Founded in 1998 in California, Google is one of the largest IT conglomerates to have existed within the IT sphere. The company currently holds a leadership position in various internet-based industries throughout the world. These include industries such as search engine, cloud tools, operating systems, and other software and hardware. Among these the brand is most likely known for their self-titled web search engine.
In this Pestle analysis framework, we will go through the political, economic, socio-cultural, technological, legal, and environmental factors that affect Google. This will provide an in-depth analysis of the brand’s functionality and its future stakes.
Here is the Pestle Analysis of Google.
Table of Contents
Political Factors Affecting Google
International relations
The biggest political factor affecting Google as of now is the cold war between USA and China. In the current Trump presidency, the state of affairs between these two countries have become highly hostile and as a result, huge trade tariffs have been placed on imports. This adversely affects tech-based companies such as Google since they heavily rely on imports to the Chinese market for their revenue.
Partnerships
Google also has a partnership with the Chinese brand Huwaei. Such a partnership during politically volatile times is portrayed in a negative light by various entities and this also adversely affects Google’s position in the market. Since there is no immediate expectation of such political fallouts being cleared away, Google’s partnerships with any Chinese brand will be adversely affected.
Economic Factors Affecting Google
Economic growth
The United States economy is one of the best performing economies in the world with the highest GDP growth rate. This provides an immense level of opportunity to Google to expand itself into newer markets and also raise their revenue standards. Furthermore, this allows for a constant growth of purchasing power for both individuals and corporations, thereby enabling greater technology usage. Google has now the opportunity to introduce luxury type technological product to the market which would not have performed successfully prior to this decade.
Globalization
Outside the American market, the force of globalization is helping Google spread its presence to countries with developing economies. The purchasing power of consumers in these countries is steadily growing as they face economic growth and thus tech-based brands such as Google is able to find newer markets that allow it to become a leader in multiple economies. Google is also planning to launch products that are suited for the purchasing power of such economies.
Social Factors Affecting Google
Data privacy
A huge part of Google’s revenue is based on advertisements on their different platforms. But with the rising concerns of internet users about their personal data being collected to target them with ads, a preference towards ad-free browsing is on the rise. Internet browsers that provide ad-blocking facilities are being user to remove advertisements from Google platforms and this has led to lesser brands seeking to advertise on such platforms.
Rising popularity of other mediums
Google was the undisputed leader of the internet up till a point in time. But with platforms such as Facebook and Twitter gaining popularity, Google has to deal with market competition that was not present before. These platforms also integrate various features on a singular platform thereby providing a better user experience. Google being a multi-platform brand is unable to integrate all its features onto a single platform.
Technological Factors
AI and Cloud Tech
As the technological environment becomes more usable by both individuals and corporations, Google is able to integrate more features onto its platforms. The recent increment in the usage of AI has benefited the brand since its level of AI based innovations is quite high. Apart from Amazon, Google is the biggest name in the AI and Cloud integrated services market and this industry is projected to have one of the highest growth rates in recent times.
Smartphone generation
The recent tie up between Google and Android has allowed to it have a huge market push since the usage of smartphones is higher than any other gadget. While Google has been unable to penetrate this market directly through its smartphone, its partnership with Android has proven to be exceptionally profitable as it is now viewed as a part of every Android bases smartphone. The brand is also looking to launch other smart devices and capitalize on the current tech trend of such devices.
Legal Factors
GDPR
A flurry of recent laws regarding data privacy has been working against Google’s mode of operations. As stated before, the company is highly dependent on running targeted ads on its platforms for its revenue. And for this purpose, collecting private data is required. As countries across the world are beginning to implement laws that places embargos on collection of private data, Google is having a hard time running its targeted ads.
Copyright laws
Various new laws are being placed that restrict uploading of copyrighted information on Google platforms such as YouTube. This may affect the broadness of the content available on such platforms and thereby decrease traffic. This will further reduce the ability of Google to run adverts and reduce its revenue standards.
Environmental Factors
Google as an organization needs to address environment related issues that are currently plaguing the world. All corporations are expected to reduce their carbon footprint and Google being one of the IT giants is expected to lead such stances. The company has tied up with the United Nations to take certain environment friendly steps that will also incorporate the usage of technology.
The company will be providing data to governments, organizations, and the public through its satellites that will allow them to take better decisions regarding environmental concerns. Such moves are highly appreciated and can help reinvent the brand in the public eye.
Lets Conclude PESTLE Analysis of Google
The above analysis should present a clearer picture of how Google operates and what present factors affect it from different sectors. Google has always led technological revolutions and retained its status as industry leader. It is expected that it will continue to do so in the coming times while keeping in mind the highly volatile tech and political environments.
