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- Date Submitted: 11/26/2011 06:40 AM
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Google Value Chain Analysis
Google’s Value Chain Analysis:
Google’s primary activities in its value chain vary from a traditional model where raw materials are processed into finished goods for sale to a customer, gaining value in each step of the process. Since Google doesn’t produce physical products, its value chain is a bit more nuanced. Google gathers all the web users it can (the raw material) by enticing them to use its stellar search product with highly relevant results delivered promptly. Then, through assorted “signs” (text advertisements) it directs these same web users in the form of traffic to its advertising partners who transform the traffic into “conversions” or sales on their sites (the finished good). Google adds value not only by directing a quantity of web users to specific sites, but also by sorting the pre-qualified visitors using keyword association and search history to recognize users’ interests In this manner, Google ensures that the users who are directed to a partner site are more likely to purchase a product there.
Google’s primary activities in its value chain are heavily dependent on the support activities of administration and human resources. Google has always tried to hire the most qualified and competent individuals to ensure that it excels at the research and development of its technology and systems. In fact the company often gives aptitude challenges and tests to help recruiters sift through the massive amounts of resumes they receive.
Next to the employees, a large percentage of the cost structure is the infrastructure and systems. Google’s servers and internal software allow it to conduct operations, distribution, sales, and service. Each activity contributes to the value chain by increasing the profit of the firm. Google has locations all over the world to localize distribution, marketing, and service which in turn ensures maximum profit on a global scale. Profit is maximized by the company’s cultural awareness and social competence to tailor...