Google business challenges in the China market essay – Business Research Case Study
- Abstract/Executive Summary. A synopsis of the issue or problem that you have identified your chosen organisation needs to address, including a brief summary of the content of your assignment. 300 words
- A short background to the organisation you have chosen to study and its environment. 300 words
- Literature Review. A critical examination of the topic you have chosen to address, based on your research of authoritative sources. 1,400 words
- Critical Evaluation. Of secondary data in relation to the issue or problem that you have identified within your chosen organisation. 1500 words
- How your chosen organisation could improve its operational performance based on your research. 500 words
- Reflective Journal. To reflect upon your professional, academic and employability skills. 1,000 words ( See the picture Gibbs reflective cycle, to follow the structure) Google business challenges in the China market essay
- Using Harvard Referencing system, a list of your academic sources in alphabetical order
- For any additional information eg annual accounts, diagrams/charts/tables/graphs or any visual images
GOOGLE AND ITS BUSINESS CHALLENGES IN THE CHINA MARKET
Table of Contents
- b) Critical Evaluation: Analysis of secondary data in relation to the issue or problem of Google challenges in the Chinese market………. 11
GOOGLE AND ITS BUSINESS CHALLENGES IN THE CHINA MARKET
Abstract and Executive Summary
The Google Corporation is regarded as one of the fast-growing and largest search engines all over the globe. The core mission of Google is to make information universally available and useful to anyone who tries to access it. In fact, Google has been ranked as one of the top most visited websites in virtually all countries and states. The Google Company enjoys massive recognition in all continents and countries in the world over. However, there are some countries where Google searches have been banned and this has resulted in unimaginable losses for this company. One such company is China, where internet censorship has been enacted into law. This means that the Chinese citizens are not allowed to access internet websites such as Google due to political and legal reasons Google business challenges in the China market essay.
The issue of internet censorship is the main problem that affects the Google Company in China. This is because most of the information is prohibited from being used or made accessible to the Chinese population. In addition, Google Corporation has faced numerous other challenges in China such as the creation of a special form of Google search for use by the Chinese population. The China based Google is known as Google.cn and it operates as a special search engine in this country. The biggest challenge that Google has been facing from China is that the Chinese government forcefully created a censorship on this search engine. The reality of this problem is that Chinese users are not able to access any sort of information on topics related to democracy, politics and even current affairs. From a business angle, Google has indeed incurred immense losses because it has lost a huge portion of its customers.
This research paper mainly focuses on the business challenges that Google has faced in the Chinese country. The essay provides a review of literature that is coupled with a critical evaluation of this persistent problem. The paper provides a detailed account of how the Google Company has suffered from issues of internet censorship and encryption of information within the country of China. In addition, this paper illustrates how this censorship has cost huge losses in Google, decreasing popularity among the Chinese citizens and intense competition from other search engines. The essay concludes by providing recommendations that can help the Google company to remain marketable and profitable in China. Google business challenges in the China market essay The most viable recommendation is that the Chinese government should become less stringent on Google and ease the rules and regulations on internet censorship. This should then be replaced by internet and website monitoring where the government monitors the activities of the Chinese people online. In turn, this can allow people to search for information via Google and not worry about accessing little or censored materials.
Key words: Google, China, internet, censorship, encryption, search engine.
China is a country that is largely characterized by a booming economy and it has emerged as the second largest economy in the world. This country enjoys an economic growth of at least 10% on an annual basis (Luckerson 2014, p. 78). Google business challenges in the China market essay This figure has caused many international and foreign companies to salivate at the slightest chance of tapping into this rich Chinese market. The business culture of China is different from other parts of the world because it thrives at a very high level (Hempel 2012, p. 106; Vericat 2010, p. 183).These factors contributed to convincing the Google Company to set up its business operations in China. The Google Company was founded in the year 1998 and it has managed to establish itself in numerous countries including China (Zhang 2013, p. 456). Google is originally an American based firm that enjoys a strong and robust corporate philosophy. The establishment and launch of Google in China have been full of many challenges.
