ALPHABET AFTERMATH OF RESTRUCTURING Case Solution

INTRODUCTION

ALPHABET COMPANY was the holding company created by Google Inc. on August 2015 upon the objectives of its new restructuring campaign. This holding company will be the holding power behind the renowned GOOGLE CORPORATION and its other subsidiaries and units such as NEST and other companies under the OTHER BETS category.

This company was created after the continuous shareholder pressures and the restructuring strategy to better manage the divisions at google by creating separate entities and creating separate reporting measures will be positive implementation towards the Investor market.

Mr. Larry Page of the Google will become the CEO of ALPHABET with Sundar Pichai being the new CEO of Google Inc.

The restructuring of the GOOGLE into ALPHABET was led with the organization following on the footsteps of Warren Buffet of separating the core and the new business units so that the new innovations have a commercial purpose. This also led that the business markets can affluence on the paths being taken by the organization and the level of funding that is being made on Separate projects (MOONSHOT) which was not possible with Google’s current reporting structure. The system identified early problems due to all the GOOGLE’s private and internally produced projects which was more of an innovation nature rather than from a business perspective. Further this was also seen as a major loss with many projects being set up on sale by Alphabet after the restructuring, and the employee loss. (Love, 2017)

This report will consider the steps taken by ALPHABET, the organizational analysis, the problems attached, the alternatives available to the CEO of Alphabet to retain the current innovation structure or to change it, and the recommendation to be followed.

PROBLEM STATEMENT

The problem statement for the organization after the implementation of the new RESTRUCTURING MODEL and the OTHER BETS DIVISION’s performance which are under performing when taken as separate units to the GOOGLE CORP. The main Problem lies with the resources being attributed to the OTHER BETS DIVISIONS and projects. How much funding should be implied, and how much time should be given to the projects to achieve their goals and rewards.

ORGANIZATIONAL ANALYSIS

The organizational analysis will consider the internal analysis of the organization which will consider the SWOT Analysis, and the External analysis of the organization which will consider the PEST Analysis of the organization.

SWOT Analysis

SWOT Analysis for the organization are the basic internal and external factors for the organization in its current state at market.(Team, 2018)

Strengths

The strengths of the organization currently leads to the heavy backing of the GOOGLE CORP. in finance, the Public Market and technical resources giving the organization of a God status. The restructuring of the organization has led towards the differentiation between the Core Activities and Other Areas of New Businesses; which suggests that the focus of the management will be highly re-enforced beneficial for the organizational position. In the technical areas of the business, ALPHABET is considered one of the best organizations in the world due to its highly skilled workforce and analysts providing better stance to the changing environment of the businesses and satisfying the needs and wants of the market and the world. If we consider directly then the organization is the market leader in the Online Advertising and other segments providing it a base for current and future revenues.

Weaknesses

The restructure model the organization has created for its investors and the demands of the market have led it towards new management and diversification issues for which it seems that the organization was not prepared. The maintenance of the brand name is more vital than the actual returns being deemed due to the size of the organization as a little wrong decision not appreciated the market would lead to the ALPHABET’s share price fluctuating; creating Billions of Dollar losses in the Market capitalization of the organization. The culture of the organization was considered weaker as the new model created was not in concern with the Workforce which was a creative group; which needed time and focus and in some cases nurturing to lead to the growth potential. Further, the investments being made into some ventures suffered failure which provides not an adequate strategy of the management in INVESTMENT APPRAISAL areas.

Opportunities

The new model which the organization has created will provide the autonomy the organization seeks, this would further provide opportunities to the organization in controlling the market position of the organization.

The Warren Buffet method applied by the organization has provided it a model which had been used before and had been successful, if correctly implied it can be used to become the best organization in the world with all areas providing and assisting value to the overall Market Capitalization of the Corporation.

One of the benefits of the restructuring model is to dilute the market in the form of different organization and projects, this will provide a clearer stance and more opportunities for the organization to garner and lead the market in all areas.

Threats

The current situations of the organization does not suggest that the new model implemented has been successful for the organization, this has provided more market regulations and scrutiny to be followed on separate areas of the organization. This will lead to a strategy which will be focused on the market entirely to perform and show results which is harder for an organization with major creativity enforced into the culture of the organization. The liability laws will also be applied to the organization working as different business segments.

One of the major concern is the funding issue for the new projects, this was implied with the organization GOOGLE CORP. covering for its research activities under a single name. Now as the Segments are different, the budget allocated will be scrutinized more by the market and the company providing longer terms in responding as a corporate culture appears; which will create time gaps and limit the working of the creative and research departments.

PEST ANALYSIS

PEST Analysis are the basic evaluation of the prevailing external market conditions impacting on the Organization as a whole. (THE ECONOMIC TIME, 2018)

Political Factors

The Political situation in the US environment is highly backed by regulations and policies, to supplement the struggling firms in the market and also to improve on the limitations of the BIG CORPORATIONS such as ALPHABET which will be highly scrutinizing the funding and the operations of the organization to having a skeptical approach as to the tax evasions and other schemes of the organization, because a big organization as ALPHABET is capable of saving millions of taxes from these techniques. The political situation of the country is stable and high involvement is suggested by the institutions.

Economic Factors

If we consider the economy of the US, then it is biggest economy in the world which is highly developed and all the factors of the market have high influence on the organizational strategies. This also provides the platform needed by the ALPHABET in garnering a market for its activities and products, receiving funding from the equity and the institutional markets such as banks, and also as environment stakeholders leading to sustaining. Further, the Employee and the workforce of the US Economy is highly technical and up to date which is employed by the ALPHABET and can be further added on to the researches and developments of the organization.

All in all, the Economy ALPHABET is situated is the world’s best economy which is highly beneficial for the organization in achieving its strategic goals……..

 

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