Google and Microsofts Innovation Strategies for Wireless Products - Essay Example

Strategic Management Name Institution Professor Course Date Strategic Management Introduction Strategic change is a major necessity for companies that want to survive in the competitive business world. The increased international competition as well as technological change is some of the reasons that companies introduce new corporate strategies for selling their products. One way that companies engage in strategic change is through acquisitions and collaborations (Markides, 2002 pp.354). By forming alliances, the partners are able to improve their products and learn from one another. In the process of learning from one another, the strategic partners are able to exchange technological capabilities and skills for the benefit of the two organizations. Google, Microsoft, Nokia, Sony and other companies offering mobile devices and applications have used various strategies to remain relevant in the market and to gain competitive advantage. Some of these strategies include company acquisitions, collaboration, and product innovation among others. Google and Microsoft’s Innovation Strategies for Wireless Products Google Company has diversified its products to include mobile wireless devices with an objective of getting more revenue and gaining huge market share in mobile products industry. The mobile phone products include Nexus One and Droid that contains the Android operating system. For a customer to make a decision of buying mobile devices from Google, a lot of information needs to be availed to the customer (Burt, 2002 pp. 225). The customer must be aware of the unique features that are found in the Google mobile products as compared to what competitors in the market have to offer. A new product known as Android was developed and launched in October 2008. Android is a smart -phone. It is quite a popular product compared to some existing products such as Motorola Droid and the Nexus One. Android is a new product compared to the existing product in the market and features advanced technology. The innovation in technology accords a customer an opportunity to learn new user friendly applications. Google has used the strategy of acquisition and collaboration as an attempt to gain competitive advantage in the market (Barney, 1997 pp.96).One of the major acquisition be Google was the purchase of DocVerse company that was founded by some two former employees of Microsoft Company. DocVerse is able to combine Google applications such as Google Docs and Zoho with Microsoft office. It also allows the sharing and editing of Microsoft Word, PowerPoint and Excel applications. Google is one of the companies in the world that is strategically placed to disrupt the world of productivity software. The management team of the Google Company is also aiming to combine the DocVerse with other Google applications in order to create a connection between Google Apps and Microsoft Office.Google and Microsoft have been trying hard to outshine one another in the market. Microsoft acknowledged that the idea of Google buying DocVerse was an indication that customers were willing to collaborate with Microsoft office documents (Barney, 1997 pp. 47). Many businesses in the world have adopted the system of using the Microsoft collaboration service as a way of improving operations. Google’s acquisition of DocVerse is the tenth in the last one year. It had previously acquired a photo editing site known as Picnik. It also bought iPhone e-mail application and On2Technologies. In 2009, Google acquired an ad company Teracent, CAPTCHA Test Company and a mobile advertising firm AdMob (Tonkin & Cutroni, 2010 pp 26). According to the CEO of Google, Eric Schmidt, the company has plans to be purchasing at least one company per month but at the current trend it might be acquiring more than one company per month. Google Company has been working effortlessly to transform its search engine to an effective internet media provider. This has been achieved through the release of Google Chrome, Android, among other mobile applications (Shavinina, 2003 pp 175). The introduction of these products in the market has placed Google as a frontrunner in the internet and media market. Android smart–phone is complimenting some of the Google media products and its reception in the market has been overwhelming. It cannot be said that Google has reached the climax of product innovation but the entry into the internet media has transformed it into a relatively new company in the eyes of the consumers. The company can therefore be considered to be in the growth stage of its product life cycle. The Google Company has always had competitors but its entry into the mobile and media market has increased it competition in the market (Girard, 2009 pp.83). As much as the Google products are gaining popularity in the market, they have not been able to push the competitors out of the market. In fact it has made some of the competitors to come up with strategies of working together in order to outdoor Google in the market. Such collaboration is seen in the merger of Microsoft and Yahoo. The latest strategy for Google has been the talk of introducing an operating system in the market, Google ChromeOS (Stross, 2008 pp.114). This is a powerful indication that Google is at