stop venue for all Internet-related needs. By embracing diversification, making strategic acquisitions, and fostering a culture of innovation, businesses can learn valuable lessons from Google's approach and pave their path to success in the dynamic world of technology and the Internet.

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