Showing posts with label class 12 accounts home tutor noida. Show all posts
Showing posts with label class 12 accounts home tutor noida. Show all posts

Sunday, July 11, 2021

AMAZON AS AN EMPLOYER SHRM case study solution- an article published in The New York Times portrayed Amazon as a soul- crushing employer and a cruel place to work.

 Case Study Summary

This case study is based on Amazon, the largest Internet-based retailer in the United States, has frequently figured among the most admired companies. However, an article published in The New York Times portrayed Amazon as a soul- crushing employer and a cruel place to work. According to the article, employees at Amazon are encouraged to be critical of each other’s ideas and performance — both openly, during meetings, and covertly, by surreptitiously sending negative feedback to each other’s bosses. As Amazon continues to be well-known for its brand and its obsession with customer service, the exposé has raised questions about Amazon’s employer brand. At the time of the article’s publication, Amazon is in the midst of implementing massive growth plans, including the construction of new office installations. Are Amazon employees thriving, or are they just barely surviving? Are such strategic human resource management (SHRM) practices sustainable?

Case Study Questions:

1. Does the people management strategy of care and compassion make business sense? How does the practice of keeping employees on the edge impact business in the short and long run?

2. Is Amazon’s employer brand as reported by The New York Times sustainable? Why or why not?

3.  Are employees thriving under Amazon’s workplace policies, or are they just barely surviving?

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Case Study Solutions

1. Does the people management strategy of care and compassion make business sense? How does the practice of keeping employees on the edge impact business in the short and long run? 

When it comes to maximisation of shareholders’ wealth, making business profitable and remain competitive, innovative, goal focused, market leader and  accountable to money put into business by investors, people management strategy of care and compassion have no sense for a business organisation. Amazon, since its start of its operations till date, has grown tremendously and generated great return to its investors, thus making the company one of the best places for investors to park their money and win heart of customers in offering unique services and experiences. Strategy of care and compassion creates issue and become insensible for business growth.

Extra care and compassion have negative results that hamper employees’ personal and professional growth.1 Many times unnecessary concerns and worries for employees distract leaders in handling the situation and decision making. Many times, care and compassion becomes control issue for leaders.For instance, managers are not able to make strong decisions because they are concerned about employees’ reaction leading to difficulty in accomplishment of goals of the organisation.

Care and compassion reduces abilities of employees to handle difficult task and convert challenging jobs into opportunities of learning new skills thus hindering employees’ growth and reduction in turnover of the company as well as unsatisfied customers.2

To an extent, care and compassion helps to increase the productivity of employees at work place2 but, when it comes to make the company most innovative in the industry and work in a dynamic environment, instead of being compassionate; aggressiveness, assertiveness, bold attitude towards new and challenging task, passionate to work 24/7 and capability to devise new ideas and convert into a successful becomes more important for profitability and survival of the business.

Constant empathic role of leaders lead to reduction in capability of employees to face new and unique challenges and adapt to changes required to remain market leader in the industry and also create compassion fatigue among employees.3

It is very important for employees of business organisation to not only work hard and for long hours but also act smartly when it comes to fulfilment of wealth maximisation of shareholders. Care and compassion sometimes leads to unethical behaviour in terms of restriction of performing new and challenging tasks and accomplishment of tasks on time leading to losses to business organisations.4

Innovation is key driver to success for a business organisation in the industry which demands for highly talented, workaholic, competitive and passionate workforce rather than a work force who seeks compassion and care from team leaders. It will hinder the process of continuous innovation and opportunity of employees’ professional growth thus leading to failure of business.5

For a business organisation, the most crucial motivational factor that keeps them going on and on is the profit generated out of business operations in order to meet the expectation of shareholders and increase in valuation of company in stock market. Care and compassion does not generate profit and satisfy goals of shareholders. Hence it becomes sense less for a business to focus upon it. Investors look into financial statistics of company while investing into it rather than inculcation of care and compassion in corporate culture of an organisation.

How does the practice of keeping employees on the edge impact business in the short and long run?

In short run, practice of keeping employees on edge impact business positively in terms of increased in productivity, effectiveness, efficiency and thus overall profitability of the business. It will facilitate employees to take new challenges at work place, explore new business ideas, innovate, complete task on time and remain competitive among peers which is crucial for sustainability and growth of a business organisation.

It will foster employees to learn new things faster, improve morale, and a sense of achievement while performing task at work place. It will help managers to easily differentiate between most efficient and least efficient workforce in the organisation6, thus enabling process of training and development more effective and sound in the organisation.

Overall performance of employees at work place will substantiate success of organisation7. The organisation will be embraced with efficient pool of talents motivated to bring the company at number one position in the industry and increase its profitability.