the growth stage as it attempts to make a switch from search to internet media. Since it is an innovative company in nature, it is quite difficult to tell when it will reach the maturity stage. An attempt to get into the internet media market is a risky move but Google has employed an intelligent strategy of keenly observing its competitors. Its internet media products are more innovative and debugged versions of what the competitors provide in the market. The strategy that Google uses is that of observing the products being offered by the competitors and then improving on any flaws that they might be having (Girard, 2009 pp.79). The products that Google creates are in most cases more attractive than the products offered by the competitors. This could be the reason why Google is always the last in introducing products in the market. Google’s strategy on pricing and commoditizing email has been a success and is making many competitors to find it tough to compete with Google. Microsoft has also upped its game in pushing for cloud based exchange service but Google is likely to win the market share due to the expected success of Android in the market. However, Google is facing a challenge in the Google Apps strategy. Social sites such as facebook and twitter have reduced the role of email in business enterprises (Girard, 2009 pp.73). Many businesses are embracing the services of social sites as a way of transforming the business environment for the better. The use of social strategy is not well executed at Google and this is likely to hurt their business applications badly. IBM, which is a major competitor for Google, is really prepared to role out its social business vision which will pose as a threat to the Google’s enterprise strategy. If IBM executes its strategy properly or collaborates with any new player in the market, it is likely to beat Google in the social strategy. The competitive advantage enjoyed by Google is that consumers have developed confidence in its products since they are of higher quality. It should also be noted that Google uses family branding strategy in most of its products with an exception of Android and YouTube that are marketed as individual brands (Eisenhardt & Tabrizi, 1995 pp. 323). Family branding strategy has been effective because customers are able to recognize and associate with any product manufactured in the line of Google. Given the past success of the Google Company, it is apparent that it is likely to succeed in the internet and the mobile market. Since the Gmail became a popular product with consumers Google has been at the forefront in establishing other Google Apps into the market (Tonkin & Cutroni, 2010 pp. 83). The main attraction of the Google Apps Email over other systems in the market is its affordable price and cost of installation. Other players in the market such as Microsoft and IBM have a cloud strategy but the Google’s pricing for its Apps still makes it more attractive to consumers. The integration of Google Apps with other products and services makes Gmail to be quite attractive to the users. Microsoft has been very successful in the innovation of new products to the market. It used product expansion strategy in order to remain relevant and competitive in the market of software manufacture (Hilderbrand, 2007 pp. 62). It has expanded its business from operating systems into software applications. In 1993 the company was ready to venture into the internet market by developing Internet Explorer Web Browser. A web portal referred to as Microsoft Network was also developed to compete with other companies such as Yahoo and Google. MSN was not very successful and had to be reinvented as MSN.com. As part of product expansion, Microsoft ventured into media development in the late 1990s. It collaborated with NBC to come up with cable station MSNBC which broadcasted news and talk show programs. In 1997, the company acquired UltimateTV and introduced a video game Xbox to compete with similar products from Nintendo and Sony. The Microsoft’s mobile software has not been doing very well for the last seven years with a market share of 12%. Of late Microsoft has developed software that allows phones to have Microsoft office tools. So far this is the only software that incorporates windows elements in mobile phones (Hilderbrand, 2007 pp. 56). Other mobile phone software produced by Microsoft includes Windows Live for Windows Phone which allows users to have instant messaging. The Microsoft My Phone synchronizes the information between a mobile phone and the web, allowing the user to even manage the information in the web. With increased competition from other mobile software manufactures such as Nokia, Apple, and Google Microsoft is likely to invest heavily in its mobile software. Sony and Nokia’s Product Innovation Strategies One way that the firms offering mobile products and application can survive in the competitive environment of high-tech products is by collaborating with other firm in manufacturing and developing new products. By doing so the risk of doing business is spread between two or more companies. One essential element of the innovation process is the sharing of ideas among the rivalry business companies (Shavinina, 2003 pp. 256). The success of company collaboration is determined by the strength of the relationship