Case Analysis Questions
Google in China
1. The issue of censorship in China is both a nonmarket issue and a market issue. Explain how the
issue fits into each category.
It is a market issue because the market describes the interaction between firms, suppliers
and consumers, it deals with markets and contracts and the base of the strategy is on
research and development of new products and services.
It is a nonmarket issue because the nonmarket environment deals with the political, social
and legal arrangements, with the interaction between firms, individuals, interest groups and
government, with the deal with majority rule, due process, broad enfranchisement,
collective actions, and access to the public. In this aspect firms must worr about the
enviorment, health, safet, regulations, deregulations, intellectual propert, human rights,
international trade polic, antitrust, non government organizations, and social activism with
2. Why is entering China so important for Google’s market strategy, even if it means compromising
on issues like censorship?
Without the Internet Content Provider licence, Google’s search presence in China will revert back to when it did not
have a localised search page. China users keen to access Google search had to turn to its offshore sites, meaning
longer search times -- and a boost for Baidu, the top local player.
Google’s current search business in China accounts for a tiny slice of its $24 billion in annual revenue, with analyst
putting its annual China revenue at $300-$400 million. But the long-term growth prospects are key.
As the world’s largest Internet market with nearly 400 million users, China has huge potential. Firms which got out of it
early, such as eBay and Yahoo Inc, haven’t been able to regain a foothold.\
China is now the No. 2 market in the world, and will be the No. 1 market within the next year or
two, for smartphones, PCs, etc. And I think it’s really important," noted MS boss Steve Ballmer