Introduction
Baidu Inc. with the ticker symbol BIDU is recognized as a multinational technology company that is based in the district of Haidian in Beijing, China. Ever since its foundation by Eric Xu and Robin Li in January 2000, the company has been dealing in the delivery of the services and products related to the internet and artificial intelligence (Li, 2022). The product portfolio of the company includes Hoakan, Quanmin, Baidu Wiki, Baidu Maps, Baidu Knows, Baidu App, DuerOS, Baidu Experience, Baidu Union, Baidu Health, and Baidu Post (Liu et al., 2021). Baidu Inc. offers services that include AI Cloud, Marketing Cloud Platform, and P4P. Additionally, the company is recognized as one of the leading internet and artificial intelligence companies globally. The company has got its holding group that is incorporated on the island of Cayman. When the internet ranking is considered worldwide, Baidu falls in position sixth when ranked by Alexa. In the earlier beginnings of Baidu Inc., its founder Robin Li developed RankDex in 1996 as the first search engine (Li, 2022). Through different segments within the company, it is possible to formulate various ways in which the company can gain a competitive advantage.
Company History
In 1994 before the foundation of the company, Robin Li made significant footprints in various companies for instance development of software used in the online edition of the journal of Wall Street. Li later developed several better algorithms that were adopted to be used for search engines. It was then in 1996 that the founder came up with the idea of a site scoring algorithm known as RankDex. The developed search engine relied on the use of hyperlinks in determining the quality of the website or doing an analysis on various links to ascertain the quality of various websites. Later on, in 2000, the Baidu company was incorporated by Eric Xu and Robin Li where the website was open for booking of space for ads.
Three years later, the company incorporated some more features such as the search engine for pictures, and special technology to be used in identifying and grouping various articles and public works. After Bindu Inc. went public in 2005, it began to team up with other groups to modify the search engines. The collaboration between Baidu Inc. and Qualcomm led to the introduction of free cloud storage for mobile devices with Snapdragon processors. In recent years, it launched Baidu Busca, which is a version of Brazilian search engines, it acquired Peixe Urbano, local e-commerce. Additionally, it has made connections with various other companies such as Bosch. Baidu has benefitted these companies with its AI technologies and other internet services. Baidu has invested immensely in AI and is yet to launch self-driving buses.
Products and Services
Baidu Inc. provides internet search services in the Chinese language and can be used by several individuals. The web search engine that the company offers presents a bundle of web search, image search, video search, web dictionary, news, open platforms, top searches and search index. These products and the services that the company offers functions in various ways such as creating a platform where advertisements can be aired and a platform where people access information.
Baidu comprises two categories of segments that entail Baidu core and iQIYI, the two have got different shares in the market and Baidu core contributes largely to iQIYI. Baidu Core is powered by AI and provides services that are mainly online based and those services that are of non-marketing value. Additionally, the segment contains products and services that are derived from new AI initiatives that are utilized in powering growth engines that include AI cloud, mobile ecosystem, intelligent driving, and other growth initiatives. The mobile ecosystem entails products that include Baidu App, which enables access to various entertainment and educational content. The system contains the Hakan that permits uploading the content online, rating other people’s content, sharing, commenting, and following. Through those services, the site enables its users such as video creators and curators to build a fan base. Quanmin is recognized as a mobile product by Baidu that is used as an application for flash videos that is used in the creation of short videos. These short videos are majorly for entertainment purposes and are usually personalized by Baidu AI algorithms.
Additionally, the company has got products that are centric and internally developed in a way that various knowledge and information can be retrieved from them. Most of these products are always for learning and research purposes, others users rely on them for general knowledge. Some of these products include the Baidu Wiki, a Chinese leading wiki that has been compiled by qualified personnel and features columns of high quality. Baidu Knows presents a platform where various users pose questions for professionals to reply and with that, they get to be assisted. Baidu Experience is another platform by the company that users share out their experiences with the public. This platform plays a significant purpose as it provides teachings on practical issues that influence the daily lifestyle of human beings. Baidu post is a platform that was created by the company to allow users to post and in return leads to the creation of various communities of people who discuss various issues online.
