Google Inc. is considered to be a search engine American company founded in 1998 by Larry and Sergey. Currently, it is a subsidiary of Alphabet Inc. holding company that controls diverse businesses such as Google environment, Android, Google Japan, AdMob, Dialogflow, and Youtube, among others. Having over 86.2% of the online search global market, Google is regarded as the biggest company in terms of search engines globally as its operation is within 219 nations. In as much as the company has high productivity due to gaining popularity within the market segment, it has competitors that offer same line of services, faces threats of new entrants, threats of product substitution, bargaining powers of the buyers as well as suppliers, and how it operates in the space which can be analyzed using the Porter’s Five Forces.
Google has competitors, including Baidu, Yahoo, and Bing, among others. This type of companies poses a significant competition to the existence of Google within the market segment as they offer products and services that are provided by Google (Heitzman, 2018). However, the competition is healthy within the industry as it helps the firm to enact measures that can ensure the company regains its market position. Google has managed to monopolize the market by commanding 86.2% as its competitors, including Yahoo, have 7.1% as well as Bing has 5.59% in 2018.
The threat of entry is moderate as it is usually an outcome of entry barriers extent. The entry barriers are factors that necessitate overcoming by the new entrants within the market to compete successfully with the existing ones (Cooper, 2017). However, companies that wish to pose the completion to Google face stiff entry barriers that are high as it has cement itself to become a tech giant monopolizing the internet over a long time. Additionally, currently, Google has dominated the search engine globally, earning a rating of approximately 80% as well as having shares over 85% revenue for internet advertising. This type of monopolistic dominance hinders more firms that wish to engage in this line of business.
Also, there are low to moderate Google substitutes. Customers that are willing to pay for a particular product or service is dependent on substitutes. Without substitutes, consumers end up becoming price-insensitive; however, their presence implies that customers can turn easily to substitutes as a response to the price increment (Dunne, 2018). In regards to Google, there is low to moderate Google substitutes due to the company monopolizing the market segment by offering various services that make Microsoft and Yahoo get lost in the hegemony of search engine.
buyers with weak bargaining powers
The buyers of Google have weak bargaining powers. The buyer’s ability to reduce the cost of purchasing a particular product relies on price sensitivity as well as the power of bargaining relative to the company in the industry(Dunne, 2018). In regards to Google, buyers have low bargaining power as a result of the dominance of tech giants that dominate the inline market by using their search engines. Additionally, the firm has gained a market advantage through ensuring all of the Android phones have pre-installing search engines. This has improved its competitiveness as well as reducing the bargaining powers of the buyers as they will eventually need to use it as long as they have smartphones.
The supplier’s bargaining power is weak as it depends on the ease of the firm to switch between the suppliers and the relative power of bargaining of the parties. Google has managed to earn a lot of suppliers, including; Mitula, Klab, COLOPL, and Gumi group(Heitzman, 2018). As a result of market power and a great brand, Google possesses powers over suppliers; thus, the weak power of bargaining from the suppliers.
Rivalry within the market segment where Google exists is low to moderate. The rivalry could have been strong if Google was operating on the same level as other affiliated companies(Heitzman, 2018). However, Google has moved the extra mile offering another line of services that the rival companies cannot, such as the introduction of Google Playstore in smartphones. The use of Android by Google has enabled the company to dominate the search engines as there has been an increased number of people who visit sites such as Google Playstore to download apps that are essential in their daily life such as Facebook and Whatsapp.
In conclusion, Google has emerged to become one of the biggest tech giants In the United States, offering search engine services across 219 nations. Its dominance within the market segment can be analyzed using Porter’s Five Forces, which entails; the competition rivalry, bargaining power of the buyers and suppliers, threats of new entrants, and product substitutes. However, all of Porter’s Five Forces are weak as Google has become a tech giant monopolizing the internet over a long time. It has moved ahead, inventing Google Playstore in smartphones. The use of Android by Google has enabled the company to dominate the search engines as there has been an increased number of people who visit sites such as Google Playstore to download apps that are essential in their daily life such as Facebook and Whatsapp. With this kind of invention, Google will continue dominating the world over a long time.
Heitzman, Adam (2018) “How Google Came To Dominate Search And What The Future Holds” Forbes [Online] at https://www.forbes.com/sites/forbesagencycouncil/2017/06/05/how-google-came-to-dominate-search-and-what-the-future-holds/#7c5e5d003872
Cooper Ryan (2017) “Google is a monopoly – and its crushing the internet” The Week [Online] at http://theweek.com/articles/693488/google-monopoly–crushing-internet
Dunne Erine (2018) “Is Google an evil monopoly? The EU thinks so.”Washington Examiner [Online] at com/opinion/is-google-an-evil-monopoly-the-eu-thinks-so”>https://www.washingtonexaminer.com/opinion/is-google-an-evil-monopoly-the-eu-thinks-so
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