It will facilitate eagerness among employees to collaborate, learn from their teammates and perform challenging tasks placed upon them in a fast changing global environment to become achievers who have the capability and will power to create history and pave the way of success for themselves and organisation as well.8

 It will increase accountability and boost coping abilities of employees at work place to remain confident, effective and efficient in accomplishment of tasks assigned to them8. It helps them to focus on integration of their growth with organisational growth, work with little or no supervision and make them proactive and street smart.

However, in long run, practice of keeping employees at edge will impact business organisation adversely. Employees’ fear of inability to meet Expectations and standards set up by organisation on time will put employees at distress in long run leading to high attrition rate, low productivity and feeling of discontent among employees in the organisation8.

Anxiety and fatigue pops out sometimes leading to depression and burnout due to long working hours, meeting deadlines, and exploring new ideas for business growth and competing with peer members for saving jobs. It reduces efficiency and performance of employees at work place, creates job dissatisfaction and work alienation.9

Employees are not able to concentrate at their work, a sense of belongingness remains missing towards organisation and employees suffer from work life balance issues.9 Creativity is lost and employees feel demotivated and devastated while doing something new and unique for growth of organisation thus hampering innovation in the organisation.

Overall efficiency and productivity of organisation is hampered dramatically if practice of keeping employees at edge is followed in long run. It negatively impacts innovation at work place, puts sustainability of organisation in danger and reduces profitability of business.9

Employees feel disengaged and find management insensitive towards their needs and requirements leading to distortion of talent pool within the organisation. Employees lose confidence in the company they work for and start focusing on self fulfilment rather than organisational welfare. Employees start searching for opportunities outside the company and quit the job due to which many times organisations loose best talent and employees due to practice of this strategy at work force in long run.

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2. Is Amazon’s employer brand as reported by The New York Times sustainable? Why or why not?

Amazon has been criticised for putting employees working for long hours, building pressure on employees through peer review system and promoting employees to criticise each other at work place. Work environment at Amazon is very competitive and pressure building where employees have to compete with each other and sabotage each other to survive at Amazon. However, Amazon as an employer brand seems to be sustainable as it has established itself as an employer brand for those people who are willing to work under pressure, learn and perform challenging tasks and foster constant innovation and creativity for future.

Work philosophy at Amazon is that employees have to work hard, smart and long and one cannot compromise on any of three10. Employees’ motive at Amazon is to adopt challenges as an opportunity to grow, enjoy the work and create history in the world. Customer satisfaction and value creation for its customers through continuous innovation and customer support is the top priority of Amazon. 11

Corporate culture of Amazon demands from employees to use unconventional methods to generate innovative and solutions to the problems existed at work place in order to succeed in cut throat competition prevailing in the industry and attain market leadership. 12

Amazon as an employer suits those who are ready to take challenges in fast changing competitive environment, become forefront for technological innovations and are full of ambitions in terms of career growth & development, success achievement and wealth accumulation.12

It works on the philosophy of facing extreme demands at work place instead of running away considering it as a problem for them but as an opportunity to career growth and technological advancement in their skills and capability.12

It fosters an environment where people are enthusiastic to work on cutting edge projects with innovative ideas and solutions and ready to learn from their team members at work place who are thriving on meeting expectations of billions of its customers and achieve success individually as well as for the organisation. Amazon seeks for employees who shine under pressure and are high performers and strong emotional quotient.13

It considers its employees as a pool of talent and facilitates training of employees to increase their capability and develop their personality.14 Its training program enables employees to understand what is being expected from them and get engaged with work culture at Amazon. It   will facilitate smooth functioning of employees at work place as per the standards and norms set by Amazon and avoid conflicts.

Human resource activities such as training and development, performance appraisal, pay and perks are designed effectively and systematically to achieve corporate and strategic goals of Amazon such as continuous innovation and technological advancement to create value for its customers and increase revenue for the company.14

Usually small teams are formed with main motive to reduce differences, promote self management of employees and invest huge chunk of money in training and development of its employees. Company also promotes sharing of information inter and intra department level to promote creativity and learn things from each other to facilitate fast resolution and decision making.15

Amazon’s policy to hire talented people from diverse backgrounds is the key to fulfil its objective of constant innovation and maintain competitiveness in long run.16 It considers talented employees as a source of competitive advantage and thus focuses to attract people who are innovative and have firm belief in Amazon. In order to attract and retain talent, it shares profit among its employees.

It offers more incentives to employees who serve the company for more than two years than new employees with a motive to retain such talents who are highly involved with organisation and reduce training cost. Company offers best pay and perks in the industry to attract talented personnels in the organisation. Performance based incentives and signing bonus are integral part of packages offered to its employees17.

