Google in China

Google in China

Executive Summary Rarely do potentially momentous business decisions get made without a significant amount of debate, consideration, and in some cases, compromise. This is precisely the case in Google’s decision to not only open a product research and development centre in China, but also to revitalize its web search engine’s Chinese presence through launching Google. cn. In launching this new site, Google made the difficult decision to compromise on its mission of providing open and free access to information, in favour of increasing user satisfaction.

Essentially, though searches are easier and more streamlined through Google. cn, items that would have previous been blocked by the Chinese government on Google. com are now “self-censored” by Google itself. Thus, the decision was made to comply with Chinese policies, and from this, Google faced large-scale criticism that it was actively participating in the suppression of free speech. Faced with this dilemma, Google has hired Navigator Consulting to help determine its next steps coming from this decision. In this report we begin by identifying the key issues that Google must consider before identifying a direction.

These issues particularly surround balancing Google’s socially responsible reputation with its commercial interests of expansion and profit. This balance must be achieved, while also ensuring that Google maintains a competitive edge with both primary rivals (Yahoo! , Microsoft), and domestic Chinese rivals (Baidu). Following this we analyze these issues using a SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis, a PEST (Political, Economic, Socio-cultural, and Technological) Analysis, and a Porter’s Five Forces Analysis to assess over-all industry attractiveness.

Prior to these, we ensure to set out the relative importance and urgency of each issue that Google must consider, with Corporate Social Responsibility and Shareholder Profit ranking high in both importance and urgency. Recommendations are then made for Google to consider as they go forward from this decision. Despite facing criticism, Google should remain in the Chinese market, functioning and developing as was intended prior to any reservations felt upon facing negative public opinion. Google’s motto is “Do No Evil,” and we wholeheartedly feel that in this circumstance Google has done no evil.

Instead Google has committed itself to a competitive advantage through increasing Chinese user satisfaction and opening new R&D and product development opportunities. More importantly, Google has also established itself as a potential catalyst for making further inroads in increasing freedom of expression in China. From this, steps for the resolution of this issue and the implementation of recommendations are suggested for both the short and long term. In the short-term, Google is primarily concerned with managing the negative public opinion through producing a solid media message and pursuing a dialogue with its critics.

From this dialogue should come tangible outcomes for mitigating its impact in the Chinese market and working towards future reforms in Chinese freedom of expression. In the long-term, Google, should continue working towards these reforms, continue working to satisfy its new Chinese user market, and over-all, continue producing the same high-quality, innovative products and services that has established it as an icon in the digital age. Key Issues 1) Shareholders Profit a. Corporate Expansion 2) Corporate Social Responsibility 3) Competition 4) Reputation 5) Research & Development

As the case is extensively studied, our panel felt that the aforementioned issues were important for Google to succeed globally. Discussion for each issue is presented below. ————————————————- Share Holders Profit Press Release: Accepting Chinese govt. restrictions Figure 1. The plot shows Google Share price starting August 27, 2004 and ending March 10, 2006. There was a press release by Google on February 3, 2006 stating that it will adhere to the Chinese government mandate on censoring search results. Google, went public on April 30, 2004 (http://money. cnn. om/2004/04/29/technology/google/) with an IPO (initial public offering) of $85 on August 19, 2004 for 19,605,052 shares (www. google-ipo. com). There on, Google has always seen an upwards trend in its share prices earning net profits year after year for its share holders. Google shares traded at $ 466 on January 13, 2006, the highest it has been since the IPO. Following the press release on February 03, 2006 and the Congressional hearing the share prices dropped further to $357 on March 10, 2006, a drop of 23. 39%. At this time, the investors are alarmed and further drop in stock prices is foreseen if remedial actions are not taken.

Thus, at the present time it is key for Google to address its falling stock prices and regain confidence within investors. ————————————————- Corporate Expansion The presence of Google on the World Wide Web is incomparable to any other website or search engine in operation. Availability and usability of Google is still constricted to the western world and the rest of the world either faces issues with speed or other technical glitches. Google needs to move into newer markets and gear its services towards specific users.

