Google Takes on the World

Elaine Mak
April 6, 2007
M-W-F (10-10:50)
Essentials of Business Information Systems: 7th Edition
Kenneth C. Laudon: Jane P. Laudon
Case Study 2; Business Problem-Solving Case
Chapter 6 (pp.220-223) Google Takes on the World


What problems and challenges does Google face in this case? What is the source of these problems and challenges?

One of the many problems that Google faces in this case is the fact that they constantly have to compete with other big companies in the industry such as Microsoft. Google must constantly come up with new ideas and actual software to make sure they can stay on top with their competitors. Another major problem that Google faces in this case is also the fact that they were slapped with a heavy fine after violating such rights as privacy and copyright laws. Even after Google's new products, Gmail and AdSense, were created, Google cannot relax because its competitors are always coming up with new innovations as well, keeping the competition heated.

One source of Google's problems is the fact that they are a newer ameteur website and have a lot to learn. For example, they were fined for violating copyright laws, while Yahoo and Microsoft already had years of experience in negotiating with content providers. Another source of Google's problems is that they are introducing new products in the market that can be easily copied, reproduced, and offered by another company easily. For instance, Google's Maps features are also available on Yahoo.


Has Google correctly identified the challenges it faces? How has the company chosen to approach these challenges? What solutions has it chosen? Are there any solutions that the company hasn't considered?

Google has partially identified the challenges it faces, but then again, can always use more improvement to ensure that they stay ahead of the competition. On several occassions the company has chosen to approach these challenges head on making sure to correct the problem directly and making sure that the solution works and that customers are satisfied. Google has had several solutions to its problems one of them being that they have created a personalized search tool that can more accurately return relevant results. Another solution that Google has chosen is to become more of a software company rather than a search technology company. This factor has enabled Google to differentiate and expand its products and services. One solution that I thought of that Google has not used is to further differentiate their products away from that of its competitors such as Microsoft. This way Google will have a leading advantage over the rest.

Has Google implemented its solutions successfully?

It seems that the company has successfully implemented it solutions. Google has successfully implemented such strategies including creating a personalized search tool that produces more accurate and relevant results. Another succesful solution that Google has implemented is the cost-per-click strategy which would charge their customers to view ads but would also credit the customers who were mistakenly charged. The company has been successful in implementing its solutions, becuase even with all the competition Google faces, it continues to be a multi-billion dollar industry that is so popular. For example, the phrase Google-it has become tremendously popular as more and more people are using the search engine.

Has Google identified the people, organization, and technology issues associated with its problems and solutions? What are these issues?
For the most part, Google has identified its issues and problems and Google is working hard on the problems that have not been completely resolved. The people dimension of the company has been a success, because Google employs the best information technology experts many from the same education background, graduates from Stanford's Computer Science Department. In terms of the organizational dimension, I'd say that the company seems to have it together. On the same note, I think the company's technology dimension is also a success. By this, I mean that the company is always keeping up with the latest technology trends and are always changing and updating products where they see fit. For example, the company introduced Froogle and Google Talk which provided customers with the best service that fit them best.

What other factors should Google examine in addressing its current and future challenges? Do you think Google will be successful with the strategies it has adapted?

In addressing its current and future challenges, Google should pay particular attention to the ever-increasing updates on technology. Google has to be able to familiarize itself with these trends and be able to apply them to their services so that the company can be up-to-date. If the company is able to keep up with ever increasing trends, they would also find it easier to train their employees more properly, correct outdated software, and do away with inadequate resources. Basically, by keeping up with vital technology updates the company will be able to maintain satisfactory organizational, people, and technology dimensions. I think Google will be successful with the strategies it has adapted, because if it keeps current with technology it should be fine, and they should be able to keep up with the competition and the industry's increasing bid for innovation.

Can Blockbuster Stand Up to Netflix?

Elaine Mak

March 1, 2007

M-W-F (10-10:50)

Essentials of Business Information Systems: 7th Edition

Kenneth C. Laudon: Jane P. Laudon

Case Study 1; Business Problem-Solving Case

Chapter 3 (pp.103-105) Can Blockbuster Stand Up to Netflix?