The main one is caused by the internet censorship that has affected many websites and blogs such as Google. The special form of Google in China, which is Google.cn, was intended to be used only by people in China (Zhang 2013, p. 456). On the part of Google, this cost them a huge chunk of resources as well as manpower to have this internet site set up. However, the only results that Google has received from China are negative consequences and challenges in its line of business (Cohn 2007, p. 32). Firstly, Google has faced a huge cyber-attack in this country that was caused by malicious people who were trying to gather confidential information on the human rights activists. Secondly, a clampdown occurred in the internet in China and it was prolonged for a long period of time (Peter 2014, p. 118).
The Google Company is an American based firm that operates as a multinational corporation. This is because Google has managed to provide its services to virtually all states and nations in a worldwide perspective (Leslie 2011, p. 2541). Specifically, Google provides internet services in the form of online-based advertising, cloud computing and additional software. The Google website has rapidly risen to become one of the leading search engines in the globe. This company was initially founded by two PhD students known as Sergey Brin and Larry Page (Pichai 2014, p. 2). Google business challenges in the China market essay These two students were studying in Stanford University where they made this brilliant innovation. Both of them are speculated to own about 14 % of the total shares in Google (Farrell 2008, p. 15). In addition, they control over 56% of the stocks and the voting power as well (Rutkin 2014, p. 23).
The Google Company became a privately owned business in the year 1998 and it began listing on the stock market in the year 2004. According to the two original founders Page and Brin, their mission and core aim was to make the information from all parts of the world accessible and useful in a universal manner (Rutkin 2014, p. 23). The rapid growth of this company has since triggered a number of partnerships and acquisitions that have gone beyond the initial search objective of this engine (Broude and Hestermeyer 2014, p. 297).The rapid expansion of this site is linked to its users who account for one billion searches on a daily basis. In fact, this popularity with Google has even resulted to this term being used to refer to the process of searching for information on the internet (Rutkin 2014, p. 23).
The Google Corporation has been established in many countries across the globe and in some of these countries, a special website has been set up (Margolis 2011, p. 37). China is one of the countries that have been privileged to enjoy a special form of Google search. Google China is actually one subsidiary of the Google engine. This website is ranked number three in China after the Baidu and Soso search engines (Rutkin 2014, p. 23). The Google China search engine was first founded in the year 2005 and it was headed by Kai-Fu Lee. The latter served as a former business executive of Microsoft Company in Asia. It was in the same year of 2005 that Google introduced a language interface for China (Levy 2006, p. 18).
This is what resulted in the Chinese based search engine of Google.cn that has been facing numerous challenges from the government of China (Neve 2013, p. 112). Google initially began its operations in China and with each passing year, there has been a basket of challenges this firm has to deal with on a constant basis. This paper is a research essay that provides insightful and incisive information on the issue of business challenges faced by Google in the Chinese country.
1.1 Organizational issues of the Google Corporation
Since the inception of Goolge.cn, there have been increasing challenges that have been affecting the process of conducting business for Google. These challenges began in the year 2009 when the government of China blocked any access to Google and YouTube sites (Levin 2014, p. 19). The reason for this censorship was that Google searches were bringing up footages that showed the security army of China beating and assaulting the Tibetans. This resulted in the access to other Google services to be denied to users who were on an ad hoc basis (Zan and Tan 2012, p. 475). This tussle made the Chinese manager of Google, Kai-Fu Lee to make an early departure from the company and he cited reasons that the Chinese government has introduced stringent policies that were affecting internet searches (Elgin and Sager 2004, p. 16).In fact, this censorship had lead to the decrease in Google searches.
This made the rival companies such as Baidu and Soso to increase their customer base (Zeng and Greenfield 2015, p. 48). It is indisputable that Google China has served as a market to the internet users of China and others in the mainland. The number of Chinese people who use the internet is estimated to be at 338 million as per the year 2010 Google business challenges in the China market essay (Grossman and Beech 2006, p. 53). This number has been steadily increasing when compared to the previous years. The main competitors of Google are the Soso and Baidu companies that are often regarded as the “Google of China” because of their close resemblance to Google itself (Einhorn et al 2010, p. 35).
However, Google has been facing a number of problems that have affected the manner in which business is conducted. Google enjoyed popularity among the Chinese fraternity for a number of years, after which it started losing its market in the next consecutive years (Zeng and Greenfield 2015, p. 48).