Thus, Research and Development of new services catered towards specific markets becomes essential for the progress. In this situation, Google had an opportunity to extend its services to a vast majority of users who are expected to increase in the near future. Thus, Google must consider expanding into bigger markets and continue developing products to suit the needs of its customers. ————————————————- Corporate Social Responsibility It is a form of corporate self-regulation integrated into the business model whereby business would monitor its adherence to law, ethical standards and international norms.

Similarly it encourages businesses to embrace responsibility for the impact of their activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere (http://en. wikipedia. org/wiki/Corporate_social_responsibility). In this case, Google is highly criticized by protesters in the favour of Tibet liberation and the government where Google’s executives were called to a congressional hearing comparing their decisions to Nazi Collaborators. As a global company, Google should consider the effects of its decisions on the global community.

Profits are important but it is also key that the global community agrees with decisions made by Google . Thus, Google needs to see how it can be socially responsible, thereby addressing emotional considerations of investors and general public. ————————————————- Competition It is to be noted that internet search users are expected to increase from 100 million to 187 million in two years (http://news. bbc. co. uk/1/hi/technology/4645596. stm), thus there is great potential for Google as a search engine.

However, there is fierce competition from already established china-based search engine, Baidu. com. Besides, Google also faces competition from its western competitors such as yahoo. com, msn search, who would like to tap into the Chinese market. Thus, it is important for Google to consider the impact of Competition looking forward. ————————————————- Reputation Google has a great reputation within its customers for providing the best possible user experience, delivering fast and effective search results and of “doing no evil”.

By bringing such strong points forward as part of the ten key philosophies Google needs to consider the impact of its decisions on its users who access Google primarily because it differentiates itself from many other search engines based on the aforementioned points ————————————————- Research & Development Google has always offered innovative products to its customers. These products range from the search engine it offers, backed by research conducted by its founders to incomparable email service.

All these products are backed by research enabling them to become instant hits in the market. The same kind of research is required to understand Chinese market. Research in terms of potential products and services along with understanding consumer opinions, trends and need. Considering the amount of money invested into the new R&D wing in China, we feel it is essential to mention the importance of this Unit in terms of the value it adds and how to successfully benefit from its existence. Assessment of Key Issues

IMPORTANCEURGENCY| LOW| HIGH| LOW| Research & Development| Reputation| HIGH| Competition| Corporate Social Responsibility andShareholders Profit| To understand the reasoning behind aforementioned Assessments, see below:- ————————————————- Issues of Low Urgency and Low Importance Research and Development was chosen to be of low urgency and low importance because company’s current situation. Currently, the primary concern for Google is to effectively enter the Chinese market in terms of operations.

After the initial infrastructure is developed further research can be done based on user trends and analysis. ————————————————- Issues of Low Urgency and High Importance Reputation: Google. com is accessed by a vast number of internet users. Primarily these users access this website because of its reputation and as mentioned before because of policies in place by Google. Thus, it is very important for Google to maintain its reputation over a long period of time. ————————————————- Issues of High Urgency and Low Importance

Competition: Google has fierce competition from other search providing companies and if it loses this opportunity to establish itself in China, other companies will be able to gain a greater portion of the market share and it may become impossible for Google to reestablish itself. Once the new users are exposed to and familiarize themselves to the interface provided by Google, learn about the company policies and practices and get habitual of using Google as a search engine, it will be hard for competitors to win over customers away from Google.

Thus, competition should be of concern to Google within china at the present moment but is not very important considering other implications that it is facing globally. ————————————————- Issues of High Urgency and High Importance Corporate Social Responsibility & Shareholders Profits, each of these points are discussed independently below. Corporate Social Responsibility: Google is facing criticism from users around and is facing fierce accusations from Media and US Government.

These accusations and negative publicity are not only affecting its business elsewhere in the world but also causing it to become a centerpiece of political agenda. Thus, Google must address the issue of Corporate Social Responsibility immediately so show its caring and compassionate stand as part of the Ten Philosophies Google adheres to. Shareholders Profits: With a constant gain in the price of shares, profits year after year the investors have always been supportive of decisions made by Google.