Performance appraisal is based on self evaluation and peer assessment. Earlier before 2016, Performance of employees was ranked and those who performed worst were dismissed from the company. But now, company has changed this policy and started a retraining program called Pivot to train its underperforming employees and offer them a chance to improve their performance.17

Company takes regular feedback regarding working environment from employees. It has daily question and answer feedback program called Connections to understand its work force and problems faced by them. It has ‘Forte’ an Employee review program in place which focuses on employees’ strength rather than their weaknesses and thus putting employees motivated positively towards the organisation.18

Amazon plans to retrain its one lakh employees investing $700 million.18 It has plans to expand its training programs and adds new training programs to improve the quality of its work force and retain talented and future ready employees at work place to foster constant innovation, creativity and meet its commitments to become top employer brand in the industry. 

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3.  Are employees thriving under Amazon’s workplace policies, or are they just barely surviving?

Employees are thriving as well as just barely surviving under Amazon’s workplace policies. Amazon is a technology driven company which is customer obsessed and innovation centric. Employees who are passionate about what they do at Amazon in terms of innovating new products and services to create history, earn big and become star performers of the company are thriving under Amazon’s workplace policies.

Employees who are ready to sacrifice their work life balance and enjoy career advancement by fulfilling extreme demands rising at work place are thriving not surviving in Amazon. These people are willing to work 24/7, reply mails sent to them in the midnight, highly enthusiastic, ready to take pain on behalf of the company to satisfy expectation of customers, meet high set standards of performance, ready to collaborate with work force, learn and adopt new skills, give innovative and creative insights, work on challenging and cutting edge projects, willing to accept challenging jobs as an initiative to grow and prosper in their career rather than problems and escape from it.19

Employees who are deeply rooted with Amazon’s work culture and belief of work hard, smart, long, have fun and create history are advancing in their careers and prospering while working at Amazon. These employees enjoy working in an unconventional, competitive and fast changing environment with a motive to do out of box things for welfare of the company and customers and earn strong reputation in terms of huge pay and promotion.19

Constant criticism of ideas and opinions of peers, attending late night meetings, sending feedback to others’ bosses anonymously to sabotage each other are some of the features which otherwise employees thriving at Amazon do not like but for the sake of success in their career and organisational growth, they feel correct to do so.19

Effective training programs offered by Amazon to its employees on regular basis help in career growth and personality development of employees to accept new challenges and get adept to it.20

 There are various reasons due to which employees find that they are merely surviving under Amazon’s policies:

Employees at Amazon find they are surrounded with highly skilled and talented people who are extremely boosted to think creatively to overcome new operational challenges, devise innovative ideas to pave the path of success and meet the expectation of company and customers.20

Cut throat competitive working environment creates huge pressure to perform and surpass their team mates to survive in the job. Long hours of operation create mental stress and anxiety sometimes leading to frustration and depression. Working even at vacation and constant overtime completely destroys work life balance and thus hampers personal well being of employees. Surviving Employees find no support from management with regard to work life balance.20

Standards of performance set at Amazon are unexpectedly too high and unavoidable which creates pressure and distress among employees leading to job dissatisfaction and fear of job loss.

Culture of promoting unnecessary competition among co-workers and criticising ideas of peers in meetings prompts star performers to succeed in career and low performers to quit from the job. Company’s culture to not to include women in top management hinders female employees’ career growth and advancement which is against women empowerment guideline.

Yearly performance review process is based on rankings where managers discuss subordinates’ rankings. Employees are encouraged to criticise their peers by sending feedback to top management and low performers are thrown out of the company. However, Amazon has currently changed this policy and launched retraining program to give a chance to low performers to improve their performance and meet the expected standard.21

 There is a fear in the mind of old employees that they will be replaced by new and young employees as Amazon encourages to promote dismissal of old employees with more commitments in terms of responsibility towards family, parents due to which they will not be able to focus on work and contribute extra time to company as compared to young employees who have less commitments and more time to focus on work.

Management of Amazon is not sensitive towards employees who suffered from severe diseases such as cancer, miscarriages or some personal crisis and such employees are not given adequate time to recover and perform with their highest ability and are evaluated unreasonably on performance scale and are dismissed. This inhuman behaviour and work place policies hinder employees’ survival at Amazon and exhibit cruelty on the part of management’s responsibilities towards its employees.

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References

1. Jennifer V. Miller (2016). The downside of leaders who care too much retrieved from https:// www .smartbrief.com/original/2016/01/downside-leaders-who-care-too-much.

2. Lorie Corcuera (2016). The Disadvantage Of Being Too Caring retrieved from http://sparkcrea tionsinc .com/the-disadvantage-of-being-too-caring/.

