11/04/13
Google case analysis
Chinese for Google
Google faced many problems entering the Chinese market and when we look at the facts many of the problems stemmed from the same issues Pfizer faced when they tried to enter China. Google’s rise to global status made the founders and executive board believe they had made it and the major obstacles were behind them. Through Google’s actions when entering the Chinese market it is obvious not much thought or preparation went into the move prior. In this analysis I will highlight tactical errors Google made while trying to establish market dominance in China.

Everyone knows that the Chinese Communist Party makes the rules in China and you have two options, either play ball or get out. As we have seen in the Pfizer case the Chinese government has a habit of making things difficult for international firms. For a foreign company, China’s rules and regulations can be hard to navigate and interpret. Their rules are more or less a set of unspoken laws at which the concept of “guanxi” is at the center of. In order to have success in China you must have connections on the ground and the governments support.

Google had gained significant market share by offering their services to people who required unbiased information from all over the world. It offered a portal into the complex word wide web and helped make sense of it all to the average user. Freedom of information is very important to the western world and is the basis of society here in the U.S. The assumption Google made is values the same ideals that Americans do and want services aimed at the needs of Americans. Unfortunately this plan was not going to get them the market share they desired in China.

Google refused to play by the rules initially by trying to circumnavigate the “great firewall of China” with search results. This made the search engine impractical for the average Chinese user who mainly was on the internet for entertainment purposes. Had Google done any market research they would have found out this information and may have been able to allocate their resources more effectively. Even when they were able receive the approval of the government they were still stuck with an increasingly irrelevant service.

Pfizer fought a battle with the Chinese government and lost it’s hold in the market to local competition. Google saw the same thing happen as they got more and more tangled up in red tape. Baidu was able to provide Chinese users with things Google lacked. The Chinese wanted a service that would allow them to game, chat and watch movies rather then unbiased news sources and outlets for government criticism. Their approach was tailored to the Chinese market and they gained support of the Chinese government by working closely with them from the beginning.

As testament to Google’s unpreparedness, they did not prepare a Chinese name prior to market entry. Chinese people not only