However, in the past month the share prices have witnessed a decline primary caused by the issue of Google complying with the Chinese Government, negative publicity by media and being caught in the political agenda. Google needs to reassure its investors and regain confidence of potential investors to stabilize its declining stock price. Analysis A SWOT analysis was performed in order to understand the strengths of the company and how to capitalize them, address current weaknesses, facilitate organizational change and improve the competitive position. SWOT stands for Strengths, Weaknesses, Opportunities and Threats.

Now we will take a look at how each one of the factors affects the Google. ————————————————- Strengths Google initially became popular because of its effective algorithm of using inbound links to rank sites. Google is also preferred over other search engines because of its clean interface and no pop-up approach. These attributed along with other features that enable the user to search without hassle have caused them to remain loyal Google customers. Google has also capitalized on this and created an effective business model around the pay-per-click (PPC) and AdWords technology.

Within China, Google has invested heavily in R&D where the R&D expenditures have risen by $258,346 in one year. Headed by and industry pioneer, Dr. Kai-Fu Lee Google has a competitive edge due its intellectual assets. Google is in the position of employing and training talented people who have a good knowledge about Chinese market and can develop new and effective products. Google is not just a search engine, but also home to many other services such as Maps, Email service, Bloggers etc. that can be vital when entering into the Chinese Market. ———————————————— Weaknesses Google has product lines that show variability in terms of presence in different areas. To illustrate this, consider Gmail. It is available when a user invites their friends to the service; however this is not available to users in China. Same is the case with Blogger, Images etc. At the same time, currently AdWords will show results from US when a user in China searches to find information on a product. There are users who would like to use a service but cannot because of their geographical location. ———————————————— Opportunities Google has very less competition within China. Its main competitor is Baidu, a search engine primarily used by people in China. After adhering to regulations in place by the Chinese government and investments made towards R&D in China, Google has an advantage of any other search engine that it competes with elsewhere currently. Because of the strict rules and regulations in place by the Chinese government, it is considerably hard for other search providers to enter the market.

As mentioned earlier, the market size is projected to increase by 87 million users in the next two years that is essential for Google’s corporate expansion. Moreover, by moving into the Chinese market Google will have an opportunity to work with the government and take measures to ease the regulations in place for certain keywords. This will tie into Google’s brand and motto of doing no evil. ————————————————- Threats As long as Google plans on staying in China, it has to adhere to the strict rules and regulations in place by the Chinese Government.

Also known as the ‘great firewall of China’, referrers to the censorship of information on the World Wide Web. Thus, Google must work within tight boundaries to maintain its presence in China. Google may also find itself in a crossfire of political interests where US government may pressurize it towards certain decisions. This leads us into negative Media coverage that can be detrimental for a company’s reputation and future. The end user may hold accusations made by the Media against Google and decide to stop or restrict their use.

With different factors playing varied roles, the stock prices may suffer leading to financial trouble for Google. PEST Analysis With the turn of events in the last few months, much has changed in the environment that Google deals in. Google has witnessed the callousness from many at one end and sympathy from others on the other hand. Thus, to better describe the macro-environmental factors that pay a crucial role in strategic management of upcoming projects we scan the environment using the PEST Analysis. PEST is an acronym for describing an analysis that focuses on Political, Economical, Socio-Cultural and Technological Factors. ———————————————— Political Factors 1. China is a communist country facing problems of separatism and human rights (freedom of speech requests). Serving the Chinese market, Google has to go along with the rules and regulations set in pace by Chinese Government. In this context, Google’s filtering information is considered violating free access to information by western market and Google therefore is in the dilemma of whether to serve Chinese market and filter the search results or leave Chinese market. 2.

Companies operating in China must abide by the rules and regulations and must not agree with the concept of separatism such as Free Tibet, Independence of Taiwan, etc. Especially for Internet search engine server, once going against the rules, the company will be subject to political and technical restraint. Since unfiltered Google search results contain such information, which is considered inappropriate by the Chinese government, Google is facing requirements from Chinese government to filter all the information to be politically fitting in the Chinese market. ———————————————— Economic Factors 1. China is a growing economy with exponential demand for information on Internet while keeping its own political influence over the information acquirement. The number of Google users is increasing. 2. Information industry keeps growing in China. There are other search engine providers in China, like Baidu, Sohu, and Yahoo, etc. , They all provide other services besides search engine, such as blog, e-mail, etc. ————————————————- Socio-Cultural Factors 1.

