SWOT analysis of Google

This is a Google Inc. SWOT analysis for 2013. For more information on how to do SWOT

analysis please refer to our article.

Company background

Google Inc. is a multinational corporation that provides Internet-related products and

services, including internet search, cloud computing, software and advertising technologies.

Advertising revenues from Ad Words generate almost all of the company's profits.

You can find more information about the company in its official website or Wikipedia’s article.

SWOT analysis of Google

Google SWOT analysis 2013

Strengths Weaknesses1. Open source products and services

2. Quality and customer experience are the

primary objects

3. Financial situation

4. Access to the widest group of internet

users worldwide

5. Strong patents portfolio

6. Product integration

7. Culture of innovation

1. Relies on one source of income

2. Unprofitable products

3. Patent litigations

Opportunities Threats

Name Google Inc.Industries served InternetGeographic areas served WorldwideHeadquarters U.S.Current CEO Eric Schmidt and Larry PageRevenue $ 50.17billion(2012)Profit $ 10.7billion(2012)Employees 53,861 (2012)Main Competitors Apple Inc., Facebook Inc., Microsoft

Corporation, Samsung Electronics Co., Ltd., International Business Machines Corporationand many others.

1. Growing number of mobile internet users

2. Obtaining patents through acquisitions

3. Driverless electronic cars

4. Growing into electronics industry

5. Google fiber cables

1. Growing number of mobile internet users

2. Unprofitable products

3. EU antitrust laws

4. Competition from Microsoft

Strengths

1. Open source products and services. As the company states:” Google’s mission is to

organize the world’s information and make it universally accessible and useful.” The same is

with almost any of Google products. Let it be Google maps, calendars, drive, OS or the

advices how to rank better in a search index. Google’s products can also be used with any

OS or mobile device without a charge. Google openness is the key why Google is the

number one in many products and services.

2. Quality and customer experience are the primary objects. Everything that Google

offers is of premium quality. The products are aimed at solving customer needs and

problems by providing excellent customer experience.

3. Financial situation.Google is one of the most profitable companies in the world with

earnings nearly $50 billion and $11 billion profits (22%). The company also holds $48 billion

in cash and just $7 billion of debt. Few other companies are so strong financially to compete

with Google.

4. Access to the largest group of internet users worldwide. Google has an access to

79% of the world desktop search market users and89% of the world mobile search market

users. Combined, these internet users represent an extremely large market that Google can

use to promote and sell its products and services.

5. Strong patents portfolio. In 2012, Google added 1,151 patents andwas the 21st company

worldwide in terms of number of patents. Intellectual property is the key in competing against

competitors and Google with Motorola’s acquisition gained a strong advantage over its

competitors.

6. Product integration. Nearly all Google products are integrated with each other forming an

ecosystem that enriches customers experience and encourages using more of company’s

products and services. Besides, Google products can be used on any OS or any device

without a trouble or can be integrated with other companies’ applications. No other major

tech company offers the same level of integration.

7. Culture of innovation. Many unique products are offered by Google every year, with so

many in development stages. According to Boston Consulting Group (BCG) Google is the 2nd

most innovative company in the world. The company was also the second company to add

the most patents in 2012. Google emphasizes its innovative work culture as one of its main

competitive advantages.

Weaknesses

1. Relies on one source of income. More than 90% of Google’s revenue comes from online

advertising. Online advertising is expected to grow in double digits in 2013 and will grow

Google’s income in the short term. But in the long run, Google may experience slow income

growth or even the decline due to a few reasons. First, the market for personal computers is

growing slowly and the Google experiences the overall decline in its desktop search engine

market. If Google won’t push the competition back it will lose not only the market share but

the main source of its income as well. Second, Google as many other firms, find it hard to

monetize mobile device users, who will represent the highest growing group in online

advertising. Third, online advertising growth is driven by emerging economies where an

average price for an advertisement is considerably lower than in the developed economies,

so the growth of online advertising will only grow the income of companies insignificantly.

2. Unprofitable products. Google has many products and services that add little value for

the company and make only losses, thus decreasing firm’s profits.

3. Patent litigations. Google is often involved in litigations over the breached patents and

other intellectual property. These litigations are costly and time consuming and distract the

company from innovating rather than litigating.

Opportunities

1. Growing number of mobile internet users.Google has an opportunity to create a

platform that could be used to better display ads for mobile device users and increase firm’s

income.

2. Obtaining patents through acquisitions. For Google to grow and to compete

successfully, it has to obtain more new patents. One way of doing that is to acquire

companies that have strong patents portfolio. Google has acquired Motorola in 2012,

obtaining more than 17,000 patents from the company.

3. Driverless electronic cars. Goggle has introduced and successfully tested driverless

cars in Nevada, U.S. The technology of these cars could easily be installed in any future

model and would be a huge technological step. Although, Google has no intentions of

manufacturing such cars itself, the company could sell licenses for car manufactures for

using their technology and IP.

4. Growing into electronics industry. Google has already launched a few new models of

notebooks, tablets and smartphones into the market but these were only introduction models.

Google could strengthen its entry into electronic devices industry by introducing more

products for more customer groups and cut out its market share. This would result in tighter

integration of its software products and diversified income.

5. Google fiber cables. Google is currently testing their new fiber cables that can deliver

internet content at astonishing 100 times as fast as current providers. It is wise for Google to

invest in such infrastructure that virtually would have no competition and would integrate the

company vertically.

Threats

1. Growing number of mobile internet users. Goggle finds it hard to monetize mobile

internet users as there is less space to place ads on a mobile device and the ads costs less

than usual. The growing number of mobile users means fewer searches made on the

personal computers and lower income growth or even decline for Google.

2. Unprofitable products. Google has introduced many products and services but few of

them earn profits for the company. Most of the services are the burden for Google and only

makes losses. If Google continues to introduce new products that add little value and only

make losses, the company’s profits will fall.

3. EU antitrust laws. Google is currently accused by EU of using its dominating position in

internet search engine market to display its own services higher than competitors’ in search

results. If proved guilty, Google would have to pay fines that would significantly lower firm’s

profits.

4. Competition from Microsoft. Microsoft is gaining a market share in internet searches

and is playing an important role against Google. The company has also introduced Windows

8, the OS aimed for mobile devices, to carve out its market share in mobile OS market. In

both fronts, internet search and mobile OS, Microsoft is challenging Google and is taking

away the potential revenues.

Sources:1. NetMarketShare (2013). Market Share Trend Highlights. Available at:

http://www.netmarketshare.com/

2. Google (2013). Investor Relations. Available at: http://investor.google.com/

3. Finley, K. (2013). Google, Apple, South Koreans Challenge IBM for Patent Crown. Available at:

http://www.wired.com/wiredenterprise/2013/01/patents/

4. Garside, J. (2013). Google set for Brussels showdown. Available at:

http://www.guardian.co.uk/technology/2013/jan/10/google-brussels-europe-regulatory-showdown

5. McCue, T. J. (2012). Apple #1, Google #2 - 50 Innovative Companies Ranked By 1,500 Execs.

Available at:http://www.forbes.com/sites/tjmccue/2013/01/10/apple-1-google-2/

6. Wikipedia (2013). Google. Available at: http://en.wikipedia.org/wiki/Google