The presence of AI building blocks such as the Baijiahao, the smart mini-program, and managed page. Sites or pages that are managed are provided by the company to users to enable or ensure that the information of its customers is secure and more reliable. The company offers servers, bandwidth, and software to its clients who subscribe to the services. The smart mini-program is a critical application that was designed by Baidu for application, developers to share their services and content. Additionally, the Baidu company availed the Baijiahao accounts that are being used in the aggregating of the various articles, live videos, short videos, and photos.
The company offers a marketing cloud platform, for the integration of a one-stop shop, the site incorporates user management, which will later lead to lead generation and healthy and profitable relationships with the customers. In addition, the company offers search marketing services aimed at increasing relevance in sponsored searches and thereby increasing client value. Customers that wish to bid for the placement of priority paid and sponsored links should use P4P. Through these amazing services, users can get several customers with the available improved services.
The company has got Baidu Core which is meant for intelligent driving. Currently, as evidenced by the number of miles and test licenses, Baidu Inc. is recognized as China’s most autonomous driving company. The company recently, in 2020 recorded higher autonomous driving licenses and miles covered as compared to other companies that recorded few autonomous driving licenses. Additionally, the company is responsible for the initiation of Apollo self-driving where it invested in the self-driving technology of L3 and L4 and hence has been providing automakers with self-driving services (Wang et al., 2019). The Apollo self-driving is provided with HD maps that enable it to easily self-drive to various places within China. The company modified the L4 in such a way that it enables the car to park and the driver would come out of the car after safe parking.
The company has invested in Apollo Robotaxi that currently provides a massive opportunity to Chinese citizens. The technology relies on the highest level of license T4 that is provided by the Municipal Commission of Beijing which is responsible for transport marketing groups. The license enables the robotaxi that relies on pilot programs to operate or drive-in complex situations such as school zones, roads through urbanized areas, and other tunnels.
Baidu Inc. did invest in the health sector within China, the company came up with what is known as Baidu Health. This initiative led to the promotion of telemedicine, seminars for various doctors, live streaming, discussion forums, and other social accounts for both the doctors and various hospitals. With this initiative, the health care services have been improved and the delivery of quality care fastened.
The company’s Duer OS plays a significant function as a smart assistant in the Chinese language. The powers several smart homes, various smartwatches, third-party mobile phones, story machines, and smart devices. The technology relies on the AI to effectively conduct its functions making life simple as most of the activities for instance in smart houses are done by voice command. Lastly, Baidu maps play a significant role in the Chinese people, this service is accessed through voice commands and it includes features such as route planning, POI search, real-time traffic conditions, and precise navigation.
Operations
Baidu focuses on China where most of its services are to control the search market same as the functions of Google. Baidu Inc. operates majorly in China covering a percentage of 97.3%, 0.8% in the United States, and 0.6% in Japan as shown in figure 1. Censors created by the company work and are regulated by the laws and regulations of China. China’s great firewall blocks the operations of google to enable the dominance of Baidu search engines. Baidu company is registered on the island of Cayman and is as well listed on Nasdaq under BIDU as the ticker symbol.
Vision
The company’s vision is to come up with the technologies and services that simplify the currently available technology for easier use and accessibility by various users. Baidu Inc. has got a vision statement that aligns with its plans, the vision is inclusivity in all its sectors. Through its vision, Baidu Inc. adopts a vision that lays out its management and staff by defining where the company would want to be in the future. The company has structured its vision that encompasses all the service and product delivery sectors in a way that improves efficiency.
Mission Statement
The company’s mission statement is to make the complicated technological world simpler for its users. The company’s mission ensures that the customers’ satisfaction is met and there exist strategic goals that ensure the company’s core competencies are implemented. The management of the company ensures that as stated in the mission statement, the company reflects on the offering presented to customers. In China and other nations that have access to Baidu services, the company avails its services and products to the users where they can make good use of the AI technology. With the presence of Duer OS and Baidu health, managing health care has become easier for instance through the use of telemedicine. Such inventions and implementation in the field of health have improved the lives of various people in China because of the proper advanced healthcare service.