Young generation are more international compared to the older generation, therefore there is an increasing number of young people prefer Google search engine because it provides more information compared to the local search engine Baidu. Plus google provides multiple services including e-mail, map, etc. , which Baidu does not provide. Moreover, google has the English engine while Baidu is run in Chinese. As English language is more widely used by Chinese people, business people, students, for example, Google is more popular than searching engines which provide search results mainly in Chinese.

Surfing online is becoming the trend of the young generation and people use search engine a lot, for academic, recreational, trading information search. 4. The people in general do not care that much in terms of political sensitive issues, or separationist issues. General population merely care about if they can get the information they want online. ————————————————- Technological Factors Pay-per-click method benefits the buyers and Google. (Business Model) With the boom in Chinese economy, the literacy rates have increased where China boasts a 93% literacy rate.

Google can benefit from this by employing and training talented individuals. Today, much of electronic items used in the world are produced in China, and Google can utilize the extensive infrastructure in place. Today the technology is changing faster then ever before, and to keep itself up to date Google must access the best available talent in order innovate and produce products according to consumer taste. Porter’s Five Force System Threat of New Entrants The threat of new entrants into the search engine and related products industry in China medium.

Relatively low capital requirements are needed to enter the industry, yet the development of products related to the search engine, such as email, blogs, chat functions, and further innovations, economies of scale do figure as a challenge. Government policies are an obstacle for new organizations as they would have to consider either self-censorship or face disrupted service delivery. Additionally the defense of market share by incumbents would be intense. Determinants of Buyer Power Though typically associated with customers, in the case of search engine organizations, buyers are the advertisers who buy space on the engine’s web presence.

In this regard buyer power is low. The great number of firms looking for inexpensive and effective means to market their product ensures that a search engine looking to generate revenue would never be without a firm willing to pay for advertisements. However, switching costs to provide a challenge to industry firms, as buyer switching costs are low, making this determinants a threat. Likewise, Buyers’ use of multiple sources also would present challenges to an search engine firm. Determinants of Supplier Power Supplier power is medium.

In the Chinese search engine market, users of the search engine are the supplier as their volume indicates the popularity of an engine and determines the attractiveness of it to advertisement space buyers. Search engine firms that do not adhere to government policies face disrupted service, which in turn could lead to drops in supplier concentration, essentially drops in users through low user satisfaction. This is integral to the search engine and indicative of the importance of the suppliers input to buyers. However, multiple search engines can operate at any time, and given a large enough population, can most likely operate comfortably,

Threat of Substitute Products Due to the relatively differentiation between search engines, their results and their products, the threat of substitutes is high. Though buyers face low switching costs, the relative quality and price of substitutes are considerable determinants. If a search engine provides a service and product that is of high quality and attractive to the users, and the price of advertising is competitively low, then buyers’ substitution for that search engine may be a possibility. Rivalry Among Existing Firms Rivalry is high.

Between North American search engine firms facing the same obstacles and domestic Chinese firms enjoying relative success, and all of them offering low product differentiation, competition is intense. Overall Attractiveness of Industry Despite two high threats, the overall industry attractiveness of operating a search engine in China, particularly given the size of population and untapped talent pool for product development, is a high medium. Alternatives and Recommendations Alternative 1: Option A) Be patient and continue serving in China

As Google CEO Eric Schmidt has himself acknowledged, “not to serve at all was a worse evil. ” Google should absolutely remain in the Chinese market with a view for continuous development and expansion. To leave China or respond to negative public opinion in any drastic measure would be far more detrimental to Google than the situation that it currently faces. As the figure above demonstrates, expansion into China provides Google with, first and foremost, an incredible opportunity for market expansion and profit. As Google opens its new Chinese product research and development centre, and launches a revitalized Google. n search engine, Google raises its competitive advantage over such primary rivals as Yahoo! , and Microsoft. In taking this expansive action, Google will be able to both broaden its already innovative and popular product offerings, through tapping into China’s flourishing economy and large pool of well-educated talent. Moreover, through the revitalization of Google. cn, Google is effectively putting Chinese user satisfaction in a position of priority and putting itself in direct and strong competition with China’s leading domestic search engine, Baidu.

