Introduction of Google

Google is a multinational public corporation, it develops and hosts internet based services and products. Google is one of the biggest search engines in internet and it processes a billion searches. Larry Page and Sergey Brin started Google as their research project while doing there PhD at Stanford university in California in January 1996. Google is one of most dominant search engines in United States with a market share of 65%.

Google also provides some other online softwares such as Gmail email software, social networking tools such as Orkut and Google buzz recently, also some desktop application such as with their own web browser Google Chrome, Picasa photo organisation and editing software and Google Talk messaging application. Google leads in development of their own mobile operating system Android which is now used by many leading mobile phone manufacturers such as Motorola, Nexus Etc. Google is one of the most powerful brand of these days

Google china was introduced in 2005 and was originally headed by Kai-Fu Lee. In January 2005 Google’s china based search engine www.google.cn was lunched with the result subject to censorship by Chinese government. After 5 years on leading Google China, Google announced that they and other United States technology companies had been hacked and the Google is no longer willing to censor searches in china may pull out their company of country.

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Thus in 2010 March Google moved Hong Kong which is one of the Special Administrative Regions (SARs) of People’s Republic of China (PRC). Honk Kong is vested with independent judicial power and not subjected to Chinese law and also including the restrictions of free flow of information and censorship of internet materials. Google started redirecting all their search queries from google.cn to www.google.com.hk which is Google Honk Kong with passing their regulators and allowing uncensored simplified search results. As a result on March 30 2010, searching using all google search sites in all languages not only google.cn including using google mobile was banned in Mainland China, any attempts to use or search via google may results in Domain Name System(DSN) error, but other google services such as google mail and google maps was left unaffected and was free to use in China.

Based on above studies the decision which lies is that should Google re-enter into Chinese market or not with approving their censorship laws. This decision could be made out with carrying PEST (Political Economical Social Technological) analysis.

PEST ANALYSIS

(P)olitical:

Chinese political environment not conducive to free flow of information china. Chinese regulation of censorships states that No units or individuals are allowed to establish direct international connection by themselves, all direct linkage with the Internet must go through ChinaNet, GBNet, CERNET or CSTNET , A license is required for anyone to provide Internet access to users.

Certain new age elements in the political system are more open to Google’s philosophy and consider it as a factor for growth. But the Chinese government did not accept Google’s philosophy about their internet censorship regulation.

The apparatus of the PRC’s(People Republic of China) Internet repression is considered more extensive and more advanced than in any other country in the world. The regime not only blocks website content but also monitors the Internet access of individuals.

(E)conomical:

Chinese currency rate is increased by 3% from year 2005 to 2010 compare to USD Good long term prospects through 2020 (GDP growth expected to be 14%) based on study from Morgan Stanley

The world economy is on the mend. After a sharp, broad and synchronized global downturn in late 2008 and early 2009, an increasing number of countries have registered positive quarterly growth of gross domestic product, along with a notable recovery in international trade and global industrial production.

World equity markets have also rebounded and risk premiums on borrowing have fallen.

(S)ocial:

China is one of the strongest culture and language orientated country and also China is number one country for their population 1,340,960,000 approx as on December 3,2010 and its about 19.5% of the total world’s population. Its 65% of search requests are seen from the young population.

There is also rapid growth in users of internet. People are more and more attracted towards globalization. Internet seen as a powerful media to express opinions via blogs

(T)echnological:

Insufficient bandwidth seen as a problem. Due to increasing usage of internet. Clear digital divide between internet users in Urban and Rural areas. Low penetration of technology to rural masses.

Strong search engine competitors seen to be gaining market share. The social networking website such as Twitter, Facebook became popular in the world, and it’s the easy way to share information with friends, it keeps you in touch with everyone. More and more people like to use net phone.

Internet security is still an old problem, but it became safer than before.

Based on PEST analysis we can draw three main scenarios:

• Scenario I – The good
• Scenario II – The bad
• Scenario III – The Ugly

Scenario I – The Good

According to our scenarios in the year 2020 world might faces rapid changes in all the aspects and technology. The growth in users of internet will be increased

There would be a change in government policies in their censorship Chinese political environment has allowed a free flow of information related to public due to globalization. The censorship is still applied in People Republic of China, but it has become more relax than before.

China’s GDP in year 2020 is 14% as expected by M Stanley. Counting the trend we can see that the currency rate has increased by 6% from year 2010 to 2020 because there is an increasing rate in the economical factor as compared to the current trend. According to this China economy would have been developed which results in creating more and high employment rates decreasing poverty

Users of internet would have increased from 21% to 45% throughout Asia in the year of 2020. People would have been globalized and concerned about their environmental problems.

Most of the big cities in China are fully equipped with WIFI services. Internet real name system applied in every website, information, effectively reducing the unnecessary information, and the internet become safer to use. Internet security will not be a problem by then

Scenario II – The Bad

Chinese political environment is still not conducive to free flow of information. There in China the censorship regulations might have became harder than on 2010. The PRC’s Internet repression has unblocked some websites but still monitoring the Internet access of individuals.

The population is increased to 7.5 billion, and the age over 65 is increasing. There might me increase in the users of internet. The main users of that will be young population so many information which we get through internet might have got filtered and they will not get access to view the information they are required. Because of the growth of population, more and more people unemployed.

People are not willing to adapt western/foreign culture. People are a bit curious about PRC’s Internet repression monitoring them. Thus they might remain worse then now.

