“Just as energy is the basis of life itself, and ideas the source of innovation, so is innovation the vital spark of all human change, improvement and progress” -Ted Levitt
After much thought and deliberation, I have identified one company that has succeeded in initiating a strategic innovation: Google. In 2009, Google reported roughly $23.65 billion in revenue and continues to grow annually. The question remains, how does Google do it? As we will examine throughout this article, we can attribute numerous factors to Google’s success. Among them we will focus on Google’s diverse range of product offerings, Google AdWords, as well as Google’s unique corporate culture which has paved the way to a work environment which is conducive to creativity and innovation.
Google has created services and tools for the general public and business environment alike; including Web applications, advertising networks and solutions for businesses. Of the variety of products offered by Google, perhaps the most popular is the search engine. Google’s search engine makes up roughly 64% of the market share of search marketing, followed by Yahoo with around 21%, and Microsoft with an estimated 8%. However, simply limiting Google to its search engine would be a sore mistake. Google offers a plethora of innovative products such as Gmail, Googledocs, Youtube, SMS texting services, Sketch up, iGoogle, Google Health, Google Chrome, Google Checkout, Google Book Search, and so much more. Google has revolutionized the way the world receives its information.
Due to Google’s strong work force, unique methods of acquiring profits, state of the art technology and products, and creative work environment Google is able to remain on the cutting edge of industry innovations. Invention is a necessary phase of innovation. It all begins with a problem which must be solved using limited resources. This leaves the company with the task of collecting new knowledge regarding the issue and evaluating that knowledge based on selective criteria in order to make the best decision. In terms of Google, we could take a look at any one of their inventions regarding technology to support this theory. For the moment, let’s examine Google Chrome, their latest web browser. We can note this as an invention because it was generated after much serious thought and time spent on R&D. The technology used in Chrome was evaluated and decided upon as the best possible solution to the problem of creating a new web browser.
Google is continuously improving its strategy and adapting to the needs of the market. As we will analyze in the second part of this article, we will prove exactly how Google has succeeded in implementing strategic innovations.
According to online sources, a strategic innovation is defined as “the creation of growth strategies, new product categories, services or business models that change the market and generate significant new value for consumers, customers and the organization.” As per this definition, it is quite clear to see how Google fits this mold. Back in 1997, when Larry Page and Sergey Brin first came up with the idea for their search engine technology, they were on their path to revolutionize and improve the process of online research. As a result, by 1998 Google had been named the top search engine. By using their unique business model (Google AdWords, a quick and easy way for companies to advertise online), Google was able to generate the wealth necessary to grow and expand the company in other domains, create new product categories. Google’s products and services have generated significant new value for consumers that its competitors cannot even dream of competing at the same level.
An innovation is linked highly to success, it can be associated with the “initial economic application of the new solution to a problem” (Burr 2004 p.25). Furthermore, an innovation is generally defined by its market launch and the process of market diffusion. Therefore we have an innovation when we mix the knowledge and technology required for an invention with the business tools necessary to take that idea to the market place and establish that product as profitably. In terms of Google, it is safe to say that within one day after Google announced a beta version of its new open source browser, the general public reacted strongly with roughly 6,000 news stories and 50,000 blog postings in just one day. How did Google attract this kind of attention and launch their new product/invention? Well the answer is simple; they found creative and innovative methods of introducing it to the market. They used a unique comic book approach which outlined the problem in simple terms; they created a corporate blog, a Wikipedia post, a YouTube how-to video along with a YouTube press conference video, in addition to using the online social networking site Twitter to promote their product.
All in all, it is quite clear for us to see how Google is a top of the line, innovation driven company that is continuously improving. Based on the wide range of products/services available to consumers world-wide and the immense value added by these products/services it is hard not to praise Google for being such a well-known icon. Google has become so well-known that people are actually using it as a verb “to Google.” As of 2006, the verb Google actually became an accepted part of the Oxford English Dictionary. What a great thing to become a part of everyday vocabulary. That is what we call innovation reaching glorious heights.{t}
Hannah is a senior at Bowling Green State University in Northwest Ohio studying International Business,
Management, French, and Entrepreneurship. Hannah has had valuable internship experiences at Bendix Commercial Vehicle Systems as well as Affirm Global Development. Hannah looks forward to what the future hold after graduation in May 2011.
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