Yet, expansion into the Chinese market is not without its drawbacks. In taking up this opportunity, Google puts itself in a position where it must comply with the regulatory imperatives of the Chinese government, effectively censoring its mandate through the censorship of various searchable items and the reduction of its product offerings. This places Google’s public image in a potentially tumultuous international position, as the company may continue to face criticisms that its compliance with the Chinese government’s request make it a participant in the restriction of Chinese people’s freedom of expression.

As well, though streamlining its Chinese web presence puts it on par with the service provided by Baidu, taking this opportunity adds Baidu to the list of Google’s intense competitors. Although Baidu, is a Chinese only search engine, its domestic popularity in China (reflected by its total revenue growth between 2004 and 2005 coming in at 172%, compared with Google’s 92%) identifies it as a fierce competitor in a market new to Google. Despite this, Google has done no evil. Political reforms have been more effective when made in steady steps than in leaps and bounds.

In entering the Chinese market and revitalizing its Chinese web offerings, Google has made a step towards better service and access to information in China. More importantly it has planted itself as a strong corporate presence in the commercial landscape of China. The helps Google establish a foundation of leverage that could be used in the future to make further inroads towards achieving its organizational mandate of open and free access to information. Google has already committed itself to this goal, despite assertions made by critics.

Google’s decision to transparently note when a search item has been blocked, and to not offer certain applications, such as email and chat, have shown that it wants to avoid the severe ethical compromises made by such competitors as Yahoo!. Beyond that, the expansion of revenue, users, and R;D increases Google’s advantage over its competitors. The opening of Google’s product research and development center is China also has the potential to expand its global offerings. Additionally, in the case of Baidu, Google’s international presence, offerings and consolidated revenue give it much more competitive stamina.

Lastly, provided that the cost of withdrawal from the Chinese market may be drastic, and that progress can be made to both quell criticism and make future progress towards open access to information, Google should absolutely stay, and prosper, in China. Option B: Merge with local competitor (Baidu) Although Google is far ahead of its competitors in the international web search space, expansion for any company into a foreign market poses many challenges. Cultural customs, local market demand, and securing business resources are all costly matters that need to be appropriately planned and accounted for to achieve success in foreign markets.

To help mitigate the risks and costs associated with entry into China, Google could create a joint venture or merge with a local company, such as Baidu. Establishing a business partner may also divert or dilute the negative media attention that Google is currently receiving. If Google can successfully integrate the two businesses, the newly formed entity can operate as a subsidiary under Google’s direct command, but potentially outside the media attention it is currently attracting.

Although joint ventures or mergers if coordinated well can lead to better business and lower costs, Google has already sunk costs into creating an R;D office in China to improve its operations in China. Coordinating with another company would potentially create a duplication of effort and a loss of investment. Another disadvantage of working collaboratively with an established Chinese company is the potential of losing long term returns – market share and profit growth.

If Google can establish its own presence in China without sharing market share or giving up technology to another company, it will likely reap larger profits in the long run. Option C) Use Media to handle situation One of the other alternatives, if Google plans to stay in China is using full fledge Media campaign. The management can use media to justify your actions of censoring google. cn and rationalize their step. Benefits of directly addressing media are Google can directly talk to public and protestors and give the first hand information on their actions of self censoring the earch engine. It will give Google the opportunity to change the public opinion and save your brand image and motto “Do No Evil”. But on the other hand, this alternative can back fire Google in many ways. Media and protestors can come up with intricate questions and raise tricky issues which can directly harm Google’s reputation and brand image. Media can also modify the statements and justifications stated by Google ; present to public giving them complete different perspective which can impact heavily on Google’s share prices and market value.

