Aha! I was reading professor's mind when writing my last post about competitive advantages. Maybe I should consider being a psychic... who knows. But anyways.
I bet that if you conduct a survey among business students or business owners about what a firm must do in order to succeed in business Competitive Advantage will be in top 3 for almost everybody. Now why isn't every company applying these principles to their business? Is it because people don't practice what they preach? Maybe... But most likely, and again stating the obvious, competitive advantage is not easy at all to achieve.
Since I am involved into internet marketing I have to touch on Google to examine its competitive advantage. They are a multibillion dollar market leader and are involved into so many projects that it is hard to count or state in this blog entry. But their main product and advantage is their search engine. They are by far the market leader - according to stats over 60 percent of all searches are conducted through Google. Yahoo follows with numbers close to 20 percent and MSN is in the 10s and the rest are traling far behind. The reason they were able to acquire such great results is because instead of focusing on getting paid off right away from displaying paid advertisement as free relevant search results they created a search engine that focuses on fast and accurate results. Multiple algorithms, checks and balances were and are being created as we speak to guarantee that users get the best and most relevant websites pertaining to what they are looking for. In order to maintain speed Google developed an intricated system spiders that scan your website and store data on servers all over the country. Once the system was developed and market share was acquired Google introduced a platform to monetize their search engine - Pay Per Click system: which at this moment is one of the most cost effective and relevant advetising systems.
Government protection can be applied to roads and utilities. It only makes sense that one company manages electricity in certail large areas in order to maintain an effective system and be able to handle emergencies in a more efficient manner. Even though it does make sense to me that this has to be done and government protection does provide competitive advantage to companies I do not personally like using it as an example because it is imposed rather than earned. Sure it takes time, resources and enormous amount of paperwork to apply and secure patents but once you get them nobody can touch you (at least for a certain amount of time). In a business world situation is much more dynamic and that's what I love about it.
That's all for now folks... come back later :)
Wednesday, November 14, 2007
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2 comments:
Thank you for the inspiration! I have written my post! And now off to reading yours! *reads*
I was contemplating whether or not Google could be an example of a harborer of major market share, but with your explanation, I can kind of tell that they are. It seems like you did some crazy research on their algorithms and standings in relation to the other search engines, too. Which is definitely good to support your argument. I like Google myself, they use very effective coding and server implementation techniques. The Distributed Server Method also serves them well -- they supposedly dispose of 1000s of computers a month, and still keep their site running. That is something to be amazed about. Also, have you looked into Ask.com? They have redone their search engine, and I believe that they might actually pose a threat to Google. It is very unique in terms of how it operates a search, and the Ajax programming definitely brings perks as site implemented form-fillers (instead of the one Microsoft IE7 gives you [auto form]).
Government utilities are very much companies that hide under the "smelly wing of government protection" (Karup's Post). I guess it isn't so smelly in their case since utilities are very important, and the government safeguarding of these companies actually provides a sense of security for us, the consumers, as well?
Nice Post! And on time, like myself, I see =).
Great log!!
I think that you are correct about Google. They have the right stratetegies which have lead them to the right market. Their search engine not only provides good quality information but also extra help to take you to the correct links. They are positioned in the market strongly but sometimes I have found some other search engines more effective such as Yahoo, and Ask.com maybe they are trying to steal users by providing a better service. I wouldn't be surprise and I wonder that they are doing right now to come out with better service to users so we do not have to look around for useful, accurate information in some other search engine.
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