Kelsey Dobbins
Case Study 3 1. Google’s business model can be broken down into eight parts. Within this question, I will go over what each part is and explain how it fits into the business model. Part 1 is Google’s “key partners”. This can include supplier, distributors, original equipment manufactures, as well as the Open Handset Alliance. Part 2 is “key resources”. A lot of time at Google is spent maintaining and improving the IT infrastructures and products and services. This is also where they build new products and update the existing ones. Part 3 is “value proposition”. Google strives to make and create value for their customers so that they keep using them in the future. How they do this is they offer products that they know the customer will find beneficial. This includes products such as Google+, targeted ads based on their search history, and Google Chrome. Part 4 is “channels”. These channels provide global support teams and sales and well as a multi product sales force. Part 5 is the “customer relationship”. Some examples are providing automation and having dedicated sales to large customers. Part 6 is “customer segments”. Customer segments can be divided into three additional parts: users, advertisers, and Google Network Members. Part 7 is “cost structure”. Primary costs for Google include, marketing, R&D cost, IT infrastructure, and people. The last part is the most recent addition to Google’s business model. That part is “revenue streams”. Google get 96% of all of its revenue from advertising. 2. Based on the ratios that I calculated, I have determined that Google’s performance has been quite exceptional. I calculated all things on a 2 year basis, 2010 and 2011. The first thing I calculated was the profitability. Profitability measures the efficiency in which the company turns business into profits. For 2010, the net margin of