BUSINESS MODEL AND CORE COMPETENCE REFINEMENT: GOOGLE’S CASE STUDY

Abstract

Negotiations on the Internet have reached a huge volume. In this sense, 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 in achieving a leadership position through two distinct services: the search engine and the advertisement service on the Web. Those services are the baseline to build that company’s core competence, or in other words, they are its capacity to hold fresh data 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 as those services are used. As a consequence, new users will be attracted to the company’s services which will feed its database, creating the so-called network effects. This paper explains those relations.