Option 2) Leave China: Leaving China may help ease the tension going on against Google’s serving China under the censorship, i. e. “doing evil. ” Moreover, leaving China can demonstrate Google’s concern for social responsibility and improving its image and profits in western markets. Customer loyalty and reputation will also be maintained. However, if Google chooses to leave the Chinese market, it will lose a big market/ profit to the rival search engines like Baidu, Yahoo, and Sohu in China.

Since China is a growing market with a huge need of going global, leaving the Chinese market means leaving the considerable potential market and increasing demand for information by numerous customers. Considering there is already a huge group of loyal customers in China, Google’s pulling out of China will cause inconvenience to those customers. What is more, Google may need to consider whether or not it will re-enter the Chinese market in the long-run. The cost of re-entering the industry could be even bigger if starting from the scratch (customer need and political barriers may remain, competitors like www. aidu. com, www. yahoo. cn, www. sohu. com, etc. may get more customers and get stronger). Implementation Short term: If Google accepts the recommendation that it should remain in China, in the interests of expansion and resisting the costs of withdrawal, then short term steps that Google is advised to consider revolve around addressing negative public opinion. As has been seen, response to Google’s decision to adhere to the Chinese government’s policies and censor its own searches has not been favorably received.

Mounting criticism that Google is a participant in actively resisting the right to free speech has been evident in the more than 50,000 letters received condemning the decision. However, it is believed that due to the potential for market expansion, product development, and working towards Governmental policy reforms, remaining in China will be the best option, both for Google’s business and ideological interests. Therefore, in defense of its long-term interests, Google’s short-term priorities concern the management of negative public opinion.

Methods that Google should consider in undertaking this include: Development of Message Stating Long-term Goals in Chinese Market (Projected Implementation: Immediately) Google, must immediately development a solid message citing the organization’s long-term goals in the Chinese market. Google has faced criticism that the decision to enter the market has been merely to satisfy commercial interests, the developed message should not shy from this topic, but openly discusses the certain commercial interests Google has.

These may include enhanced R;D, product delivery, and access to global users. Likewise, and more importantly, the message should seek reinforce the move in the context of making steps towards eventually achieving Google’s mandate of open access to information. If prompted, in addition to discussing this decision, the message should cite potential future steps, including governmental lobby efforts, and collaborating with international human rights stakeholders.

This message should not be aggressively pursued, but rather resorted to and reinforced upon inquiry from news media and anti-censorship campaigns. Pursue Dialogue With International Human-Rights and Anti-Censorship Campaign Stakeholders (Projected Implementation: One to Six Months) Google should actively pursue a dialogue with those stakeholders prominent in anti-censorship campaigns. Amnesty International, for example, an internationally respected group that was prominent in the Google anti-censorship campaign, would make an excellent stakeholder to engage in a dialogue with.

This process should be absent of any sense antagonism and instead be pursued with the sense that you are both participating to establish an understanding and come to mutually agreeable solutions. Tangible outcomes to come from these solutions may include an agreed upon list of recommendations that Google may undertake to assure such stakeholders that it is committed to respecting both International Declarations of Human Rights and its own organizational mandate. Pursue Socially Responsible Steps to Mitigate Decisions Impact (Projected Implementation: Six months and On)

Google is an organization that has maintained and held a favorable and socially responsible public image, and there is no reason why this should not continue. Forming partnerships with human rights organizations such as Amnesty International, and coming to mutually agreed upon steps that Google can take to mitigate its impact would be a an excellent direction to take. Upon the compilation of a list of recommendations that Google can take up, timelines for implementation, and following through with implementation should be set.

Through implementing the tangible outcomes produced from pursuing a dialogue with such stakeholders as Amnesty, Google can ensure both the restoration of its positive public image, as the attainment of its organizational goals. Given the decision that has been made, to transparently display when search items have been requested restricted, Google can rest assured that it is already moving in the right direction. Long term: Steps to achieve: 1) Build trust and support within organization and with users: (Projected Implementation- continuous)

It is important to have trust on Chinese base R;D and there approach to establish its base in China and for that it is important to communicate with Headquarters at US and discuss the measures taken and reasons behind those steps. Frequent visits by President of Google. cn to Headquarters will help to build the corporate communication and trust by management which in turn will help to build the support and trust from their side. It is equally important to build trust with the users. Even though Google has to comply with Chinese Government and block certain searches, it can notify the user each time a search result is removed.