Corporate Values & Culture
Baidu’s corporate culture is driven more by internal factors than by external factors. Despite the need of establishing an ethical mindset while reacting to market requirements, senior management publicly stresses the importance of adopting a swift reaction to changing client needs. The company is dedicated to incorporating ethics and integrity into its business practices. The organization’s internally generated organizational culture has allowed it to use its ethical brand image to gain a significant competitive advantage over competitors. Baidu management recognizes the importance of its human resource and places a premium on the motivation and the satisfaction of the employees. Even though the staff is given hard targets, management addresses their complaints and avoids pressuring them, which might lead to burnout. Assigning demanding objectives and delivering rewards to maximize task performance, providing employees the essential mentoring, coaching, and guidance to meet the set goals achieves the balance between orientation and task of the employee.
The corporation is more closely associated with a disciplined work culture with a tall structure and vertical hierarchy, according to an examination of Baidu’s organizational culture. It means that management retains decision-making authority and exerts direct control over employee performance. Employees are rewarded for their inventive and creative work behaviors with monetary and non-monetary incentives, yet empowerment and autonomy are constrained owing to businesses’ predisposition for rigid work discipline.
In the instance of Baidu, the corporation encourages its staff to be professional. There is no requirement to act in a certain way. The company promotes diversity that exists among the employees. This happens to take advantage of the opportunity that such constructive disagreements present. This demonstrates the need of creating a professional organizational culture to succeed in such a diverse setting. Nevertheless, due to the increased demand for autonomy and empowerment among employees, management has opted to gradually transition from a decentralized and centralized organizational structure. As a result of this transition, some power will be transferred from the top to the bottom, and the organization will achieve a new balance between rigid and flexible structures.
SWOT Analysis
Baidu Inc.’s SWOT analysis scrutinizes the strength, weaknesses, opportunities, and threats of its brand. SWOT Analysis is recognized as a framework that allows a company such as Baidu to compare its performance and business against that of its competitors. It is a fantastic tool for determining where the organization succeeds, where it falters, developing remedies, and determining how the company may expand. As one of the leading firms in the internet service industry, a proper review of the SWOT analysis enables Baidu to maintain its competitive advantage in the market.
Strengths of Baidu
Baidu company relies on several products such as big data and services like AI to empower both the society and the company itself. Through AI the company guarantees the proper functionalities in its online service delivery. The incorporation of machine learning, while other companies have not, is a potential competitive advantage for the company as compared to others. The provided AI will have the ability to manage and execute the available big data both for the users and the company.
Additionally, the company should establish a track record of its successful market entry. With the ability to enter the market and make much of the action, the company has been able to introduce and launch several products and services. For the company, the use of strategies such as reward programs has always been a step toward gaining a competitive advantage. The availability of a strong brand portfolio plays a significant percentage of 85% market share within China (Comparably, 2022). With this percentage of portfolio brands, the company has got a great competitive advantage hence hard to be out of the market. Lastly, the availability of visionary leaders such as the two founders has been responsible for the success of the company.
Weaknesses of Baidu Inc.
One of the weaknesses is that there exists no brand recognition beyond China, this tells the main reason why most individuals outside China do not know of the company. Additionally, the company has been limiting its global market reach because of the inability of most users outside China to use the Chinese language. The company has not yet harnessed full technological advancement on its front-end operations as it has done to the operations at the back end. Lastly, even though the Baidu brand is the most active online search engine, it has been restricted in some areas due to federal reasons.
Opportunities For Baidu
The company has got several advantages when it comes to further development in the field of internet technology. The presence of well-developed IT infrastructure and outstanding servers in China has enabled its expansion. Additionally, due to the demand for E-commerce and social media networks globally especially during the COVID-19 pandemic, the company has been launching an international social network (Jiang et al., 2021). Baidu has the potential of expanding its operations globally by incorporating the English language into the operation of the service globally, a strategy that can improve its internet marketing services.