This partially began when internet content started to be seriously and heavily censored by the government of China. What’s more, any person who searched for any information on the Google engine experienced very prolonged delays (Brenkert 2009, p. 453). By the year 2008, the problem had become so worse and this gave other search engines in China a higher popularity. In fact, this is what made Baidu.com to become the leading search engine among the Chinese population (Zeng and Greenfield 2015, p. 48). Therefore, in order to compete with Baidu, Google was forced to create its own special website and it later agreed to censor its content and searches (Eko et al 2011, p. 12).
2.1 Google partial censorship in China
The problem faced by Google in China after it established its foothold indeed shook every foundation of the company. The introduction of Google.cn in China meant that Google was expected to co-operate with the set rules and guidelines of the Chinese authority. (Ching 2014, p. 9; Tan and Tan 2012, p. 469; Cronan 2014, p. 22). Furthermore, the launch of Google in China enabled this search engine to operate as the official Internet Service Provider or ISP for a given period of time (Hamilton et al 2009, p. 146).
China is a communist country, which means that the authority expects all the ISP companies to censor their internet content and remove all searches and information that would be considered illegal. The subjects or topics that are censored include political subjects such as Tibet, democracy and elections (Kelly 2015, p. 1). In addition, this censorship is also extended to political matters such as “falun gong”, which is a spiritual and religious movement that was banned by the government of China. In addition, the “dalai lama” was also totally banned and its results censored over the internet because it closely relates to pornographic material.
This means that the information that the Chinese population would access via Google was limited because the company had to comply with the self-censorship rule of China (Levy 2011, p. 96). The market size of Google in China is so small and minute when compared to other countries such as America or Britain (Wagner 2013, p. 79). In the year 2005, Google.cn had over 100 million users, but the number drastically dropped to a mere 8% of this figure. The market problems were also worsened by the fact that Google searches were very unreliable and slow due to the censored content (Min 2014, p. 109).
The problems facing Google and its mode of conducting business in China have also been worsened by the elaborate campaign to tighten the security over the internet (Dann and Haddow 2008, p. 219; Zakaria 2010, p. 34). For instance, the Chinese government had draped a darker cloud over the online-based communications. Consequently, this had made it much worse and overly difficult for Google and its close customers to conduct business (Min 2014, p. 109). Google business challenges in the China market essay What’s more, the Chinese exporters have had to struggle to place Google advertisements, so that they can appeal to the buyers abroad (Smith 2010, p. 23). For instance, the biotechnology experts have faced many problems because they could not use Google to calibrate their laboratory equipment. With the removal of Google, there was no way that these people could locate online instructions to carry out this process (Min 2014, p. 109).
2.2: Google decreasing popularity as a search engine
The problem of internet censorship for Google directly meant that its popularity as a search engine would begin to decline drastically. This is because the internet communication crisis also affected the email services provided by Google that is, the Google mail service
(Zakaria 2010, p. 36). These issues resulted in serious business losses for Google because their clients could not exchange Gmail messages over their site. What’s more, Google applications such as the Google calendar could also not be accessed by the Chinese people. In terms of business, this created an annoying drainage and heightened frustration for Google because they could not get through to their loyal clientele (Zhang 2013, p. 456).
China believes that this internet censorship is one of the suitable ways to control traffic on the internet and ensure that people only access information that is suitable for them (Flannery 2015, p. 104). In addition, this avoids a scenario where information is leaked from China into other rival countries and super powers. Google as one of the largest search engines has lobbied for a revision on the strict laws of internet censorship. The increase in the pervasive blockage of Google related searches in China has resulted in some businesses transferring their employees and hub centers to other sites (Xiu 2014, p. 23; Lee 2012, p. 24; Albanesius 2012, p.1).
For instance, some business firms have relocated to speedy and open internet sites in Singapore and many other firms are considering the same move (Neve 2013, p. 112).
This has really dented Google operations in this country as most of its customers have stopped using this engine. Furthermore, companies are also overlooking this internet crisis with Google and considering alternative operations. Since Google has been really affected in China, many companies are in doubt of whether they need to be operating from China. The political issues with the Chinese government have also made it difficult for people to use a Google drive for storage of their data. This situation even makes it harder for employees to share documents, files and information (Neve 2013, p. 112). In turn, this reduces profitability for Google because its usage in China continues to decline steadily. The lesser people access Google sites, the lesser the profit margins and revenue generation.