This kind of full disclosure empowers individual users. It also allows for intelligent, informed debate on the issue within China. This way even with complying with Government’s policy, Google can serve its motto of “Do No Evil” and improve its damaged image. 2) Set user data base and psychologist to understand the need: (Projected implementation- 6months- continuous) In order to improve the search engine, Google needs to understand the needs of the market more closely. By setting up the data base and hiring psychologist, it will help Google to understand the consumers’ psychology better.

It can come up with the ideas to make the search engine more user friendly and new improvements that can be used as added features. This can give specific direction to R;D group to improve on search engine from consumers’ perspective and come up the innovative products to attract its consumers. So this will be the investment for concrete base and future returns. 3) Extensive Research and Development in the Chinese Market. (Projected Implementation- 2years and so on) In the recent year Google has spent around $120 million on setting Research and Development (R;D) in China.

By employing the best and efficient workforce and engineers to build the R;D, Google can boost product development and improve search engine. The goal should be to meet local demands. So that people start using goggle. cn as their daily search engine. By using the local workforce, it will be increase new job positions and bring revenue to Chinese Government as well. This step will help to improve Google’s image among local population and will also attract new investors, advertisers and customers. 4) Launch new products: (Projected Implementation: 2-3 years)

Once the basic need is set and consumers start using google. cn as regular search engine, and Google has thoroughly studied the needs of the market, this will be the right time to launch the new products and capture the Chinese market fully. As by this time, Google will have large number to users and R;D will be ready with new products to offer them. 5) Nationwide advertising: The aggressive marketing and nationwide advertising can be used to attract new users and notify the existing users on launch of new products. Media will play the positive role in this case.

As by this time, by following all the steps mentioned above Google will be firmly penetrated in the Chinese market and launch of new products will help to grow its economy and market value. And extensive media coverage can be used to achieve that goal. Once Google establishes well in China, it will be a global leader and will be tough competition to external as well as internal search engines. Implementation Summary With the recommendation to stay the course, and remain in China, Google will have to plan for the stiff competition it will face with the likes of Baidu.

Baidu is the hometown favorite, and although Google has been in existence longer, its history in China has been marred with poor service quality. To create an effective and appealing line of products, Google will need to hire very capable research talent. In addition, we recommend that Google acquires the services of a psychologist to better understand consumer preferences and the Chinese psyche. It will be best suited for Google to expand its launch of products, in particular email and blogging services, only after it confirms from the Chinese government that privacy will not be invaded.

Google should intensify its research and development of such products, and be prepared to release at a moment’s notice – as it is likely that competitors will be ready to jump at the change in policy. Over the course of operations in China, Google will need to do what it can to influence, persuade, and pressure the Chinese government to soften its ban on information censorship without risking its ability to operate. As international pressure mounts from NGOs and large corporations against the Chinese government, Google needs to stand tall and show its support of its international peers.

A concerted effort will make it clear to China that if it wishes to realize its full economic potential, it will need to fully integrate with the rest of the world; and it cannot do so if it continues to offend the world’s national and corporate powers through its denial of basic human rights. Google should work with lobbyists to coordinate information and spread their message through the net in an effort to publicize, gain approval, and quicken the process. Bibliography (2005). Baidu Inc. : 2005 Annual Report. http://www. corporate-ir. net/media_files/irol/18/188488/reports/BIDU_AR_2005. df, 10/18/09. BBC News. “Google censors itself for China. ” BBC News, January 25, 2006 CNET News. com: Microsoft settles with Google over executive hire (December 22, 2005) Google’s Gatekeepers”. New York Times. 2008. http://www. nytimes. com/2008/11/30/magazine/30googlet. html? _r=1&partner=rss&emc=rss&pagewanted=all. Retrieved 2008-12-01. “Google move ‘black day’ for China. ” BBC News. January 25, 2006. http://www. google. com/corporate/history. html, accessed August 2006 http://irrepressible. info/about, accessed August 2006


Comments are closed.