Google in China Case Study

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of cyber-attacks. However, it is seeking more information on the cyber-attack allegations at hand.

Recommendations for alternate solutions

The first option is for Google to do nothing. In this case Google should ignore the cyber-attacks and any other future ones without exiting the Chinese internet search market. It will continue to provide Google.cn to the people in China while maintaining the censorship standards that have been set by the Chinese government. The benefit here is that Google is still able to operate in China as the second largest internet search engine while trying to find other ways of growing its consumer base in order to bypass its main competitor, Baidu. However, as discussed earlier, this option very much conflicts with Google’s core principles of “do no evil” that it operates on. This most likely will result in lots of bad publicity globally because it makes the company seem hypocritical. Furthermore, Google’s image may be tarnished because critics will view the company as one that supports a country with a regime known for its oppression and minimal regard for human rights. Such backlash is never good for business.

Option two is for Google to say no to internet censorship and cyber-attacks and exit the Chinese internet search market altogether. This means Google will shut down Google.cn thereby allowing the company to operate within other markets where policies and regulations align with its core principles. On the contrary, Google risks alienating the world’s biggest internet search market with over 300 million internet users and about 700 million mobile phone subscribers. This is a market that many multinational companies from various industries view as one with great profit and growth potential. Google stands to lose a lot with this option. Exiting China could give the advantage to other mobile device manufacturers competing in China, specifically Apple. Google’s exit will not necessarily be a financial blow to the company mainly because only about 1% of its revenues come from there. Nonetheless, it still needs to have access to the Chinese market for other products in its pipeline. China may block Android devices from operating in the country altogether if Google falls into China’s disfavor upon exit. Google’s exit may also result in the upheaval of some degree of political friction between the U.S. and China which could have knock-on effects that will negatively impact both economies.

Google’s third option is to modify its behavior and business strategies. Google can start by revising its core principles to make them a better fit for both markets that allow free flow and access of information as well as those that do not. I say this because from my International Management class, the one thing that I have learned is that the ‘one-size-fits-all’ approach does not always work when multinational companies are trying to expand into foreign markets. Therefore, just because Google believes and operates within its core principles of ‘do no evil’, does not mean countries such as China with already established rules and regulations should cave to allow Google to do business in a manner that best suits the company’s core values. Google will have to learn to adapt to the cultural, political, economic and technological environments of any host country it decides to operate in. The company’s current strategy of showing a statement that information was suppressed due to government restrictions when certain information is omitted from a search result is one that I would encourage it to continue with. I strongly believe that it is for the people of China to fight for their rights, and not Google’s responsibility to take lead against communism.

The success of competitors such as Baidu clearly shows that it is possible to operate within the same frameworks defined by the Chinese government and grow your business at the same time. Google can continue working on making its products in China more consumer-oriented all while working with the government to find ways of making other Google products such as YouTube accessible to the Chinese market.

Conclusion

I conclude by recommending the third option as the best suited alternate solution for Google because it presents the most advantages will allow the company to be more versatile thus helping it continue to grow and expand. The issue of internet censorship and control is not going away. Every year brings more these limitations, not just in countries like China but also in the U.S., UK, Canada and other free countries. These limitations are often egged on by law enforcement trying to catch criminals and media companies trying to stop file sharers. As a multinational doing business in foreign emerging economies, you have to know what you are getting into, know whom you are dealing with, what their expectations are, and most importantly know what their rules are. You therefore have to either operate on a "when in Rome do as the Romans do" policy, or, if you have a clear set of global values that cannot be compromised, you have to decide which countries are off limits and understand and accept your limitations. In Google’s case, it needs to understand that there are no rules of engagement that bear upon the defense of human rights of citizens in host countries that it operates in. With that being said, it should re-center its focus on doing what is best for its shareholders and customers.

Exhibit 1.

SWOT Analysis

Strengths

Product: • Second largest internet search engine in China and globally recognized

• Strong patent portfolio

Price: • Zero cost to the average user

Promotion: • Quality and faster service

Place: • Global product

Other: • Financially robust based on revenues and other products

• Quality and customer experience are primary objectives

Weaknesses

Product: • Not tailored to individual cultures and regulations.

• Large product portfolio where some are unprofitable and do not even generate revenue

Price: •

Promotion: •

Place: •

Other: • ‘do no evil’ core principles conflicts