SWOT analysis of Google.docx

7/25/2019 SWOT analysis of Google.docx

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SWOT analysis of Google

Company background

Name Google Inc.

Industries served Internet

Geographic areas served Worldwide

Headquarters U.S.

Current CEO Eric Schmidt and Larry Page

Revenue $ 50.17 billion (2012)

Profit $ 10.7 billion (2012)

Employees 53,861 (2012)

Main Competitors

Apple Inc., Facebook Inc., Microsoft Corporation, Samsung

Electronics Co., Ltd., International Business Machines

Corporation and many others.

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 business in itsofficial websiteorWikipedias article.

SWOT

Google SWOT analysis 2013

Strengths Weaknesses

1. 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

1. Relies on one source of income

2. Unprofitable products

3. Patent litigations
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7. Culture of innovation

Opportunities Threats

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: Googles mission is toorganize the worlds 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. Googles 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 incash 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 and 89% 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 and was the 21st business

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

competitors and Google with Motorolas 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 companys

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

organization 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 business in the world. The company was also the second patent creator in

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

competitive advantages.


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Weaknesses

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

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

Googles 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 wont 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

business and make only losses, thus decreasing firms 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 firms 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 havestrong patents portfolio. Google has acquired Motorola in 2012, obtaining more than 17,000

patents from the business.

3. Driverless electronic cars.Google 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 moreproducts 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.Google finds it hard to monetize mobile internetusers as there is less space to place ads on a mobile device and the ads costs less than


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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 business. 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 companys 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 firms

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.

FULL DESCRIPTION

Google Inc. (Google), incorporated on October 22, 2002, is a global technology company.

The Companys business is primarily focused around key areas, such as search, advertising,

operating systems and platforms, enterprise and hardware products. The Company generates

revenue primarily by delivering online advertising. The Company also generates revenues

from Motorola by selling hardware products. The Company provides its products and

services in more than 100 languages and in more than 50 countries, regions, and territories.

Effective September 16, 2013, Google Inc acquired Bump Technologies Inc. Effective

October 22, 2013, Google Inc acquired FlexyCore, a developer of software. Effective

December 6, 2013, Google Inc acquired the entire share capital of SCHAFT Inc. Effective

December 14, 2013, Google Inc acquired Boston Dynamics Inc. Effective January 15, 2014,

Google Inc acquired Impermium Corp, a developer of SaaS application software. Effective

February 7, 2014, Google Inc acquired the remaining 88% interest in Nest Labs Inc. Effective

February 21, 2014, Google Inc acquired Spider.io, a provider of online fraud detectionservices. Effective March 12, 2014, Google Inc acquired Green Throttle Games. In April

2014, Google Inc acquired Titan Aerospace, a Moriarty-based manufacturer of solar-powered

drones. Effective May 5, 2014, the Company acquired Rangespan, a provider of information

technology services. Effective May 6, 2014, the Company acquired Adometry Inc. Effective

May 7, 2014, the Company acquired Appetas Inc, a provider of Website development and

design services, and Stackdriver Inc, a Boston-based provider of prepackaged applications

software in cloud platform. Effective May 16, 2014, Google Inc acquired Quest Visual Inc.

Effective May 20, 2014, Google Inc acquired Enterproid Inc, doing business as Divide. In

June 2014, Google Inc acquired mDialog Corp. Effective June 25, 2014, Google Inc acquired

Appurify Inc, a San Francisco-based developer of mobile bugging application software.Search
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The Company integrates features into its search service and offers specialized search services

to help users tailor their search. The Company also offers product listing advertisements

(ads), which include product information, such as product image, price, and merchant

information, without requiring additional keywords or ad text. In January 2012, it launched

Search plus Your World. During the year ended December 31, 2012, it also introduced

Google Now and Googles Knowledge Graph. Google Now is a search feature that gets the

right information at just the right time. It tells the days weather before start of a day, how

much traffic to expect before you leave for work or school, when the next train will arrive as

youre standing on the platform, or favorite teams score while theyre playing - all

automatically with cards appearing throughout the day at the moment you need them.

Googles Knowledge Graph, enables the user to search for things, people or places that

Google knows about-landmarks, celebrities, cities, sports teams, buildings, geographical

features, movies, works of arts and more-and enhances Google Search in three ways: find the

right thing, get the summary, and go deeper and broader.

Advertising

The Companys AdWords is a primary auction-based advertising program, which delivers

ads to search queries or Web content. With AdWords, advertisers create text-based ads that

then appear beside related search results or Web content on its Websites and on thousands of

partner Websites in its Google Network, which is the network of third parties that use its

advertising programs to deliver relevant ads with search results and content. The Company

also offers AdWords on a cost-per-impression basis that enables advertisers to pay the

Company based on the number of times their ads appear on its Websites and the Companys

Google Network Members Websites as specified by the advertiser. Its AdSense program

enables Websites that are part of the Google Network to deliver ads from its AdWords

advertisers that are relevant to the search results or content on Websites. In June 2012, the

Company integrated its AdMob technology directly into its AdWords system, which enables

advertisers to run campaigns across the more than 300,000 mobile applications running ads

by AdMob - all from within the AdWords interface.

