Q1. Executive Summary of the Major Issues of the Case
The problem started with their initial public offerings when google opted to go public on 19 th August, 2004 and that did not turn out too well for them as it created a controversy because at that time people didn’t have sense of how a search engine can become a Multi Billions business even though search engine were introduced long time ago but it was still a blunder to make it public and to make it even more worse; they opted for Dutch auctions which was not the way to go for a company like Google, giving investors a free hand to choose number of shares they wanted to buy and on their bided price was not the way to go and it ended up as a failure because people did not pay what they expected as they were over-confident and thought people will exceed their expectations. They were not allowing the investors to participate. Google kept the investors at bay when it came to investors having the voting right.Google did not have good relations with investors for their benevolent despotism approach.
Another issue was created when Google launched a C category for investors and were not given any voting rights. Which created doubt in investor’s mind as they for shouting out for equal vote opportunity. Another issue emerged in 2012 and 2013 when employees started to leave Google despite being called the happiest place to work but it was unable to have confidence of their employees.One of their employees stated after leaving the company by saying“Google I came to work for was a company that loved to innovate in technology but they are now shifting their focus towards advertising and making it the main priority”, one employee stated after leaving;“I left because of bureaucratic nature of management”. One of the current issue which Google faced was the restructuring the organization which e investors and employees did not want to happen as they felt it would be costly and wouldn’t provide much benefit.
Q2. What were the reasons given for the restructuring?
The main reason for the re-structuring was Google’s Co-founder which was the Alphabet’s honchos, which now wanted to replicate their search engine success across the range of industries and wanted to start many new startups with new improvised technological innovations. Google wanted to change the reporting of their earning to investor as they said they wanted to introduce segments which would be able to show Google’s earning separately form their other businesses’ earnings. Larry Page who was the Co-founder and current CEO of Alphabet said “we want to possess more management scale which will help them to manage things independently and which are not related to greater extent”.Larry Page wanted to emulate Warren Buffet‘s management style who was the CEO of Berkshire Hathaway. As Berkshire Hathaway had a diverse line of subsidiaries which they had planned for long term value creation. Alphabet’s top management had a clear vision of long term projects in mind before initiating this restructuring program.They wanted their projects periods to exceed the venture capital’s investment.
Larry Page insisted that their restructuring program would be a welcoming change for enthusiastic entrepreneurs who want platforms to showcase their talents and shine. Insiders from Google insisted that separating the companies will deplete the competition for new talent and allocations of funds will become easier.
Q3. Do you see ways that Alphabet can leverage or transfer core competencies across divisions to improve or extend market position? How about to compete in markets of the future?
Alphabet who is the parent company of Google, in past had took absolutely game changing decision for which they are leaders in the market now.In 2016 they overtook Apple as the leader in market capitalization and currently they are in one of the top earning companies in the world. Their decision of overtaking YouTube, Android and double click were the game changing strategies through which they made themselves able to get highest market capitalization.And even now they need to do the same; they need to acquire new technologies and upcoming future technologies as for people usually; it is the every new technology or innovation that outshines the existing ones. Apart from this, they need to improve their internal relations as well because there is a strong history of controversies in Google and the factors that employees being unhappy with their management and investors are not taken in confidence with their policies can hinder the future success of the company. So they need to put less pressure on their employees and give them free hand by letting them work as per their thinking. They need to create more teams working on the environment within the organization, help employees build strong bonding by aligning them in groups together; to assign them task and targets to work on. Make teams who solely monitors customer’s behavior on social media or whichever platform they can reach to get in touch with public. Listening to customers’ views and their criticism will surely help them correct their mistakes.
To compete in the future market they need to focus more on social media side as the whole world wants to go social and the mass business in future is going to be on online platforms, so they need to focus on quality of online content like better search quality and easily accessible. Apart from that, they need to improve their mobile phones quality as right now they are far behind Apple’s I phone and they need to take the market share of by making their phones as good as Apple’s phones.
Q4. Google founders have vowed to “take the long-term view” of the company. What evidence substantiates or contradicts this statement?
Company’s founders and leaders have firm believe from the beginning that they will take the long-term view. The technology and the business is changing very drastically despite which, Google’s founders have always opened two to three options in which they can try their luck. They said we will not look for short term earning but we’d opt to go for high risk high return projects and to do that they are going to put more emphasis on new opportunities.Despite Google earning 95% of their revenues from search, they still opted to further spread their range. Larry Page said in 2013 that “Apple has a limited range and they are very successful in that and its less risky but I am not happy with this mindset, I like to improvise and innovate and do multiple stuff that is what makes me happy”. He said initially “we had a lot of pressure from investors that we are spending heavily but now they are the happier ones in our ranks”.Alphabet decided to make a separate subsidiary for self-driven cars which is founded by Google X lab. Google is now experimenting with lots of stuff like Google lens, which is a very popular concept and people are excited about that. Google virtual reality is Google’s virtual assistant that is making smart home products which is unique concept and is one for the future………….
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