Google vs Baidu in China
Case Study Baidu vs Google
The goal of this case is to broaden our knowledge of new business models and that of how local companies may struggle against foreign competition. You are asked to answer the following questions: 1 / What led to Baidu's market dominance? Compare the two business models and their evolution 2 / How do you recommend Google to do in China? Compare Google position with the one of other companies in the internet-related industries. What can we learn from this comparison? 3 / How do you recommend Baidu to do in the international market?
Question 1 China witnessed the highest economic growth in the world since the adoption of its reform and openness to the outside policy. This growth has affected the Internet market in a very remarkable way, where the annual average in China’s Internet usage exceeded 39%. Many factors have led to Baidu’s dominancy in the Chinese market even over more experienced and global players as Google, Yahoo...etc
Linguistic advantage: the Chinese Language is the dominant language in China which is read and spoken by the whole population. This gives a better advantage to local start up like Baidu to efficiently design an engine that is more relevant to the country culture. Social Cultural Advantage: Baidu as A local player knows the taste and preferences of the Chinese Internet users’ way more than its Competition does, there for solutions Were designed to better fit the requirements of the locals For example, typing replaced by a click on a menu list. Introduction of customer oriented technologies based on the Chinese internet habits ( for example Baidu MP3 music, Post bar, Baidu Zhidao, Baidu space featuring Blog + Space) New online advertising spaces and payment techniques were perceived more cost efficient for the advertisers as they better monitor the return on investment. More over Baidu launched “Baidu Alliance”
The goal of this case is to broaden our knowledge of new business models and that of how local companies may struggle against foreign competition. You are asked to answer the following questions: 1 / What led to Baidu's market dominance? Compare the two business models and their evolution 2 / How do you recommend Google to do in China? Compare Google position with the one of other companies in the internet-related industries. What can we learn from this comparison? 3 / How do you recommend Baidu to do in the international market?
Question 1 China witnessed the highest economic growth in the world since the adoption of its reform and openness to the outside policy. This growth has affected the Internet market in a very remarkable way, where the annual average in China’s Internet usage exceeded 39%. Many factors have led to Baidu’s dominancy in the Chinese market even over more experienced and global players as Google, Yahoo...etc
Linguistic advantage: the Chinese Language is the dominant language in China which is read and spoken by the whole population. This gives a better advantage to local start up like Baidu to efficiently design an engine that is more relevant to the country culture. Social Cultural Advantage: Baidu as A local player knows the taste and preferences of the Chinese Internet users’ way more than its Competition does, there for solutions Were designed to better fit the requirements of the locals For example, typing replaced by a click on a menu list. Introduction of customer oriented technologies based on the Chinese internet habits ( for example Baidu MP3 music, Post bar, Baidu Zhidao, Baidu space featuring Blog + Space) New online advertising spaces and payment techniques were perceived more cost efficient for the advertisers as they better monitor the return on investment. More over Baidu launched “Baidu Alliance”