Porter’s Five Forces Model of Google

Threat of Substitutes

Substitute product here for the online business and secondly a search engine would be based on the speed and accuracy of the searching tools.  Along with that he overt ads and pages that are downloaded with the wanted links are also an issue to go for a substitute. The users of these search tools like Google are challenging more services and intricacy or superiority with the search tool to persistently ‘loyal’ to its usage.

Ad Revenues are right away related to usage, even if Google loses a very little number of users on its search engine this would cause a huge loss to the revenues being generated by the company. Technology innovation requires tremendously skilled labor; high intensity of rivalry for limited sources is very tough. If a company losses trade secrets or if skilled labor moves from one search generating company to another so it can create huge losses.

Bargaining Power of Buyer

Buyers here would be the people who are using Google throughout its existence till now. As there are a lot of search ranking forums where the visitors and users can take part in bargaining so this increases there bargaining power. Low rankings would highly influence the users choice. Another upcoming issue is that users of the search engines are getting more erudite and thus asking for other value added services also for free. Although competition level is low but quality would certainly take away all the users in a blink of eye. No search tool can be perfect as people’s demands change with the changing technology and easy to use tools every day and company who want to pace up with that has to focus on day to day research of customers’ needs and demands. Threat of backward integration also makes the system to be more competitive and to increase the power of buyers.

References

Siohong Tih, Sean Ennis and June M. L. Poon (2008). Attitude towards Online Retailing Services: A Comparison of Student and Non-Student Samples. Asian Academy of Management Journal, Vol. 13, No. 1, 113–126.

Micheal Porter. (2008). The Five Competitive Forces That Shape Strategy. Website: http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1 Retrieved: 25th September, 2012.