between the two or more firms that want to collaborate to boost their market share. The partners can therefore have weak or strong ties depending on the level of commitment. When companies only collaborate in one project, the partnership can be described to be weak as the commitment is assumed to be low. Companies in a collaboration agreement may decide to exploit the existing capabilities of the new products. Exploitation strategy is used with an aim of broadening the knowledge of the established products and technologies (Sadowski, 2003 pp.36). Collaborations of companies with similar technological field result in strong ties/ where long-term relationships can be maintained. The firma in this type of strategic relationship produce products that are related. Nokia is one of the leading companies in the sale of mobile devices and applications. Despite being a European company it has been able to compete effectively with other brands from USA and Asia. To strongly establish itself in the mobile industry, Nokia engaged in many strategic alliances in form of innovation networks (Khanna & Gulati, 2005 pp.196). In 1998 Nokia had strategic alliances with other mobile firms such as Motorola, IBM, Geoworks, Matsushita, Ericsson, Siemens, Toshiba, and Ipsilon among others. Most of the alliances during this period were based on telecommunications and software development. By the year 2002 Nokia had formed more alliances that were more related to software development and product innovation. Nokia implemented a strategy change by formation of mergers and acquisitions with firms offering related business activities. The strategic alliances and acquisitions were meant to improve the overall performance of the company. Nokia is currently shifting from the Merger and Acquisitions strategies to formation of alliances as a way of refocusing to its business activities. The decision on the development and manufacture of new products in Nokia depends on whether it can be able to produce the targeted volumes on its own (Duysters & De Man, 2003 pp. 230). If the company cannot achieve the target within the stipulated time then collaboration or outsourcing is done with a company that can produce the targeted volumes within the set duration. According to the management of Nokia, core products in mobile telephony will be produced internally without collaboration. This is in like with its objective of maintaining high quality in its products. The largest volumes of Nokia products are in countries such as Finland, USA, and Germany (Granovetter, 2006 pp. 1363). Nokia’s improved production in these countries could be attributed to the presence of enough skilled labour that is required in the production process. Other countries that produce Nokia phones in large volumes include Hungary, Brazil, and Korea. Products that are outside the core elements of the company are outsourced. These include integrated circuits and after-sales services (Christen, 2006 pp.116). Generic strategy decisions for determining whether new products are core are evaluated regularly. Nokia has been reinventing itself to fit the market demand. If for instance a new technology in mobile phones is discovered by another company, then the Nokia Company is always willing to collaborate with such company in order to acquire the new technology. If new products are being introduced to markets that are also new to rival companies, then the strategy of mergers and acquisitions may not be applicable. In such instance the strategy of collaboration may be used. Nokia used this collaboration to enter the market in China, Brazil, and Australia (Duysters & Hagedoom, 2001 pp. 96). The collaboration meant that local companies in these countries sold products in the name of Nokia. This strategy is referred to as exploration of new opportunities. Collaboration may imply joining forces with other mobile companies such as Sony, Siemens, and Motorola. Companies in collaboration may agree on some common applications such as SyncML which is a universal synchronization of data across many networks (Dittrich, 2004 pp. 113).The SyncML initiative was started by Nokia in 2000 and supported by hundreds of wireless companies including Sony and Motorola. Other common application includes the interoperability of multimedia messaging services. Conclusion In conclusion at times Nokia forms Research and Development alliances with its competitors especially when exploring new markets. For the development of new products, Nokia uses the open innovation strategy (Chesbrough, 2003 pp. 69). Through this strategy Nokia has expanded its services to include internet via Ovi internet portal. The Ovi Nokia offers music, videos and sharing of photos among its users. In the segment of smartphones, Nokia has diversified its services to include the Nokia’s Symbian operating system which has a market share of 60% worldwide. In the spirit of open innovation strategy Nokia has plans to invite external hardware developers and suppliers for its Ovi portal. References Afuah, A. (2000). How much do your competitors’ capabilities matter in the face of technological change? Strategic Management Journal, Special Issue, 21, 387-404. Barney, J. (1997). Gaining and Sustaining Competitive Advantage. Reading: Addison-Wesley. Burt, S. (2002). 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