3.0 Critical Evaluation: Analysis of secondary data in relation to the issue or problem of Google challenges in the Chinese market.
The problem faced by Google in the Chinese market can be supported and critically evaluated through the analysis of secondary data. Research indicates that the internet based search engine Google faced business challenges in China due to political and licensing issues (Lee 2010, p. 7). First of all, Google complained that the Chinese officials made it difficult for them to provide services to the rest of the population in this country. Secondly, there was sufficient evidence of hacking into the Google mail service accounts of individuals (Peter 2014, p. 119). This forced Google to withdraw its information searches in China so as to solve this conflict. The control over the internet has been gradually tightened in China since the reign of the incumbent president (Marks 2010, p. 15).
Consequently, this has had a negative effect on foreign business that describes the current environment as hostile. On the side of Google together with its products and services, they have been largely affected by the large Great Wall of China or the Great Firewall. Google largely depends on customers who operate in the Information Technology sector who may be operating foreign companies (Rutkin 2014, p. 22). The situation has been going on for many years and it seems to be spiraling instead of getting better. This is because the Chinese government has only been tightening its restrictions on Google and any private networks it may be having. Moreover, the crisis has also led to the circumvention of this Firewall and the complete blockage of Google email services. This makes it difficult for Google to effectively compete with other search engines in China or elsewhere. Additionally, the required level of censorship means that China sieves through all the information that Google provides to its clients (Rutkin 2014, p. 22).
In turn, this drastically slows down the speed of the internet and it makes it hard to maintain normal operations. The situation is especially worse for Chinese based IT companies that rely on Google services for any online transactions. According to a survey conducted on the business and commerce sector, it was illustrated that all IT companies and search engines such as Google were facing untold obstacles due to the unstable access of internet related services. In addition, Google is also losing out on the number of downloads that are accessed in China (Pichai 2014, p. 2).
The advent of the internet has resulted to the introduction of android phones that are internet enabled. This simply means that the phone users can access internet on their phones and do not have to necessarily connect to a computer. However, Google has reported that most of these devices cannot be used the way that they should among the Chinese population. For instance, the users of the Samsung galaxy phones launched complaints to Google that their devices had a lot of trouble downloading certain software and applications. What’s more, Google learnt that despite these applications being powered by Google itself, they were not operating according to their protocol (Pichai 2014, p. 2). Google business challenges in the China market essay In fact, this iPhones and their virtual private networks or VPN’s were constantly changing. This meant that the users were also forced to frequently update their phones so that they can be able to access their Google mail accounts.
A survey conducted on Chinese firms showed that at least 87% of the firms were negatively affected by the tussle between Google and the Chinese authority (Zhang 2013, p. 456). This percentage was an increase from 48% of affected firms that had been surveyed in the past one year. Google stated that many of these companies had considered doing business over the internet as an extra and expensive cost for operating in Chinese soil (Ching 2014, p. 9). Google had presented a lobby meeting to discuss its woes and how its image had been affected from a business perspective. In fact, Google asserts that most of these problems made it difficult to have effective communication in any multinational company based in China (Tan and Tan 2012, p. 469). Additionally, the foreign nationals tend to be very skeptical and doubtful about moving to China where the access to Google sites is highly restricted.
The situation is especially worse for companies and people who rely on the Google mail for communication (Cronan 2014, p. 22). These concerns have been raised for a long time by Google since it places an uncertain future on its business and market for its products. The anti-monopolization laws of China have been made so strict that if any communications and internet based company does not comply with the censorship regulations, it risks its business operations being shut down entirely(Cronan 2014, p. 22). The main offices of Google that are based in Beijing have been accused for frequently shutting down Google based services. For instance, Google services have been largely inaccessible for several days during the beginning of the year. In its defense, the Chinese government reiterated that these effects were to reduce the pro-democracy demonstrations that were about to be experienced in the Tiananmen Square in Beijing (Hamilton et al 2009, p. 146).