3. Carl R. Rogers (2017). What's the Downside of Empathy? Retrieved from https://welldoing .org/article/downside-of-empathy-compassion

4. Katrina Clarke (2017). The pros and cons of empathy. Retrieved from https://www.cbc.ca/life/ wellness /the-pros-and-cons-of-empathy-1.3958869.

5. Nicky LaMarco (2018). The Disadvantages of Corporate Culture retrieved from https://small business.chron.com/disadvantages-corporate-culture-67042.html

6. Eugene Kim (2016). Amazon CEO Jeff Bezos shares his thoughts in a shareholder letter every year - here are the highlight retrieved from https://www.businessinsider.in/tech/Amazon-CEO-Jeff-Bezos-shares-his-thoughts-in-a-shareholder-letter-every-year-160here-are-the-highlights/articleshow/51931364.cms.

7. G. Sampath, “In Love With Work, Amazon Style,” The Hindu, September 17, 2015, accessed September 20, 2015, www.thehindu.com/opinion/op-ed/in-love-with-work-amazon-style/article7659931.ece.

8. Adeyemi Adetilewa (2019). 10 Pieces of Advice That Will Give Your Employees an Edge retrieved from https://tweakyourbiz.com/business/employee-performance-reviews/business-employees-edge.

9 key issues with Amazon's corporate culture, retrieved from https://www.beckershospital review.com/hospital-management-administration/9-key-issues-with-amazon-s-corporate-culture.html

10.Jeffery Bezos, Letter to Shareholders, 1997, accessed December 21, 2015, http://media.Corpo rate- ir.net/media_files/irol/97/97664/reports/Shareholderletter97.pdf.

11. Raj Bharti (2015). Learn From Amazon’s Leadership Principles retrieved from https://magazine .wharton.upenn.edu/digital/learn-from-amazons-leadership-principles/.

12. Larry A. Downs, “Work Hard. Have Fun. Make History,” LarryADowns.com, August 8, 2013, accessed January 7, 2016, www.larryadowns.com/2013/04/english/work-hard-have-fun-make-history.

13. Ibid.

14. Ben Bushby. A strong employer brand and EVP: why it’s important and where to begin retrieved from https://theorganicagency.com/news/three-benefits-of-building-a-strong-employer-brand-and-evp/.

15. Caroline Poynton (2017). The Power Of The Employer Brand retrieved from https://www .corpcommsmagazine.co.uk/features-and-analysis/view/the-power-of-the-employer-brand.

16. A Critical Analysis of Amazon's Approach to People Management retrieved from https://busin essteacher.org/reports/critical-analysis-of-amazons-approach-to-people-management.php.

17. Joel Holland, “The New Establishment: 2013,” VF News, October 31, 2013, accessed September 20, 2015, www.vanityfair.com/news/business/2013/11/new-establishment-2013.

18. Amazon revamps HR strategies to aid underperforming employees retrieved from https://www.r etaildive.com/news/amazon-revamps-hr-strategies-to-aid-underperforming-employees/434526/.

19. Alexandra Efthymiades (2015). What can Amazon teach us about workplace relations retrieved from https://www.personneltoday.com/hr/can-amazon-teach-us-workplace-relations/.

20.  Euzene Kim (2018). Amazon employees start their day by answering a simple question about work retrieved from https://www.cnbc.com/2018/03/30/amazon-employee-reaction-to-hr-programs-connections-forte.html.

21.  Kathy Gurchiek (2019). Amazon Commits to Investing Millions in Training retrieved from https://www.shrm.org/resourcesandtools/hr-topics/organizational-and-employee-development/ pages/amazon-commits-to-investing-millions-in-training.aspx

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ALPHABET’S GOOGLE Case study solution - Five Force Analysis of Google LLC, TOWS Matrix Analysis of Google Alphabet, Value Chain Analysis of ALPHABET’S GOOGLE, Alphabet INC organisation structure, Rationale behind Alphabet INC structure and diversification strategy, Google Alphabet’s resources and capabilities for competitive advantage in its industry


 ALPHABET’S GOOGLE Case study analysis and solution

About the case:

The case is written from the perspectives of Larry Page, CEO of Alphabet and Sundar Pichai, CEO of Google. The case focuses on opportunities and challenges faced by Alphabet’s largest business unit, Google. The case discusses Google’s history, its business model, and its role in Alphabet as it diversifies into other businesses. As Alphabet continues to implement an M-form structure to administer unrelated diversification, the adjacent business units will have a significant impact on Google. It needs to continue to innovate, even as it tries to retain the top talent that can create and commercialize new products. The road ahead comes with challenges in its core business in advertising, as well as the new corporate structure and accompanying moonshots of Alphabet.