The Companys Display advertising consists of videos, text, images, and other interactive ads

that run across the Web on computers and mobile devices, including smart phones and

handheld computers, such as net books and tablets. The Google Display Network provides

advertisers services related to the delivery of display advertising across publishers

participating in its AdSense program, publishers participating in the DoubleClick Ad

Exchange, and Google-owned sites, such as YouTube and Google Finance. Through itsDoubleClick advertising technology, it provides to publishers, agencies, and advertisers the

ad serving technology, which is the infrastructure that enables billions of ads to be served

each day across the Web. Its DoubleClick Ad Exchange creates a real-time auction

marketplace for the trading of display ad space. In addition, YouTube provides a range of

video, interactive, and other ad formats for advertisers to reach their intended audience.

YouTubes video advertising solutions give advertisers a way to promote their content to the

YouTube community, as well as to associate with content being watched by their target

audience. YouTube also offers analytic tools to help advertisers understand their audience

and derive general business intelligence.


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The Company is focused on developing easy-to-use ad products to help advertisers extend

their reach, help create revenue opportunities for its publisher partners, and deliver relevant

and useful ads to users on the go. Google Mobile extends its products and services by

providing mobile-specific features to mobile device users. The Companys mobile-specific

search technologies include search by voice, search by sight, and search by location. Google

Mobile also optimizes a number of Googles applications for mobile devices in both browser

and downloadable form. In addition, the Company offers advertisers the ability to run search

ad campaigns on mobile devices with mobile-specific ad formats, such as click-to-call ads in

which advertisers can include a phone number within ad text. AdMob also offers effective ad

units and solutions for application developers and advertisers. The Company provides users

with relevant local information. The Company has organized information around more than

80 million places globally from various sources across the Web. Users can find addresses,

phone numbers, hours of operation, directions and more for millions of local queries like

shops, restaurants, parks and landmarks right on Google.com, on Google Maps and on

Google Maps for mobile. Its products and services also help local business owners manage

their online presence and connect with potential customers.

Operating Systems and Platforms

The Companys Android is a free and open source mobile software platform that any

developer can use to create applications for mobile devices and any handset manufacturer can

install on a device. Google Chrome OS is an open source operating system with the Google

Chrome Web browser as its foundation. Both the Google Chrome OS and the Google

Chrome browser are built around the core tenets of speed, simplicity, and security. The

Chrome browser runs on Windows, Mac, and Linux computers. Google+ is a new way to

share online just like users do in the real world, sharing different things with different people.

Google Play is a cloud-based, digital entertainment destination with more than 700,000

applications (apps) and games plus music, movies and books that its users can find, enjoy and

share on the Web and on their Android phone or tablet. Google Drive is a place where users

can create, share, collaborate, and keep all of their stuff. Google Docs is built right into

Google Drive so users can work with others in real time on documents, spreadsheets and

presentations and users files go everywhere they do. Google Wallet is a virtual wallet that

securely stores credit and debit cards, offers, and rewards cards. Users can tap their phone to

pay in-store using Google Wallet anywhere contactless payments are accepted - at over

200,000 merchants across the United States. Google TV is a platform that gives consumers

the power to experience television and the Internet on a single screen, with the ability to

search and find the content they want to watch. The Google TV platform is based on the

Android operating system and runs the Google Chrome browser.

Enterprise

The Companys enterprise products provide Google technology for business settings.

Through Google Apps, which includes Gmail, Google Docs, Google Calendar, and Google

Sites, among other features, it provides hosted, Web-based applications that people can use

on any device with a browser and an Internet connection. In addition, the Company provides

its search technology for use within enterprises through the Google Search Appliance (real-

time search of business applications, intranet applications, and public websites), on their

public-facing sites with Google Site Search (custom search engine), and Google Commerce


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Search (for online retail enterprises). The Company also provide versions of its Google Maps

Application Programming Interface (API) for businesses (including interactive Google Maps

for public and internal Websites), as well as Google Earth Enterprise (a behind-the-company-

firewall software solution for imagery and data visualization). Its enterprise solutions have

been adopted by a variety of businesses, governments, schools, and non-profit organizations.

Motorola

The Companys Motorola business consists of two segments: Mobile segment and Home

segment. The Mobile segment is focused on mobile wireless devices and related products and

services. The Home segment is focused on technologies and devices that provide video

entertainment services to consumers by enabling subscribers to access a variety of interactive

digital television services.

The Company competes with Facebook, Inc., Twitter Inc., Yahoo! Inc., Microsoft

Corporation, eBay Inc., and Amazon.com, Inc.

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