Business Model and Core Competence Refinement: Google’s Case Study

Abstract

Negotiations on the Internet have increased dramatically. Therefore, new strategies and competitive business models are crucial factors to consolidate a firm"s leadership position. In essence, a company that offers its services to a broader number of users and complementary companies will have its strategic position strengthened. Google has focused on achieving a leadership position offering two distinct services: the search engine and the advertisement service on the Web. Those services are the base on which the company"s core competence was built, i.e. its capacity to store up-to-date information about the search intentions of online users and to offer those users results that satisfy them. This paper demonstrates that Google"s competence is reinforced while those services are being used. As a consequence, new users will be attracted by the services offered by the company, which in turn will feed its database, creating the so-called network effect. This paper explains those relations.