7S FRAMEWORK OF GOOGLE

SM-II PROJECT

Submitted by: Group 5 (Section F)

Anant Sopan Shilarkar – PGP34305

Spoorthy N – PGP34404

Malvika Singh – PGP34403

Surbhi Singh – PGP34391

Tanvi Goel – PGP34392

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Table of Contents

Background .............................................................................................................................. 3

Competitive context of company .............................................................................................. 4

Mikensy’s 7S model .................................................................................................................. 7

Analysis of Google using 7S framework ..................................................................................... 8

Evaluation and Conclusion ..................................................................................................... 12

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 BACKGROUND

When millions of people were introduced to the internet, they wanted help in understanding the
web page and how to find the information that they were searching for. This was the time when web
indexes and search engines came into existence. Google was founded in 1998 as a search engine. It had
to face competition in terms of algorithms retrieving information and tools for indexing the web pages
which was used by its competitors like Yahoo, Lycos, and others.

Following their motto of new innovations, it introduced the technically superior process of
indexing the webpages and ranking of the relevance of the pages depending on the quality and number
of pages it has been linked to.

Google grew in itself as a brand and was restructured into Alphabet with other businesses under
its umbrella. Other businesses include GV, Nest, Access, Verily etc.

Growth of Google advertising revenue

Google has been through several structural changes as it completely restructured into Alphabet
along with that it diversified itself into various brands. Google has been able to maintain its top position
in the industry by implementing the winning strategies. Google is a preferred employer for many skillful
workforces hence they have focused on staff and skills. It has developed into a large organization where
we can find robust organizational mechanisms that are instrumental in its success. We want to find out
the synergy between these organizational mechanisms by using the 7S model. To have a deeper
understanding of the 7S model through various examples from the journey of google.

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 COMPETITIVE CONTEXT OF COMPANY
Unlike other firms, google has a diversified portfolio competing in various industries. Google has
its presence in industries such as internet Cloud computing, Computer software, Computer hardware,
Artificial intelligence, Advertising, Analytics. Google is a leading firm in most of these industries. Let us
take an example of advertisement, google has exponential growth in the revenue from advertisement
since the last decade. This is due to the fact that Google has a huge database of users which it obtains by
providing a free search engine. We can access the attractiveness have of the industry google competing
in by using Porter's five forces analysis.

Bargaining power of suppliers

The bargaining power of suppliers is low. The presence of strong competition & an increased number
of suppliers ensure the low power. However, Google have many alternatives because of its strong market
dominance. Until a more dominant search engine enters the market this will not change.

Bargaining power of buyers

The negotiation power of the customer is low. Google’s international reach and distinctive attributes
offers a better return on investment than other alternatives and suppliers of online advertising. With
Google’s high international reach, consumer rarely have any bargaining power. Although advertisers could
approach other search engine websites to position ads, but google being a market leader this will hardly
benefit them. A website like google is engaging and provides consumers a much bigger platform to
showcase their products and services.

Competitive rivalry in the existing firm

The rivalry is low. Alternative search engines such as Yahoo and Microsoft MSN are progressively
working to catch up with google. It’s possible that these companies may reach this position through
dedicated commitment and innovation. This can guide them towards higher value competition. Until then,
there’s no presence of a price war within the industry because of the differentiated product and also the
business growing at a high rate.

The threat of new market entrants

The threat of recent market entrants is low to medium. Google generates most of its revenue
from non-traditional advertising using its search engine. So, the threat of new market entrants exists as
this field has been gaining interest across the market. Google enjoys huge customer loyalty due to its
services and marketing of those services. This makes it very difficult for new entrants to attract the

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customers. Switching costs are often hardware related which are characterized by high accuracy
standards and would require high system efficiency levels for new entrants.

The threat of substitutes

The threat of substitution is low. Magazines, billboards, flyers, and signage are a number of the
substitutes. The threat from these substitutes depends on the usage rate and volume, speed, and
accuracy. The connectedness and attraction/ engagement level of those substitutes additionally increase
this threat. Since Ad revenues are associated with usage, even a small loss of Google’s users on its search
engine will accumulate into losing out huge revenues. Today’s new technology, such as web analytics
allows consumers to grasp that the search engine has the best usage, through ads. Presently Google aces
the list and looks to remain at the highest supported bounce rate statistics, daily page views per visitant,
and a daily time read of 18.4 that has been increasing regularly.