Case Study Questions:

1. Is the industry Google Alphabet in, an attractive industry? What does it take to remain competitive in this industry?

2. Identify and critically evaluate Google Alphabet’s resources and capabilities using relevant  frameworks and concepts. In your answer you should use your evaluation of resources and capabilities to assess how Google Alphabet achieves competitive advantage in its industry.

3. What type of diversification strategy is Alphabet pursuing? Explain the organizational structure of Alphabet using its strategic business units? What is the rationale behind this structure and diversification strategy?

1. Is the industry Google Alphabet in, an attractive industry? What does it take to remain competitive in this industry?

With the advent of technology and increase in internet users, the industry in which Google Alphabet operates is not only attractive but also have potential to revolutionize the technology and internet world.

Porter’s five force model and TOWS matrix analysis will help to understand factors that will help Google to remain competitive in the industry.

Five Force Analysis of Google LLC

Low

Moderate

High

1. Rivalry among existing firms

 

 

High

Intense competition in the industry

 

 

High

Diverse range of products with diverse applications

 

 

High

Cost of switching of customers is low

 

 

High

2. Bargaining power of suppliers

Low

 

 

Huge number of suppliers

Low

 

 

Switching cost is very low.

Low

 

 

Diverse set of suppliers for diverse products make supplier weak.

Low

 

 

Size of Google is larger than its suppliers and in many cases only buyer from its suppliers.

Low

 

 

3. Bargaining power of buyers

Low

 

 

 

 

 

 

Huge and increasing demand of technological products

Low

 

 

Over dependence of Google services

Low

 

 

Dominance of Google through its search engine platform on internet.

Low

 

 

4. Threat of substitutes

Low

 

 

Cost of switching from advertisement on Google to substitute products such as TV, radio is moderate

 

Moderate

 

Excessive use of Google as search engine due to its customer friendly features

Low

 

 

Substitutes of Google do not offer same level of convenience, information and speed.

Low

 

 

 

 

 

 

5. Threat of New entrants

Low

 

 

 

 

 

 

Very difficult to build brand by new entrants.

Low

 

 

Huge fund required to develop infrastructure to render services to customers.

Low

 

 

Very difficult to enter into search engine service as Google has more than 85 % of online advertisement revenue.

Low

 

 

Strict licensing and regulatory requirements to enter in the industry.

Low

 

 

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TOWS Matrix Analysis

 

Strength

  • Strong brand image with presence in the whole world.
  • Intellectual property rights on its products.
  • Leader in web search, video sharing, online advertisement, browsing and many other products.
  • Strong financial position with efficient acquisition ability.
  • User friendly products.

Weakness

·         Excessive advertisement on its products such as you tube, browser, Gmail.

·         Huge reliance on advertisement revenue.

·         Failure in retaining talented personnels.

Opportunity

·         Huge demand and increase in internet users and mobile phone users.

·         Google Fiber, Cloud computing, Artificial intelligence, Android OS

·         Focus on Non ad business such as Market penetration in consumer electronics.

·         R & D in Google Glasses and Google Play and other innovative technologies.

·         Investment in cloud computing, Google fiber expansion and Android OS to increase its non advertisement revenue.

·         Continuous technological upgradation in Android OS to capture mobile industry and compete with rivals such as APPLE IOS.

·         Developing and designing user friendly products in consumer electronics segment.

·         Avoidance of unrelated ads on its platform and display user need based ads.

·         Offering better job positions, opportunities and pay to its talented employees to make them loyal.

·         Development of innovative non ad based revenue generating products and penetrating new markets through diversification.

 

Threat

·         Intense competition

·         Antitrust controversies with European Union and US law makers.

·         Investment in moon shot projects and other bets whose success is uncertain.

·         Downgrading of market share in online advertisement.

 

·         Use of its strong brand reputation and patent rights to dominate over competition in market.

·         Acquisition and Investment in promising business opportunities where success is viable in short interval of time and reduction in businesses which is non value generating to the organisation.

·         Reduction in advertisement and banning of bad content ads to keep customers satisfied while using Google services.

·         Focus on other products more intensively to increase revenue rather than to focus on advertisement revenue.

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2. Identify and critically evaluate Google Alphabet’s resources and capabilities using relevant  frameworks and concepts. In your answer you should use your evaluation of resources and capabilities to assess how Google Alphabet achieves competitive advantage in its industry.

chain activity

Strategy

Value created

V

R

I

O

Result

Inbound Logistics

 

 

 

 

 

 

Sustained Competitive advantage

 

Content that Google shows to its users on search results come from private and organisational internet users free of cost.

No inbound logistics cost for its search engine business.

 

Yes

 

yes

yes

yes

Sustained Competitive advantage

 

Extensive range of hardware, equipments and tools to conduct its operations.

