Resources: Page 109 of Managing Innovation and Entrepreneurship, Ch. 6 and the organization you selected in the Week 2 Individual Assignment (see attachment).
Write a 1,200- to 1,400-word paper using the same organization you selected in Week 2, and include the following:
Apply the five key elements of design thinking to analyze the organization’s effectiveness in design thinking and innovation.
Evaluate where the organization excels in design thinking.
Detail where the organization needs improvement.
Make specific recommendations that the organization can undertake to improve design thinking and innovation.
1 Running head: Innovation and Competitive Advantage: Changing Environments Innovation and Competitive Advantage: Changing Environments
University of Phoenix
Innovative and Creative Business Thinking
Professor Shufeng Huang
October 3, 2016 Google Inc. is a unique company, considering that they have all the three elements
needed to maintain a competitive advantage in the industry. It has appropriate economies of
scale; it enjoys customer captivity as well as cost advantages. Moreover, Google expedites
multiple manifestations of all the categories of competitive advantage. For instance, it achieves
the economies of scale by the network effects, the relative size as well as the fixed cost. Looking
at the customer captivity, Google has gained the customer loyalty of the consumers as well as the 2 Running head: Innovation and Competitive Advantage: Changing Environments
advertisers because of its switching costs habit. It equivalently secures numerous cost advantages
by having a learning culture as well as proprietary technology. (Google Apps, 2016)
The Organizational Leadership Philosophy on Innovation
Google?s leadership is based on a culture that values innovation. In fact, to them,
innovation is the most paramount organizational objective. It has an open innovation style
whereby all the employees are involved in the innovation culture. The innovation is not just a
managers? affair. At Google, the innovation is not a responsibility given to one department or a
particular group of elite cadre personalities. Instead, innovation is deemed as everyone?s
responsibility. The employees are always encouraged to be innovative and find innovative
solutions to any problems they encounter in their duties. Google stands on the culture that
innovation is not about perfection; rather it is about improvement. Both the new as well as the
improved products reach the consumers as soon as they are produced. Hence they use the user
feedback to improve on what was not right and I the progress they keep improving the quality of
Activities to Sustain Competitive Advantage within its Industry.
Google has managed to maintain a sustainable competitive edge throughout the years
because it scores highly in the production of unique products, high-value products, low
imitability as well as low probability of substitutability. Google manages to gain consumer
loyalty because they provide their users with prompt and relevant websites when they search for
information. They have since obtained the largest market share in the search industry. Their
product is a rare commodity.
Also, the technologies that base the performance advantages of Google Inc. have made it
impossible for their competitors in the industry to replicate. For example, they have crawler
programs which search and download pages to Google center automatically. Thus it allows
Google to have continuous improvement and maintain a competitive advantage over their 3 Running head: Innovation and Competitive Advantage: Changing Environments
competitors. Also, their high R&D resources also play a critical role in ensuring that Google
stays forefront in innovation as well as in maintaining the economies of scale (turbofuture.com,
Google also has indexer programs that organize all the downloaded material into their
databases .they highly technological data centres. Hence the resources they own give them an
upper hand when compared to other companies in the search industry. Also, Google has managed
to maintain a high level of customer loyalty through the years. Their quality and unique product
have gained the consumers? receptiveness such that most users would prefer Google to other
alternative search engines. Its large customer base thus attracts more revenues and reduces the
unit costs used in infrastructure, promotion, and management.
Also, the organization has a ubiquitous search engine; it gains from some network effects.
For instance, new users tend to learn from Google before they get to be aware of the
other search engines. Another factor is its rapid advertising. Their advertising is determined by
the responses of the users. Hence they keep improving the algorithms such that they have
steadily increasing click rates.
Initiatives for Long-Term Competitive Advantage
Google Inc. invests highly in research. They research and try to develop everything that
affects their consumers ranging from robots, to clean energy. They take their time to establish
what the world is using now and where it may move to in future. Their R&D initiatives are
focused on making life easier for their consumers. For instance, as at now, Google reportedly has
a secret division which they have named Google X. the division has an enclosed lab that has
robots operating. They are trying to build robots that can perform any tasks in the home and
workplace environments. For instance, a robot that would be able to make coffee or office tasks
like making photocopies.
Also, Google has done extensive research on improving transport for humans. To them, a
car is not just a means of transportation, no wonder they have developed street level data to aid 4 Running head: Innovation and Competitive Advantage: Changing Environments
in giving directions. According to New York Times Magazine, Google is currently working on
developing location-based Ads that would help businesses. They are also working on developing
clean energy. This shows how much they care for the interests of their consumers. The company
has goals and is on a research path to develop renewable energy sources. The project is focused
on developing solar-engines that would be less costly as well as environmentally friendly.
Over the years Google has managed to sustain a competitive advantage over its rivals in
the industry. The company has been well able to maintain customer loyalty through continuous
improvement of their products as well as high-quality products. They enjoy economies of scale
and have relatively decreased fixed unit costs. The uniqueness of their search results and
technologies makes it difficult for their competitors to replicate their products. Also, they have a
steady innovation culture that ensures they keep improving their products. References
Google Apps. (2016). Creating a Culture of Innovation Eight Ideas that work at Google.
Retrieved from Google Apps: https://apps.google.com/learnmore/creating_a_culture_of_innovation.html 5 Running head: Innovation and Competitive Advantage: Changing Environments
Hisrich, R. D., & Kearney, C. (2014). Managing Innovation and Entrepreneurship. SAGE
Turbofuture.com. ( 2016, April 29). What are Google's Competitive Advantages? Retrieved from