The industry is very attractive and very dynamic. Google is able to maintain its position in the
industry due to innovations in the products and strategic decisions to diversify into businesses that are
aligned to its vision.

Google’s strategy is to focus on innovation and offer free services to the public and in return use
their data and online presence to serve businesses that want to advertise. Google’s originality resonates
well with the scope of its enormous projects and posts live many other companies’ missions. Innovation
coupled with diversification is the bedrock of Google’s strategy. The huge number of users that access
Google on a daily basis provides it a competitive advantage which it leverages by positioning itself as a
one-stop solution provider. The mission statement's broadness offers a lot of flexibility in how Google
organizes information. It also has a sense of completeness for not only aspiring to organize information
but also to avail it as accessible and useful.

Amid the successful stint of google, it may face various challenges in the near future. We identified
some of them and have listed them down.

Data security

With a focus on providing ease of making online transactions, customers have been providing
their personal details to websites. Most of the websites collect personal information from the customers
while they register on their site to avail their services. The recent data breach at Google which led to the
exposure of private information of 5,00,000+ Google plus users. A lot of third-party developers were able

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to leverage the bug to access the private information of these customers. And as most of the google
products are interconnected this posed a huge threat to the plethora of applications or services that
Google provides to its customers. This led to Google eventually shutting down the operations of Google+,
the only social media platform which Google-owned. Such incidents also impact customer loyalty and the
trust of the customers towards the products.

Vertical search

The digital world today can be classified into two main segments namely desktop/PC and
mobile/tablets. As of 2018, Google's market share in the search engine segment was approximately 93%.
In other words, Google Search Engine is a market leader in the PC and laptop segment. But the mobile
world is somewhat different than that of the computer world. Today people, while surfing on mobile
phones or tablets, go to dedicated apps for a particular search. For example, if someone wants to find a
hotel than he/she would use apps like Trivago, Airbnb or Booking.com to search for hotels instead of
searching hotels on Google Search Engine. Similarly, if one wants to buy some product/item, he/she would
go to apps such as Amazon, Walmart or eBay. This means that the central front door for the mobile web
is absent unlike the case of the desktop web. With Android and other Google products such as YouTube,
Maps, Gmail, etc, Google still captures a significant mobile market but it does not control the discovery
experience.

Slow growth

Google’s growth almost stagnated after the year 2017 in the search engine segment. This is just
the law of big numbers, but it can’t be ignored. Google Search Engine captures almost 93% of the Market
share and it is very difficult for any company to grow further if it has such a big share of the market. In
BCG Matrix, Google Search Engine is the cash cow for Alphabet with very high market share and low
market growth. Although Google Search Engine growth is not significant as compared to other US giants
such as Amazon and Walmart, Google is still growing at a decent pace. One of the reasons for Google’s
slow growth is the shift of web traffic from desktop to mobile. With the increase in mobile users to access
the internet around the globe, the popularity of Google as a search engine has gone down. People prefer
to go specific apps for their searches rather than searching it on Google Search Engine. As of 2019, the
share of mobile users and desktop users is the same (48%) for accessing the internet.

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 MCKINSEY’S 7S MODEL
In 1980s, McKinsey consultants Tom Peters, Robert Waterman and Julien Philips with help from
Richard Pascale and Anthony G. Athos developed the McKinsey’s 7s model. The model tries to explain
how all seven of Structure, Strategy, Skills, Staff, Style, Systems, and Shared values when aligned together
can help improve the effectiveness of the company. It tries to explain the interconnection between these
seven areas and how any change in one area will require change in all the others for its effective working.

The model divides these seven areas into two segments Hard Ss and Soft Ss. Below mentioned is
the model:

This model can help organisations in various phases, some of the commonly used ones are
facilitating and understanding changes in future, and mergers and in implementation of a new strategy.

7s factors of the model

In the McKinsey model, the seven areas of the organization are divided into the ‘soft’ and ‘hard’
areas.

Hard elements include strategy, structure and systems are considered easier to manage. Soft
areas are harder to manage but they are required as the foundation of the organization.