Capacity to meet unlimited search on its search engine.

 

Yes

 

yes

yes

yes

Sustained Competitive advantage

 

Use of dedicated supplier site to maintain strong relationship with its suppliers.

Protection of new products and services’ ideas to its competitors.

 

Yes

 

yes

yes

yes

Sustained Competitive advantage

 

Employees of Google are major inputs who develop profitable ideas and convert them into Google services. In the software application android, inbound logistic begins with cell phone apps created by developers.

More free apps than competitors.

Yes

 

yes

yes

yes

Sustained Competitive advantage

 

 

 

 

 

 

 

 

Operations

 

 

 

 

 

 

Temporary competitive advantage

 

Its offices are designed creatively with various features such as sharing cubes, video games, pool tables, pianos, cafes and others. 

Promotion of innovation and innovative thinking within the organisation.

Yes

 

Yes

No

yes

Temporary competitive advantage

 

Operations are based on thinking out of the box and doing things in unconventional way.

Innovative products to remain competitive in market.

 

yes

yes

No

Yes

Temporary competitive advantage

 

Design and development of technological capabilities and advanced search algorithm.

Display more appropriate and relevant search.

yes

yes

yes

yes

Sustained Competitive advantage

 

Development of innovative application for internet users to suit customer needs.

Unique algorithm tools to dominate in search industry.

 

yes

yes

yes

yes

Sustained Competitive advantage

 

Multiple projects are performed at same time in teams to complete it in stipulated time to meet the urgency of the project.

Enhance ability to access to online information.

yes

no

no

yes

Temporary competitive advantage

 

Continuous development and maintenance of mobile apps.

Provide user friendly interface on mobile app.

yes

no

no

yes

Temporary competitive advantage

Outbound Logistics

 

 

 

 

 

 

Temporary competitive advantage

 

Core business of Google is search through its browser and display of advertisement into search results. There is no outbound logistics associated to it.

Directing high quantity of web users to specific sites and sorting pre-qualified visitors for these sites using search history and keywords.

yes

yes

yes

yes

Sustained Competitive advantage

 

Online sale channels and business partners to generate sales throughout the globe.

Delivering information and application based products at lower cost to its users.

yes

no

no

yes

Temporary competitive advantage

 

Very few physical stores for Google merchandise showcasing Chromebooks, Chromecasts, Android phones etc.

Cost reduction due to less physical outbound logistics.

yes

no

no

yes

Temporary competitive advantage

 

Revenue generation through advertising products such as Google Pay per click, Ad Sense etc.

Increase in profitability

yes

no

no

yes

Temporary competitive advantage

 

Updating of Android OS on regular basis.

Adapt changes in Mobile operating system to its competitors and remain competitive.

yes

no

no

yes

Temporary competitive advantage

Marketing & Sales

 

 

 

 

 

 

Temporary competitive advantage

 

Integration of online and offline marketing channels to promote its online ads business.

Strong brand positioning and reach to mass consumers with low cost of promotion.

yes

no

no

yes

Temporary competitive advantage

 

Most of the sales are done through online sales channel.

Worldwide presence on internet due to its search engine.

yes

no

no

yes

Temporary competitive advantage

 

Use of its own platform to promote its products and services.

Reduction in promotion cost

yes

yes

yes

yes

Sustained competitive advantage

Services

 

 

yes

No

no

yes

Temporary competitive advantage

 

Google forum, Customer helpdesk and customer helpline number to assist and resolve queries of customers.

Brand association and loyalty.

 

yes

No

no

yes

Temporary competitive advantage

 

Customer focused and need based products and services.

High satisfaction and Less lost customers.

yes

No

no

yes

Temporary competitive advantage

Procurement

.

 

 

 

yes

yes

yes

yes

Sustained competitive advantage

 

Procurement of hardware, servers, fiber optic cable and other equipments are done using verified suppliers.

Best technological and innovative products delivered to customers.

yes

yes

yes

yes

Sustained competitive advantage

 

Google deals in rendering information services to its clients. Major procurement for Google is to hire talented people to render best information services to its users.

Easy to use and customer focused applications being designed and developed for its clients.

yes

yes

yes

yes

Sustained competitive advantage

Technology Development

 

 

 

 

 

 

Sustained competitive advantage

 

Development of new search applications such as Google Map, Google earth, Google incognito, development of new and innovative apps for android OS.

Multiple apps to keep users engaged & Recognition as innovative brand.

 

yes

yes

yes

yes

Sustained competitive advantage

 

Google’s advanced analytics in measuring the efficiency of its users on search platform.

