GOOGLE STRATEGIC MANAGEMENT Essay Example | Topics and Well Written Essays - 2000 words

GOOGLE STRATEGIC MANAGEMENT - Essay Example But in line with this selection, a comprehensive tool vested in the use of a VIRO analysis is implemented in critically evaluating the credibility of the selected option for the company. The VIRO analysis will be simplified in a manner that takes four major independent variables, which are tested against four other dependent variables. The independent variables are given as financial resources, human resources, material resources, and nonmaterial resources. Each of these will be tested against value, rareness, imitability, and organization in place at Google Inc. The cost Leadership Option Generally, the cost leadership option is in place to ensure that the company gains competitive advantage by taking consumers away from competitors and bringing them to the side of Google Inc. To effectively do this, there are two major approaches for the company to follow. In the first instance, there is the need to increase market share by reducing prices (Horkheimer and Theodor, 2007). This may s ound as an irony as a pair of objectives that cannot be achieved hand in hand. But from a very technical viewpoint, it is possible to both reduce prices and increase market share by using the cost leadership option (Lessig, 2009). ... This is because it has already been established that when there is increase in revenue, there must be a corresponding reduction in expenditure to make profitability possible. Meanwhile, the cost of production accounts for one of the highest sources of expenditure for most companies, of which Google Inc. is not exception (Barthes, 2008). Since 2004, Google’s cost of production has been said to be going up steadily especially as the company started engaging in a number of divestitures that are aimed at increasing the revenue pool of the company. To effectively use the cost leadership option, the company must be prepared to focus attention on the need to reduce most of its identified cost, especially internal costs that bring about cost sharing situations (Althusser, 2011). This way, it will be possible to produce goods and services at a much reduced cost, which will ensure that even if prices are charged at all-time low, market share will not be affected. Using VIRO Analysis to analyze the Cost Leadership Option Having identified the cost leadership option as the most viable option for Google, this section of the paper uses the VIRO analysis to critically break the option down into four major business constituents of Google Inc. these four constituents are financial resources, material resources, nonmaterial resources and human resources. Each of these four constituents shall be analysed using the four acronyms of VIRO, which are value, imitation, rareness and organisation. Financial Resources As far as the value of Google’s financial resources are concerned, one major question is posed. This is the question of how expensive the financial resource is (Gramsci, 2007). It would be established that Google is one of the most fortunate global IT companies that has a