Essay Example on The external factors of the macro environment for Google

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The external factors of the macro environment for Google determine the opportunities and threats for its business Based on the PESTLE analysis Google can focus its efforts on the improvement in technological and economic external factors Political Factors This involves primarily the effect that governments have on the business of Google The following political factors are significant in Google s macro environment 1 Globalization certain Government encourage Google to do business in their Country eg India its 100 FDI policy Globalization increases the demand for online advertising 2 Political climate stability in the major economies or markets with larger customer base It minimizes obstacles to the firm's expansion 3 State-sponsored online companies are a threat for the independent companies like Google as they get more support from the host country political parties Eg Chinese government's control of large firms in China Economic Factors 



Th economic factors change the market opportunities available to businesses In case of Google the following economic external factors play a key role 1 Economic stability of most developed economies having a large customer base serve as major markets or an opportunity for Google 2 Rapid growth of developing economies like India China and U A E these countries provide a great opportunity, especially in terms of economies of scale as factors of production e g Employees, are available at lower salaries The economic stability of major markets and rapid growth of developing countries create new momentum that Google can exploit The company can use these opportunities for global expansion Social or Socio-cultural Factors Social or socio-cultural external factors affect the way customers respond to the products of Google and can present threats and barriers to its business 



The following are the key socio-cultural factors that are the most significant in Google s macro environment 1 Increasing use of social media threat The rise of social media usage is a threat to Google because it strengthens companies like Facebook which also offers online advertising services 2 Rising diversity of users opportunity The increasing diversity of users is an opportunity for Google to improve its services to match individual preferences Technological Factors Technological factors play a major role in the Internet Service Provider Industry firms as they help determine to change the game of the firm either as potential makers or breakers of business The following are the major technological factors impacting Google 1 Demand for Internet access in developing countries is growing at an accelerating rate This is a big opportunity as Google can exploit the customer growing demands for internet service in such countries and make higher advertising revenues Use of Artificial Intelligence AI is the need of the hour and a player with best AI can only gain a competitive edge to survive as the Industry Shaper 2 



There is a rapid adoption of mobile devices in the global market With Xiaomi and Apple as the major players in the mobile market we can see new up gradations in technology by the mobile players at a faster pace This industry is having the key of opportunity for Google by making it improve the mobile friendliness of its online products to exploit the mobile trend Google can thus gain profits from a related industry like the Mobile Industry Legal Factors Google must operate within legal limits in the various economies or the markets it is operating globally The following are the significant legal factors impacting Google's external environment 1 More regulations on online privacy Individual using Gmail chrome like privacy for their personal accounts also while navigating the net this vividly provides an opportunity for Google to build on and offer new services to its customers 2 Developing Economies are showing a rising trend towards protection of Intellectual property rights Google can develop innovative measures to discourage people from violating these regulations Ecological Environmental Factors Even though Google generates most of its revenues online the firm is impacted by ecological or environmental factors as this influences its business strategic direction 



The following are the significant ecological external factors affecting Google 1 Global via advertisements in its internet service media can spread the idea and help promote to improve the environment to its users globally 2 This can help create positive responses from its customers and sustain its brand image in the global business environment Recommendations From the above PESTLE analysis it is evident that most of the external factors in Google s macro-environment are opportunities Google must focus on exploiting these opportunities to maintain a competitive advantage over its competitors like Facebook and LinkedIn Also Google can use its advance Artificial Intelligence innovation capabilities to develop improved responsiveness of Google products to related industries such as mobile devices By effective strategy Google can gain stronger competitive edge and influence in the industry as the Shaper of the Industry



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