Blockbuster's Business Model

Blockbuster's business model primarily consists of two main factors, low cost leadership and superb customer service. The price of renting videos at Blockbuster remains consistently lower than that of Netflix. For example, a 3-month movie plan at Blockbuster would cost $14.99 while the same plan at Netflix would cost about $2 more costing $17.99. Blockbuster also encourages customer relationships between the store and customer by offering coupons for in-store rentals, a fail-proof way to keep the customers coming. In addition to Blockbuster's physical stores, they have created an online rental store where customers would find it more convenient to purchase movies. However, after not doing so well with the method of online rentals, the company's employees feel that Blockbuster should stick with the traditional renting techniques and strategies they started with, even though thats quickly dying down due to technical advances.


How Successful is Blockbuster's Business Model?

Blockbuster's business model proved not to be so successful. In fact, the most costly factor was the "No More Late Fees" campaign launched in January of 2005. This strategy did lure in more customers, but all together created more problems than it resolved. The company's cost of paying for late fees amounted to more than what the cost of renting DVDs were. In other words, the company was losing money faster than it could earn it. This disadvantage to the company also caused customer dissatisfaction, becuase they were under the impression that no charges would incur when really their credit card would be charged.


What industry and technology forces have challenged Blockbuster's Business Model? What problems have they created?

Blockbuster already has a main competitor, Netflix, with Amazon.com on a quick come-up. Blockbuster's technique of online rentals proved to be inferior to that of Netflix most likely because it was a new concept, whereas Netflix came in the industry as an existing online rental company. Blockbuster's main competitor, Netflix, offers its customers the convenience of online rental and prepaid envelope so that customers could return the movie and in turn, order another movie on their wish list. The use of advanced technology will eventually, if not already, hurt the video rental industry. Blockbuster created an online rental system, but found that it was difficult to maintain due to the fact that the information systems department had trouble recognizing the new late fee rules. The information systems department also had trouble keeping record of up-to-date inventory, rental volume, and sales.

With the use of advanced technology on the rise, it has become increasingly common today that people burn there own movies. Even if you don't own your own computer, it is very easy for you to get a hold of a bootleg DVD. Practices like these can really hurt video rental companies, as individuals would most likely prefer to download a movie for free rather than pay for it. Other technology advances such as the introduction of cable's video-on-demand allows you to watch movies that have not yet been released on DVD and TiVo, a program used to record shows have the potential to put business like Blockbuster out of service.

Is Blockbuster developing successful solutions to its problems? Are there other solutions it should have considered?

Blockbuster's solution to its problem was to stay close to the cutting edge of technology. By doing this, the company is attempting to remain in good standing with the rest of competition. Blockbuster has decided to improve sales by expanding its in-store DVD trading program as well as its focus on new markets, such as video game rentals (Laudon). By focusing on a specific strategy such as increasing game rentals, the company can be more focused on recovering fees that were lost during their "no late fee" campaign.

Blockbuster should have considered banning the "no late fee" campaign when it first started to notice trouble with the policy. This way Blockbuster could have prevented having suffered such a drastic loss in late fees. Even if they were to keep the campaign, Blockbuster should have included with it the fact that there would be late charges applied if the item was kept for more than a certain amount of days. Wording in fine print is bad business and leads to false advertisement. This policy created a bad reputation for Blockbuster, and the company and its employees would soon face the effects of poor public relations. Blockbuster should have thought twice about this strategy and learned from the mistakes of its competitors.

Do you think Blockbuster will succeed in the future?

I think Blockbuster has a fighting chance to do well in the future if the company continues to think strategically in terms of staying up with competition, keeping up with advanced technology, and overall, maintaining customer satisfaction. If the company can get a good head start and keep at it, then eventually Blockbuster can recover the loss of late fees and start producing profits that will keep it on the same level as its competition. On the other hand, there is also a good chance that video rental stores will become completely obsolete by the use of technology. In this case, the fate of Blockbuster is unknown as outside factors are uncontrollable, as well as unpredictable.