Thursday, May 30, 2013

Google's Strategic Planning

The article 'The Real Value of Strategic Planning', Sarah Kaplan and Eric Beinhocker, highlights the findings on in-depth research done on over 30 companies, of which some have achieved strategic success while others have committed strategic blunders. It expands on specific considerations such as the exact definition of a strategic planning process, what it should achieve, and very clearly states details like who should be a part of the discussion, how long the discussion should be and where it should be held. It elaborates on what is done incorrectly, however, it also emphasizes on there being multiple ways to create the right environment. The sample questions allow for tailoring the discussion according to each company's culture, requirements and process. Great emphasis is put on the importance of preparation and follow-up.

The article talks about a general set of rules to judge the success or failure of the strategic planning process. It reiterates what the outcome of such a discussion should be, that is, the people (decision makers) should leave the meeting feeling more informed and better equipped for the real job of strategic decision making, post the planning. The planning process should be studied to form a baseline, which would aid the design of a new process. The redesign should be executed with practical assumptions and smart pilot phases, after which or rather during which, the fourth task of skill building to maximize the impact of the process should be launched.

The strategy behind Google's products –

In context of the article, we can take a look at the strategy behind Google’s corporate strategy. Google’s growth as a brand goes hand in hand with what may seem to be a confusing strategic approach. It is an established brand that still primarily relies on the profits generated by its search engine but it is also expanding into different businesses by making some perplexing yet complex decisions, such as giving away Android for free or investing heavily into a growing but thus far limited operating system.

Their choices are based on the behavior of competitors, and the definition of their market. Consequently, Google is all about advertising and to this effect, it is in Google’s interest to learn as much as possible about its users. Hence, Google reaches out to the users by giving everything for free, from free video hosting to free document management to free voice calls or video calls to free emails. This strategy works for cementing Google as a user-friendly brand meanwhile feeding its primary profit source, advertisers, with the data they need. Google always keeps this bigger picture in mind during strategy development even while foraying into newer pastures.

Keeping this in mind, Google uses the Android platform to their advantage although it may not seem so. By giving it away for free, Google is gifting itself an enormous user base and since smartphones are now used extensively for web services, they are ensuring that their model is preserved even in the mobile domain. Thus by rejecting the choice to earn through Android directly, Google has not only expanded their market but changed market trends.

Another point mentioned in the article regarding new uses for the product or technology and pursuing future growth aggressively is widely seen in Google’s strategy through ventures such as the Chrome OS and Google Glass. Chrome OS though useless if seen as an Operating system, is a big threat to Microsoft, as with the growth of cloud computing, the need for Windows will soon vanish. With Google Glass, Google is going to literally sit on your face providing them with a new level of access to data. The bottom line is that Google wants to get people on its web services so it can sell targeted ads. The big picture always remains intact.


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