Creates efficiency, speed and innovativeness in search.

yes

yes

yes

yes

Sustained competitive advantage

HRM

 

 

 

 

 

 

 

 

Centered on “Googleyness,” an intangible trait in terms of ability to work in teams, handle ambiguity and think out of the box.

Promotes Innovation and improves employee performance.

yes

yes

yes

yes

Sustained competitive advantage

 

Multiple training programs

Increases employee morale and job satisfaction.

yes

no

yes

yes

Temporary competitive advantage

 

Culture of hiring best in the industry and offering best salary in the industry along with huge incentives.

Team of best employees in the industry.

yes

yes

yes

yes

Sustained competitive advantage

Firm Infrastructure

 

 

 

 

 

 

Sustained competitive advantage

 

Huge financial resources with market capitalization of 798.45 Billion with more than 118000 employees.

Acquisition and strong borrowing capacity

yes

yes

yes

yes

Sustained competitive advantage

 

Huge investment in data centers, switches, storage centers/ devices and fiber networks.

Increase profitability and brand image.

yes

yes

yes

yes

Sustained competitive advantage

 

More than 6,00,000 servers racked in thousands of data centers in different countries mostly in USA and Europe.

Strong global supply chain management.

yes

yes

yes

yes

Sustained competitive advantage

 

Huge investment in R & D on regular basis to develop new products and services.

Large range of product offerings to its users.

yes

yes

yes

yes

Sustained competitive advantage

 

 

 

 

 

 

 

 

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3. What type of diversification strategy is Alphabet pursuing? Explain the organizational structure of Alphabet using its strategic business units? What is the rationale behind this structure and diversification strategy?

Alphabet INC is a giant conglomerate and holding company for Google LLC and more than 200 companies which are subsidiaries to it. It has online, digital and moon shoot companies under its verticals which are independent from one another. From 2001 to 2020, the company has done more than 200 acquisitions. If we consider companies acquired, it appear to be unrelated diversification, however, when these companies are evaluated on the basis of their activities, most of them are generally to support Google search advertising which is the main activity of Alphabet Inc. Acquisition of Alphabet Inc proves to facilitate diversification strategy. These acquisitions are very specialized in social networking, intelligent home systems, robotics, communication, e-commerce, navigation, office software, and their core capabilities such as search engine, mobile OS, advertising or information technology (voice and image recognition). Diversification strategy of Alphabet Inc is twofold:

Related diversification through product and service innovation and acquisition

Related diversification in terms of acquiring and developing internet and technology based products and services to capture the global internet market such as cloud computing, Android OS, R &D in Artificial intelligence and so on.

The main service of Alphabet Inc is Google online search and major revenue is generated through online advertisement. It has diversified into various internet related products and services such as Gmail, Google drive, Google my business, Google map, Google photos, YouTube; enterprise products such as Ad sense, Ad Word, Pay per click and other utility services such as Google translate, Google news, Google drive, Google map, Google language. It enabled the company to reach to a large number of internet users and make them dependent on its products and services. It helps the company to create consumer base of Google dependent internet users. It also enables the company to position itself as one stop solution venue for all internet related services. Chrome had 60 % market share in web browsing in 2017. Google map allows retailers to advertise their address and products through promoted place application.

Unrelated diversification through company and product acquisitions for expansion

From search engine business in 1998, Alphabet Inc. offers the widest ranges of products and services termed as other bets. Other Bets includes businesses like Access (Google Fiber), Calico, CapitalG, GV, Nest, Verily, Waymo, and X.

Continuous investment in development and acquisition of products such as artificial intelligence, machine learning and robotic technology, health care, venture capital funding, energy, self driving car, drone delivery and R& D in many moon shot projects, consumer hardware, airborne wind turbine, learning thermostats, smoke alarms and many other business segments have led to diversification of Alphabet’s business into other technological segments and industries. First mover advantage is the main Alphabet competitive advantage in relation to the majority of these products and services.

Acquisition of HTC Google will allow engineers to more tightly integrate hardware and software and differentiate its high end pixel phone from Apple I phone X. Acquisition of Android for smartphone OS held 85 % market share in 2017.

