Wednesday, February 01, 2006

Google's inability

China is a big market to the world and it seems profitable in the same way to foreigner’s investors to capitalize their expansion process in the world. On the other hand there are some difficulties and barriers face any new entry to the market according to Chinese market society in specific. Google considers as a new entry to the search engine industry in the Chinese market. Therefore, it has to well-deal with the Chinese market to survive in the industry of search engine and avoid what happened to Yahoo, Lycos, Netscape and some other companies. As discussed in the Porter five forces that rivalry among existing firms within the industry is the main concern to the new entry. Thus, Chinese firms (Sohu, Sina, and Netease) know how to play the game of competitions in order to dismiss any new entry. They provide a competitive advantage in order to keep customers in their pocket. For example, they offer free email, news and community, wireless/SMS/MMS content and now, online gaming. So it is quite hard to Google to provide a new competitive advantage in order to compete with these firms in the short-run and sustain in the long run. As a result, I think, Google should forget about Chinese market to avoid loses in their capital and reputation in the future.

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