Hard S - Strategy, Style, Structure

Soft S - Staff, Systems, Skills, Shared Values

• Strategy- to attain competitive advantage and compete in the market

• Structure- Organization of different divisions and units within the organization and information
regarding the accountability of these.
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• Systems- the processes and procedures of the company explaining how the business is done

• Skills- are the abilities that firm’s employees perform very well. They also include capabilities and
competences

• Staff- type and number of employees needed and how their recruitment, training, motivation and
reward procedure is done

• Style- the management style of leaders of the company

• Shared Values- Core of Mckinsey’s 7s. The norms and standards guiding the organization

Analysis of Google using 7s framework

Hard Elements
1. Strategy:

The core business strategy is based on the diversification of the business and consistency of the
introduction of new products and services. Along with this it also tries to develop an eco-system which
can persuade customers to experiment with more range of products and services available.

Browsers like Chrome, etc., YouTube videos, Gmail services are the usual entry pathways for the
customers. Soon there is a promotion in their usage and they add on to drive, play, calender. Bloggers,
etc. Acquisitions too are used as a BS widely, taking the example of the parent company of Google which
acquired 200 companies in 2015 and greater than 30 in 2016.

2. Systems

Majorly the systems used within Google are

• Employee recruitment and selection system

• Team development and orientation system

• Transaction processing system

• Customer relationship management system

• Business intelligence system

• Knowledge management system

Additionally, the ranking of webpages according to search queries conducted by Google algorithm
is a critically important system for the business.

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 3. Structure:

The current organizational structure of Google can be explained by the following image which
gives a detailed chart of the structure of Google.

Google has a cross-functional

organization structure. It promotes a team approach
where all the employees have a say in making the
decisions. The feel tried to be maintained is that of a
small company to promote a start-up culture to
enhance the feeling of association with the company.
This is done to enhance the involvement of employees
in the functioning of google.

Also, in 2015, Larry Page announced a major

change in the organizational structure where a new
conglomerate was formed with the name of Alphabet.
The different Google search engines and businesses
including YouTube etc. will act per unit. In 2017, the
structure again shifted to limited liability corporation.

Soft Elements
1. Shared Values

All the employees including the board members are required to follow the Code of Conduct. In
case they fail to follow, strict actions are taken against them including termination. Ethics & Compliance
helpline or with a government agency is the go-to agencies for any queries/ dissatisfaction.

Highlight- There will be no retaliation against any complainant

The COC of Google contains major goals to be achieved and the principles to be followed to attain
them:

 Serve Our Users: To set a higher standard in treating the users following principles are supposed
to be followed; Integrity, Usefulness, Privacy, Security, and Freedom of Expression,
Responsiveness and immediate actions.

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  Support Each Other: To bring out the best potential of the employees, Google tries to provide the
most supportive environment which includes; Equal Opportunity Employment, Harassment,
Discrimination, and Bullying, etc.

 Avoid Conflicts of Interest: Areas covered are: Personal investments, Outside employment,
advisory roles, board seats, and starting your own business, Business opportunities found through
work, Inventions, Friends and relatives; co-worker relationships, Accepting gifts, entertainment,
and other business courtesies, Use of Google products and services

 Preserve Confidentiality: Apart from preserving the confidential Google material, proper disposal
of Confidential Google material, safeguarding information received from others under NDAs; also
keeping trade secrets.

 Protect Google’s Assets: Google tries to save the company resources and protect company assets
by conserving the following: Intellectual property, Company equipment, The Network, give
physical security, preservation of employee’s data.

2. Skills

Google has been rated as top employer consistently, and its culture helps in retaining, creating
and attracting top talent. By motivating and designing teams that are strong it optimizes its talent- it is an
ability which is essentially important for success. The culture of each team is unique despite having
commonalities across extreme teams. It has successfully created a culture which supports teams.
Whoever is hired in Google is highly qualified, Google is well known for thorough and tough screening.
And since candidates are screened well before joining they usually face no problem in fitting the culture.
The success of Google is both due to hard and soft elements. After its own study of teams, Google realized
that psychological safety is very important. Psychological safety is defined as risk-taking ability without
being scared embarrassed and insecure, it’s a major factor in how some teams outperform the others. A
culture of Information sharing and questions asking is the kind of culture Google encourages. And it firmly
believes that in order to duplicate its success it is important to create a team environment that elicits and
invites contribution from all its members.