This move also led to the Google search engines to be blocked for an unknown period of time. In addition, any products affiliated to Google such as its email services, translation, calendar and chat sessions were also affected. In the year 2012, the authorities and leaders in China blocked Google completely for a whole day. This was according to the Great Firewall official website that also operates as an independent monitoring site of internet activity. Such an immense and drastic move on Google highly cost its business operations since they were entirely shut down without prior knowledge (Eko et al 2011, p. 12). From a business perspective, such a move really cost the Google Company that makes profits in a matter of minutes. For such a multinational firm, the loss that was incurred rolled over to millions because of shutting down its services to an entire nation.
This crackdown on Google was described as the largest and severest attack to have taken place in this country (Cronan 2014, p. 22). If the Google services in China are not blocked, they are entirely encrypted so that nobody can access them. Furthermore, all other Chinese versions of Google in China are also encrypted (Eko et al 2011, p. 12). These include Google.hk that is based in the city of Hong Kong and the Google.com that is available in other cities. Of all the internet sites such as YouTube, Facebook and Twitter, Google has faced the highest disruption in recent times. Statistics and data indicate that at least 9 out of 10 people are affected in China due to the issue of censorship of the internet (Cronan 2014, p. 22).
The traffic on Google’s site has fallen to over 50%, according to the transparency report. Many internet users in China attest that Google services have suffered from a varying degree of interference since the onset of 2010 (Tan and Tan 2012, p. 469). At one time, business challenges for Google were so severe that the company was forced to shut down all of its internet searches. This mainly came about due to the accusations of censorship by the Chinese government and other intrusions by hackers who had been had been hired by the state. These actions prompted a heated fight with the government of China being forced to arrive at an amicable solution with Google (Tan and Tan 2012, p. 469). The Chinese people had also held demonstrations that included laying of wreaths at the headquarters of Google to prove how popular the company is in China. After this period, Google directed its users to the search engine that had not been censored in the city in Hong Kong. The citizens admitted that the Chinese government had denied in the past that it does not interfere with the services of Google, but the fact is that many people continue to complain that the access to Google mail is hard and at times impossible (Tan and Tan 2012, p. 469).
The combination of all these problems makes it difficult for Google to effectively operate in China or even compete with other search engines. In this case, the problem being faced by Google in China emanated from the internet censorship laws that were enforced by the Chinese government. Consequently, this forced all the internet firms such as Google to comply with these laws or face serious prosecution (Min 2014, p. 111). The government of China made it hard for Google to effectively penetrate into China and establish its business there. The numerous rules that were created meant that Google could only operate if it censored most of its information and encrypted part of it. In addition, the number of downloads was also drastically reduced such that Google could no longer earn profits from this service (Min 2014, p. 111).
The Google Company tried on countless occasions to arrive at an amicable solution with the government of China. Instead, these efforts were thwarted and in its place, Google only continued to suffer. The result of this situation was that other rival search engines such as Baidu and Soso took over China by storm. Since then, it has been overly difficult for Google to become the leading search engine company in China. For Google, there have been many setbacks that have affected the manner in which it conducts business in China (Min 2014, p. 111). There have been uncountable losses that have been incurred, especially when the Chinese government switched off Google for an entire period. In addition, censoring and encrypting its content was only bound to destroy this company.
This is because the local and international firms that rely on Google as their search engine were forced to look for an alternative. What’s more, the people who highly relied on this search engine to access information faced a difficult time. Additionally, at least 9 out of 10 people complained that they could not access Google services such as its Gmail, Calendar, and translation and even downloads. The censorship of Google in China had made the internet to become overly slow and quite unreliable (Min 2014, p. 111). All the parties that were affected by the tussle between Google and Chinese authorities felt that this situation would have been better handled without causing too much destruction. The evaluation of the current problem shows how Google was negatively affected in business (Zhang 2013, p. 459) Google business challenges in the China market essay.
The inability to penetrate into the Chinese rich economy only brought untold harm to the firm. The conclusions based on this essay show that the problem of Google and its challenges in the Chinese business market were caused by the leadership of the Chinese government. Therefore, the appropriate plan of action would be to set up a committee that would provide a long lasting solution for both parties.
4.0 Conclusions and Recommendations: State how the chosen organization could improve its operational performance based on your research
It is indisputable that the Google Corporation is one of the largest search engines that exist in the world. This company was founded in the late 1990’s so as to ensure that information is conveniently available and accessible to everyone. However, this scenario has not been experienced in China where there has been an ongoing battle between the Chinese authority and Google. The battle has been so fierce such that it has brought infinite business challenges for Google.
