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Google In China Case Study

1857 words - 8 pages

Case Study

On

Google in China

Table of Content

Background 3

Introduction: 3

Summary of Environmental Audit 4

Evaluating Current Strategy 4

Current state of Industry- 4
Product Portfolio Analysis 5
Critical Strategic Direction 6

Discussion 6

Conclusion 6

Assessment of Current Strategy 6

Recommendation 7

New strategic Direction/Development and methods- 7

References/Bibliography 8

Appendix 9

Background:

This case briefly discusses about search engine market in China, Google’s share in Chinese market, Government rules and regulations related to the internet search.

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As a result of this, Google decided to open its operations in China in order to resolve these issues as Google considered that it’s better to provide the information rather than providing no information at all. So, it provided the censored information to Chinese population but still it found difficult to extend its presence in the Chinese market in terms of developing products in the Chinese language and localizing them whereas Baidu’s pay 4 performance model was much better which was based on the performance rather than the flat charges in the beginning itself which other search engines used.(Ivey Case B)

Google faced cyber attacks in January 2010 which forced it to consider its exit from the China and named it as Aurora attack, moreover this decision from Google was considered diplomatic one by internet security experts as this decision would make Chinese Government to reconsider its decision on the censorship which could help Google attain the same level of leadership in the Chinese market as it enjoys the world over (Worthen, Ben,2010)

Summary of Environmental Audit:

Google was not able to enjoy the same monopoly in the Chinese search engine market as it enjoys world over that could be a possible reason it raised the issue of cyber attacks as it was planning to exit from Chinese market and needed a reason to do the same. Also another possible reason could be that it wanted to negotiate with the Chinese Government over the censorship issue so it thought that the threat to exit from the Chinese market could force the Government to renegotiate the terms and conditions for the censorship which eventually didn’t happen. As a result of all these www.google.cn (its Chinese version) was routed to www.google.com.hk as most of the services were blocked in partial or full manner in the Chinese territory. But this sort of complete isolation could have resulted in a protest from local population also Google didn’t want to lose such a huge market which was nearly double the size of US so it didn’t automatically redirect to www.google.com.hk but provided an option on site by doing so it abided with anti censorship laws and regulations. (http://googleblog.blogspot.com)

Another important analysis which we can draw is that Google was not able to localize its products so well in the Chinese language and it lacked in terms of paid search. Although Google was gaining the market share as well as the revenues as it is clear from Appendix 4 & 5 but it didn’t enjoy same kind of monopoly in China as it enjoyed world over (Ivey Case B)

Evaluating Current Strategy:

Current state of Industry-

As per a report published by iresearch overall search engine market in china accounted for nearly 470 million $. Overall internet users in China in 2009 reached to 384 Million much higher than anywhere in the world and this made it a very lucrative market for players in the internet search engine market. (Ministry of Culture) Baidu which was local player...

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