3. Staff

According to Laszlo Bock, SVP of People Operations at Google: with the growth of a company
eventually and commonly there’s a regression of the mean and hence companies, in the long run, end up
selecting people who are average. With time hiring decisions to move towards hiring managers and away
from the founders and due to the high pressure of hiring fast the hiring managers end up hiring relatives

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or college roommates. And then it sets a chain reaction wherein when someone notices an average
performance from a colleague it is received as if it's okay to compromise and hence the employees stop
working hard and the ones who did leave the company. Google follows 3 key rules for hiring top talent:

For quality, the bar is set high and with zero compromises.

Objectively assessing candidates with interviews that are structured and well established and
thought-out criteria like:

• General Cognitive Ability

• Leadership

• Googleyness

• Knowledge related to the role.

• And provide candidates with a compelling reason to join.

4. Style

The founders of Google with their academic ancestry and inclination towards thinking
independently and some research may have contributed to curating their leadership style. Especially
when it comes to empowering the employees, encouraging and motivating them to think and come up
with innovative ideas and finally implement them. They give enough freedom to the employees to work
creatively and have the policy to hire only class-A best employees. With the leadership which empowers
they have a ‘Darwinian environment’ of survival of fittest where the ideas compete and are judged basis
on how good they are and on the merit. Hence it is not decided by the founder nor the grandeur of the
sponsor and its title which new strategy or the product is to be chosen. Google also has a suggestive 70-
20-10 model for employees for time allocation: In which the maximum 70 percent share of the time is to
be reserved for advertising and searching which are Google’s core business, 20 per cent timeshare could
be given to the projects which are off-budget and somehow related to the business core and rest of the
10 per cent time could be spent on flourishing the competencies and pursuing one’s own ideas and
interests.

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 Evaluation & Conclusion
Google’s core business strategy is based on the diversification of the business and consistency of
introduction of new products and services. Along with this, it also tries to develop an eco-system which
can persuade customers to experiment with more range of products and services available

It has a cross-functional organization structure which promotes a team approach such that all the
employees have a say in the decision-making process. The culture is basically kept close to that of a start
up in order to enhance the feeling of association with the company. This is done to enhance the
involvement of employees in the functioning of Google.

All the employees, including the board members are required to follow the Code of Conduct
which, if they fail to follow, has dire consequences, including termination.

Google’s Code of Conduct highlights the following principles:

 Serve Our Users: To set a higher standard in treating the users following principles are supposed
to be followed; Integrity, Usefulness, Privacy, Security, and Freedom of Expression,
Responsiveness and immediate actions
 Support Each Other:
 Avoid Conflicts of Interest
 Preserve Confidentiality
 Protect Google’s Assets

 Ensure Financial Integrity and Responsibility and Obey the Law

Google’s culture is crafted in a manner that focuses on retaining, creating and attracting top talent.
By motivating and designing teams that are strong, it optimizes its talent- it is an ability which is essentially
important for success. The culture of each team is unique despite having commonalities across extreme
teams

3 key rules for hiring top talent are

 General Cognitive Ability

 Leadership

 Knowledge related to the role

The organisation gives enough freedom to its employees to work creatively and follows the policy to
hire only the best employees. With a leadership which empowers, they have a ‘Darwinian environment’
of survival of fittest where the ideas compete and are judged on their merit.

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 Google also has a suggestive 70-20-10 model for employees for time allocation in which the maximum
70 percent share of the time is to be reserved for advertising and searching, which are Google’s core
business, 20 per cent timeshare could be given to the projects which are off-budget and somehow related
to the business core and rest of the 10 per cent time could be spent on flourishing the competencies and
pursuing one’s own ideas and interests.

All in all, the firm is designed in a manner that gives the workforce the freedom to be creative which
helps innovation flourish in the workspace

Sources:

https://about.google

https://googleindustrystudy.weebly.com/structural-factors.html

https://bizfluent.com/about-6692920-google-s-organizational-structure.html

https://www.fastcompany.com/90230655/how-google-motivates-its-employees
https://business.linkedin.com/talent-solutions/blog/2014/10/googles-hiring-secrets-revealed
https://iveybusinessjournal.com/publication/distributed-leadership-at-google-lessons-from-the-billion-
dollar-brand/

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