The internet censorship law that was introduced meant that Google could only provide limited information for its users. What’s more, Google was forced to comply with these laws so that it can remain operational in China. However, this move was unfair towards Google and a number of recommendations would be in order so as to try and improve the operational procedures. One viable recommendation is that the Chinese government should reduce its strictness on the censorship that it currently inflicts on internet companies such as Google. In as much as the government tries to protect and secure its citizens, it is causing untold misery to these companies. For instance, many companies in China have had to abandon Google as their search engine and adopt other alternatives.
Secondly, China should try and consider a different approach other than pressing down its authority on Google. For instance, the Chinese government should consider monitoring the activities of its population online. Therefore, people can have the freedom of using all the services that are provided by the Google Company. It is anticipated that these modest recommendations can be useful to the Google Company in offering its services to the populous republic of China.
Reflective Journal: To reflect upon professional, academic and employability skills using the Gibbs reflective cycle
The Gibbs reflective cycle is a structured method that enables people to systematically think about the phases of a problem they may be encountering. This cycle presents a couple of stages that enable the person to reflect on the academic and application part of a problem. The Gibbs reflective cycle begins with the descriptive phase that aims at describing why the problem happened (Pichai 2014, p. 3). The individual is encouraged not to make any hasty judgments or to draw any conclusions about the pressing issue. Instead, the person is advised according to this reflective cycle. The descriptive stage is then followed by the feeling phase where the person is supposed to reflect upon their reactions, emotions and feelings to the issue in question. This is then followed by the stage of evaluation where an individual should focus on the bad and good aspects about the experience itself. In addition, the person should also focus on making value about the previous judgment that they made (Pichai 2014, p. 3).
The phase of evaluation is followed by the analysis stage that focuses on what the person can make of the current situation. The individual should concentrate on bringing in ideas from the external environment so that they can help with the experience being faced. The individual should try and understand what is really going and whether the experiences of other people were similar or different. Finally, the Gibbs reflective cycle ends by drawing conclusions in a general and specific perspective (Neve 2013, p. 114). This enables the individuals to make their own personal action plan on how to tackle the problem differently. The Gibbs reflective cycle encourages all individuals to think in a critical and creative way about the phases of an imminent experience or activity.
This cycle understands that most people learn best from their own experience. Therefore, reflecting on that experience can enable people to know how to improve their performance better next time. This cycle has been known to help a large number of people to make utmost sense of their situations and predicaments so that they can understand where they did well and what they can improve in the future (Min 2014, p. 111). If this model is used for my own personal reflection, then there are a number of skills that can be shown to have improved.
I can confidently state that I have learnt a lot from this subject and writing this work. In addition, I also have accomplished major skills that have equipped me to become a better student. I have learnt how to conduct individual research, especially by writing assignments such as this one. At the same time, I have also learnt how to analyze problems and provide a valid recommendation. I have learnt that there some companies that are facing numerous problems in the business market and for them to survive, they have to find alternative means to stay afloat. I have also learnt how to critically read and analyze articles and sieve out the most useful information from them. However, there are still some skills that I have not completely learnt. I need to work on my ability to analyze statistical data, especially when it relates to the profitability of an organization. In overall, the reflective process has been beneficial for me since I have been able to analyze my strengths, abilities and what I have learnt in the course of learning this subject. In addition, I have also known what I need to work on and improve so that I can become a quality student Google business challenges in the China market essay.
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Additional information in the form of annual accounts, diagrams /charts /tables/ graphs and visual images
Figure 1: Pie-chart showing the distribution channels used by Google and other android companies in China. Source: Google Charts.
Figure 2: Column Graph showing the market share in terms of revenue that Google made in China in 2013. . Source: Google Charts.
Figure 3: Bar graph showing the manner in which Google search engine is used in the workforce industry in China. Source: Zeng and Greenfield (2015).
Figure 4: Line graph showing a distinct comparison in the income generated by Google in China, Japan and America. Source: Google Charts.
Figure 5: Pie-chart showing the major search engines in China in terms of percentage popularity. Source: Zeng and Greenfield (2015).
Figure 6: Cyclic representation of the various stages in the Gibbs reflective cycle. Source: Google charts. Google business challenges in the China market essay