Threats that Baidu Faces
The company has been facing fierce competition from other similar companies like google, especially outside China, for instance, in the United States. The reason for this strong competition is the strong profitability that the companies are fighting for. With globalization, it will not be profitable enough for the company to only operate within China’s borders, the company management will need to deal with various cultural diversities. Due to the lack of alternative search engine platforms, the company is unlikely to beat others like google which embraces several cultures globally as compared to Baidu which majorly recognizes the Chinese culture. Lastly, Baidu’s pace of innovation has been considered to be slow as compared to that of Google, this is because Google has got lots of funds as compared to Baidu which has facilitated its fast development.
Competition
Baidu faces competition from several search engine companies search like Google, yahoo, and the Alibaba group holding limited. Among the Baidu competitors, the company is ranked 3rd when the CEO ranking, products, and services are done, the two companies that are much ahead of the company include Alibaba Holdings and Google (Comparably, 2022). When it comes to the Net promoter score, the company is ranked second after the Google company. When it comes to the company’s customer service, the company is ranked second after Google. Lastly, Baidu is ranked 3rd in culture and diversity score and employee net promoter score, these types of competitions tell how tight the competition is between the four search engine companies.
Management Team/Leadership
Baidu Inc.’s top leaders comprise the board of directors, which is headed by the chief executive officer (CEO) and other independent directors who are answerable to the CEO. With the presence of a goal-oriented executive team, operations within the company can function well and properly. The executive team always ensures that the rest of the employees are goal-oriented and that they maintain the diversity and the culture of the company.
Financial Outlook (Financial Predictors)
Baidu Inc. has been having a strong increase in the non-advertising business where the company has gained more revenue in the Baidu AI cloud. In 2021, there was a 21% growth in revenue of Baidu core, where there was a 71% increase in non-advertising revenue as compared to the fiscal year 2020 (CNN Business, 2021). It has been predicted that 12 months from May 2021, Baidu Inc. there is a median target of 199.9% with a 316.3% high estimate and a low estimate of 126.7% (CNN Business, 2021). Therefore, the median estimate is considered to be having an increase as compared to the initial percentage which was 124.44%. The company is therefore likely to make an increase in the amount of revenue in the near coming future.
Strategies
Generally, the strategy for the growth of Baidu Inc. has been reliant on the focus of the company on the Chinese language. The company’s focus on the language has made it popular as the company’s search engine can analyze the language and give back quality answers to the Chinese texts. The company is preferred by most users within China because of its great variety of unique advanced features that it avails to its customers.
Conclusion
The company serves a lot of functions as the major search engine for the Chinese people. The company has the potential for expansion into other nations if it can adapt and nature various cultural diversities. With the various AI services that apply to the field of marketing and healthcare, the company is focused to grow its revenue but not as fast as compared to Google. Therefore, for Baidu Inc. to outdoor other search engine companies, the company has to embrace other cultures and expands to various nations around the globe.
References
CNN Business (2021). Baidu Inc.Stock Price Forecast. Web.
Comparably (2022). Baidu Competitors. Web.
Jiang, B., Zhu, H., Zhang, J., Yan, C., & Shen, R. (2021). Investor sentiment and stock returns during the COVID-19 pandemic. Frontiers in Psychology, 12. Web.
Li, G. (2022). Baidu: The Long March Towards Success. 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022). Atlantis Press. Web.
Liu, H., Gao, Q., Li, J., Liao, X., Xiong, H., Chen, G.,… & Xiong, H. (2021). Jizhi: A fast and cost-effective model-as-a-service system for web-scale online inference at Baidu. Proceedings of the 27th ACM SIGKDD Conference on Knowledge Discovery & Data Mining. Web.
Wang, J., Yamamoto, T., & Liu, K. (2019). Role of customized bus services in the transportation system: Insight from actual performance. Journal of Advanced Transportation, 2019. Web.
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