Local search engines like Baidu are more preferred as compared to any other search engines. Due to in sufficiency of bandwidth, people prefer using baidu which is faster and easier to use. Which is also in their local language. Users of internet in rural areas might have been same when compared to urban areas same like the current trends

Scenario III – The Ugly

Chinese political environment doesn’t want any interference; so their is no free flow of information. Censor policies might get much more harder and multinational companies will find no reasons to be in china.The PRC’s Internet repression continues to blocks website content and also keeps on monitoring the Internet access of individuals.

Many countries find difficult to carry out trade with China due to strict government rules. So some countries which are currently in China might move out and start their trading process in some other Asian countries such India, Singapore, Malaysia, Japan, Middle east countries etc. as their trading hub.

Use of Internet gradually decreased because of the strict laws towards internet. Due to their law people finds diffult to use internet because of all that of license. Young population might find harder to survive in china because they will not get their privacy. Migrations of people from China to some other countries were they are getting recognized and have freedom to do anything they want to.

Local search engine Baidu has captured almost whole market share and others new search engines captured the rest of market share. Baidu will be number one and leading companies in all over China. Because they are only one who can survive with policies and law regulation which are passed government of People’s Republic of China. Companies are no more interested in investing in technological development. So because of these reason unemployment and poverty in China might get more increase progressively.

Opportunities and Threats for Google

There are many opportunities and threats which are affecting the existence of Google due to laws and regulations of china and their policy of censorship of internet.

Scenario I – The Good

Opportunities

Rapid growth in the users of internet. There will be a high increase in rate of users of internet as compared so that there will be a good progression in a organizations economical growth

Globalization in China. There a globalization in world so that there is a free flow of information and there law and regulation towards internet will be censorship of internet will be liberal

Steady growth in economy. As China is a developing economy it could become one of the most important trading hub among the world. Employment opportunities will increase for people all over the world

Internet security which plays a main role. New security system and firewalls might have introduced through which confidential document can be maintained

Threats

Due to increase in market competition may increase which leads to misery for the company to survive in those kinds of hard and tuff situation. They have to make sure that they will always leads in market and give a good competition to the competitors in the market to ensure their existence.

Cyber crime also will increase. When there is an improvement in the technology there will be a increase in cyber crime also. They have to make sure the security is very good to control and observe the criminals.

These are the opportunities and threats which will happen when there is when the scenario is good and works with Google in favors of them

Scenario II – The Bad

Opportunities

There is huge and increase in number of population. So that many of them uses internet for their work and daily purpose.

Free flow of information is controlled by the government. So that there is minimal cyber crime. It would be the government’s responsibility to safeguards there information and nothing there to do with Google.

New search engines are developed which could a good competition for Google. Without any competition we can’t compare and find out the best of them. Thus having a competitor is always good.

Threats

When there is a huge population and users of internet it will be impossible for them to monitoring each of them to reduce unwanted search queries by the user. If there is huge explosion of population then cyber crime will surely increase because there is no one to control them.

People may prefer using other search engines which is in their local languages which may result in the failure of the company for the survival in future span of time

These might be the opportunities and threats faced by Google if the scenario is bad

Scenario III – The Ugly

Opportunities

When there is strict rules and regulation of using internet. It will not be misused by any anyone because everyone is been monitored by government

Regulation of information could be controlled. This reduces cyber crime

No competition. When there is least amount or no competition they can rule the market and safeguard the position in marker for the future span of time which will be very useful for them.

Threats

The main threat will be Chinese government not allowing Google to re enter the market. Because they don’t believe that Google could deal with laws and regulation of censorship of internet by the government

Low growth in GDP of china which will affect the companies existence

All the people may force to use the local search engines. Which are safer for them.

This all could be opportunities and threats if the scenario worse waits for them

Strategy

The main plan which Google to make is they should or shouldn’t agree to censorship policies of china. Also it will be safe for them to move to china so that internet security should be increased so that there will not be any problems for them in future. Then they should decide to move into china very slowly and carefully with the view of future problems taken into references which would affect their existence in china.

Google also appoint a similar person like Kai-Fu Lee as the head of the company who is capable of maintaining a good relationship with government. So that in future if there any changes in law of government

Then the other main factor they should consider is that is how to bring it back into number one. Because they are out of china they should consider the fact that the other local search engines such as Baidu captured the position of number one. They also have to plan how to overtake them and recapturing the market.

Decision

Looking at the three scenarios we can make some important decisions

• Scenario I – The Good

From the first scenario we can come to the decision that Google should re-enter Chinese market because it will bring them a nice and good future. Recapturing the market also will not be a problem because they had been already been and successful in the market. So with maintaining good relation with the government they can ensure their existence

• Scenario II – The Bad

From the second scenario we come to the decision that Google should enter Chinese market if the Chinese government is willing do some changes in laws in which Google will not get affected due to their regulation towards censorship policy and if also to increase the security procedures by which they can prevent cyber crime.

• Scenario III – The Ugly

From the third scenario we can come to a conclusion that Google should not enter into Chinese market they stay where ever they are in Honk Kong and have to drop their idea of entering into Chinese market and if that is good then they have to move to some other Asian countries.

Conclusion

Seeing through all these scenarios and hoping the best happens in future. Google should re-enter into Chinese market and continue their recapture all the market and make a successful entry.