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BAIDU I. DISCUSSION QUESTIONS, CASE INTRODUCTION AND KEY POINTS Introduction Baidu is the dominant search engine and online advertising service provider in China. To date, they have succeeded where Microsoft, Yahoo! and everyone have failed: They are beating Google at their own game. Will Baidu be able to maintain their market share lead over Google and the other search engine and online advertising players? What will/should Baidu do to maintain their competitive advantage? The case introduces the search engine business model and outlines various measures of search engine and online advertising market share in China, as well as globally and in the U.S. There is discussion of the political hurdles that companies face in doing business in China. There is also exhaustive information regarding the growth and financial position of both Baidu and Google. Summary of key learning points and strategic issues 1. Measuring the financial health and expected growth of a firm. 2. Identifying where the firm differentiates itself within the value-chain. 3. Understanding the political/legal/governmental issues that may affect the growth/progress of a firm. 4. Awareness of what’s happening and what may happen in the broader economy and how that may affect the success of the firm. 5. What factors to evaluate in considering expansion and entrance into new markets. 6. Macro issues and trends to consider when evaluating high-tech firms. Discussion Questions 1. Perform a STEEP analysis to understand the general environment facing Baidu. How will the firm be affected by external factors? 2. Use Porter’s Five Forces Model to analyze the search engine / online advertising industry in the China. Given this analysis, is the industry attractive or unattractive? 3. Who are Baidu’s main competitors? How do they measure up against these competitors? 4. What are Baidu’s main capabilities? Do they have a core competence? 5. Create a SWOT analysis to understand Baidu’s strengths and weaknesses. Does Baidu have a sustainable competitive advantage? Is so, what is the source? What about Baidu’s evolution and current business strategy may pose problems going forward? 6. What is Baidu’s business-level strategy? Is the strategy appropriate to offset the forces in the industry? Do you recommend any changes and/or foresee any challenges? B A I D U  | 1
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BAIDU II. EXTERNAL ENVIRONMENT ANALYSIS Summarize the external environment, including conditions in the general, industry, and competitor environments. a. The General Environment Definition: The general environment is focused on the future and can be analyzed by considering the STEEP framework: Social/demographic, Technological, Economic, Environmental/geographic and Political/legal/governmental factors at play. 1.
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This note was uploaded on 03/22/2011 for the course ACCT 3391 taught by Professor Turpin during the Spring '10 term at Troy.

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