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Alphabet INC organisation structure

Alphabet INC

Google LLC

Other Bets

Ø  YouTube

Ø  Google Map

Ø  Ad sense, Ad Word, Pay per Click

Ø  Android

Ø  Nest Labs Hardware from Google such as Pixel,

Ø  Chrome

Ø  Google Cloud

Ø  Chronicle

Ø  Gmail

Ø  Google Play

Ø  ATAP Advance technology and projects

·         Jacquard

·         SOLI

·         Spotlight series

Ø  Google Business

Ø  Google Play

Ø  Google Translation

Ø  Google Analytics

Ø  Ad Mob

 

Ø  Access Google Fiber

Ø  Verily Healthcare

Ø  Sidewalk Labs

Ø  Calico

Ø  GV venture arm for early age startups

Ø  Google Capital equity investment in later stage start ups

Ø  Jigsaw technology incubator

Ø  Deep Mind AI research

Ø  X Secretive R&D Labsfor moon shot technologies

Ø  Titan Aerospace solar power drone to spread internet access

Ø  Makani  Airborne wind Turbine

Ø  Loon internet access through hot air balloons

Ø  WayMo Autonomous driving

Ø  Wing Drone delivery of Freight

 


Rationale behind Alphabet INC structure and diversification strategy

·         It will help company to become process driven and focus on core capabilities and business operations of Alphabet Inc from where it generates most of its revenue.

·         It aims to increase competitive features and innovation potential and competitive power of the company.

·         Related diversification enables Alphabet to extend its resources and capabilities to create value. It will also help to develop and exploit economies of scope between its businesses.

·         Unrelated diversification enables Alphabet in attaining financial economies in terms of cost saving through improved allocations of financial resources based on investments and restructuring of assets.

·         It will help in maximizing profit through creation of closed eco system. With inter connected products and services in its product portfolio, users are prompted to use additional services thus allowing company to generate profit from different products and services.

·         It will help the company to run lesser risk of anti-trust violations and is also better able to account for income streams from various subsidiaries easily.

·         It enables company to enter new markets and improve existing market shares.

·         It allows internet giant to empower its current products and services through exploration of other valuable tech ventures to flourish its technological capacities and penetrate new market and users for its services.

·         It enables interdependency across different industries and sectors by promoting importance of internet, digital communication and other technologies in the diverse business organisations.

·         It will help to focus first on developing the user experience before monetizing a product.

·         With the diversification created through acquisitions and division of organisational structure into core revenue generating business and other bets, Alphabet will be able to manage strict financing on the ongoing projects and create profitability for it.

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References

·         Prudence K Magezi ( 2019). PORTERS FIVE FORCES OF GOOGLE. Retrieved from https:// www.123 writing. com/sample/porters-five-forces-of-google-2019

·         Annual revenue of Google from 2002 to 2019 retrieved from https://www.statista.com /statistics /266206/googles-annual-global-revenue/

·         Nathaniel Smithson ( 2019) Google Five Forces Analysis (Porter’s Model) & Recommendations retrieved from http://panmore.com/google-five-forces-analysis-porters-model

·         Prudence K Magezi (2019). Porters Five Forces Of Google retrieved from https://www.123writing .com/sample/porters-five-forces-of-google-2019

·         Andrew Thompson (2017) Google’s SWOT Analysis & Recommendations. Retrieved From http://Panmore .Com/Google-Swot-Analysis-Recommendations

·         Kiesha Frue (2020) SWOT Analysis of Google. Retrieved from https://pestleanalysis.com/google-alphabet-swot-analysis/

·         John Dudovskiy          (2017) Google Value Chain Analysis: Benefiting from No-Cost Inbound Logistics. Retrieved from https://research-methodology.net/google-value-chain-analysis/

·         Value chain Analysis retrieved from https://writepass.com/journal/2016/11/internal-analysis-ofgoogle%EF%BB%BF

·         Abhijeet Pratap (2018). Alphabet Strategic Analysis. Retrieved from https://notesmatic.com /2018/09/alphabet-strategic-analysis/#Value_Chain_analysis

·         Abhijeet Pratap (2018). Alphabet Resources and Capabilities. Retrieved from https://notesmatic .com/2019/04/alphabet-resources-and-capabilities/

·         Kofi Nayantakyi (2019). List of companies under Alphabet. Retrieved from https://www.jbklu tse. com/list-of-companies-under-alphabet-google-parent-company/

·         Mathew Emmanuel Pineda (2018) The business strategy of Google. Retrieved from https://www.versiondaily.com/business-strategy-of-google/

·         John Dudovskiy (2017).Alphabet (Google) Business Strategy and Alphabet (Google) Competitive Advantage. Retrieved from https://research-methodology.net/alphabet-google-business-strategy-and-alphabet-google-competitive-advantage/

·         Afyon Kocatepe Üniversitesi Sosyal Bilimler Dergisi / Cilt: 20, Sayı: 3, Aralık 2018, 271-289 Afyon Kocatepe University Journal of Social Sciences / Volume: 20, No: 3, December 2018, 271-289  Diversification Strategy in Internet Industry: Case of Google Inc.

·         Mohammadhasan Moghadasi (2019).Ershad Damavand Institute of Higher Education Corporate strategy analysis: A case study of Alphabet Inc. Retrieved from https://www.research gate.net/publication/334812560

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