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Alphabet Resources and Capabilities

Alphabet is the parent company of Google. Its core business is online advertising. Alphabet is the leading player in this field rivalled by Facebook and Microsoft. The company has seen fast growth and increase in revenue in its short life span. Today, it is among the leading internet and IT companies of the world. The company is known best for its Google search engine and chrome browser. However, it has also brought a large range of other products including double click, Google maps, and several more. Google’s competitive advantage comes from several sources including its focus on technological innovation. Over time it has built strong brand equity in the online market.

Take a look at the various sources of Alphabet’s competitive advantage.

Brand equity:

Brand equity is a key strength for any large brand. Alphabet, the parent company of Google is among leading technology brands of the world. Over time it has built strong brand equity through its consistent focus on customer convenience and technological innovation. These are also the reasons behind its fast growth and strong financial performance. Brand equity is the consumers’ overall perception of a brand. Google is considered a technologically innovative and user friendly brand. Alphabet has built the image of a user centric and innovative company. This is an important advantage that has guided the growth of Alphabet in recent years.

Technological Innovation:-

Technological innovation is a key strength that differentiates any technology brand in this age of heavy competition. Google invests heavily each year in technological innovation. It has brought a large range of innovative and user friendly products including its search engine, browser, email and a large range of other products meant for developers and enterprises. Apart from it, the company is also known for its android OS. In the recent years, the brand released a number of other products including its Pixel smartphone. Investing in innovation helps Google differentiate its brand from the competing brands and grow its rage of products and services. In 2018, Alphabet spent 21.42 Billion dollars on research and development. This is among the highest in the entire industry.

Customer base:-

Billions of users from around the world use products by Google to make their lives easier and tasks simpler. Its search engine, browser and mail are most popular around the world. The user base of Alphabet has also grown with the acquisition of YouTube. The proliferation of internet has also aided the growth of its customer base. A large and loyal customer base is the key strength of any brand and among primary drivers of sales and revenue. Alphabet’s revenue and market capitalization have climbed fast in the recent years driven mainly by the growth in its user base. In 2018, its total revenues have grown to $136.8 Billions.

Global presence:-

Alphabet’s global presence is also a key strength and a major source of competitive advantage for the brand. The company’s fast growth has been made possible by increasing internet usage throughout the world and the higher accessibility driven by the growth in the use of smart devices. Many of the online products and services by Google can be accessed by individuals from around the world free of cost. Chrome is the favorite browser of billions of users and Gmail has also a very large number of users around the world including individuals and enterprises.

Large product line:-

Google has brought a large product range to the market. Its core product, the search engine supports its large advertising empire. Google’s revenue from online advertising has continued to grow fast driven by growing internet usage around the world. From its search engine to browser and mail as well as several more internet based products, Google has released a large number of products that can be easily accessed by users from any part of the globe. A large product range has helped grow its demand and popularity.

HR Management:-

Google’s exceptional focus on HR management has also helped it build a distinct competitive advantage and a unique brand image. Human capital can be a source of competitive advantage and motivated employees can be assets for a company. The technology industry has grown highly competitive and that has led to growth in competition for acquiring talent. Google has focused on HR management right since its foundation and therefore remained an employer of choice for several years continuously. This is an important competitive advantage since most technology brands are competing for talented employees. Google has managed to excel in most business areas by hiring the best talent in the industry.

Alphabet (google) VRIO

Sources: Alphabet Annual Report 2018.

Written by Abhijeet Pratap

Abhijeet has been blogging on educational topics and business research since 2016. He graduated with a Hons. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers.

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