Google Search
1) Discuss competition in the search engine industry. Which of the five competitive forces seems strongest? Weakest? What is your assessment of overall industry attractiveness?
In order to assess the potential for profit in any industry, Porter's Five Forces analysis can be applied as an important tool.
a) Rivalry among Competitors * Rivalry among search engine firms is Very Strong. Google has an 80% market share in the search industry with several rivals. The competition among rivals is average, but has high potential for growth. Google constantly has to maneuver to improve their services, and stay ahead of other competitors. Google also faces low switching cost which increases rivalry among competitors: • Rapid growth in online auctions is acting to strengthen rivalry • Technology advances from Microsoft is the strongest source of competition • Recent entry of capable competitors (MSN) has heightened rivalry substantially • Jockeying for position among the search engine competitors is very active. • Competing with internet portals & web publisher for advertising dollars • Rivalry is centered around:
o Name recognition, image o Services provided o Relationship with Internet users, web sites, & advertisers o Relevancy of a search results
b) Threat of New Entrants * The threat of additional entry is weak. The entry barriers for the industry are higher than normal which reduces competition. High customer loyalty as well as high capital requirements also make it unlikely for new market entrants. The threat of additional entry is weak:
• The search engine industry has very few legitimate competitors • Entry barriers are high which lowers threat of new entry • The major barrier is the marketing/advertising costs needed to attract site users in adequate growing numbers lowering this threat • The
In order to assess the potential for profit in any industry, Porter's Five Forces analysis can be applied as an important tool.
a) Rivalry among Competitors * Rivalry among search engine firms is Very Strong. Google has an 80% market share in the search industry with several rivals. The competition among rivals is average, but has high potential for growth. Google constantly has to maneuver to improve their services, and stay ahead of other competitors. Google also faces low switching cost which increases rivalry among competitors: • Rapid growth in online auctions is acting to strengthen rivalry • Technology advances from Microsoft is the strongest source of competition • Recent entry of capable competitors (MSN) has heightened rivalry substantially • Jockeying for position among the search engine competitors is very active. • Competing with internet portals & web publisher for advertising dollars • Rivalry is centered around:
o Name recognition, image o Services provided o Relationship with Internet users, web sites, & advertisers o Relevancy of a search results
b) Threat of New Entrants * The threat of additional entry is weak. The entry barriers for the industry are higher than normal which reduces competition. High customer loyalty as well as high capital requirements also make it unlikely for new market entrants. The threat of additional entry is weak:
• The search engine industry has very few legitimate competitors • Entry barriers are high which lowers threat of new entry • The major barrier is the marketing/advertising costs needed to attract site users in adequate growing numbers lowering this threat • The