Google SWOT Analysis

SWOT is an acronym for strengths, weaknesses, opportunities and threats related to organizations. The following table illustrates Google SWOT analysis:

Strengths

  1. Undisputed market leadership in search engine
  2. First mover advantage for many products and services
  3. Organizational culture and spirit of creativity
  4. Ecosystem of products and services
Weaknesses

  1. Reliance on advertising as primary source of revenues despite diversification
  2. Many products and services in Google portfolio are not profitable
  3. Lack of flexibility due to size
  4. Sharing user information

 

Opportunities

  1. Increasing presence in consumer electronics industry
  2. Acquisitions of related businesses
  3. Cloud computing
  4. Further developing Google+
Threats

  1. Failure of costly projects
  2. Competition
  3. Challenges of maintaining the current growth rate
  4. Potential lawsuits

Google SWOT Analysis

Strengths

1. Initially introduced only as a search engine, Google has effectively dominated this segment due to the speed and efficiency of operations according to the mission of the company “to organize world’s information and make it universally accessible and useful”[1]. As it is illustrated in Figure below, Google has the market share of more than 65.7% in desktop search engine, whereas its closest competitor China-based Baidu has the less than one fourth of Google’s market share. Google’s current leadership in search engine attracts massive revenues via advertising and this position has also positive implications on the sales of its own products and services.

 

Google SWOT Analysis

Desktop search engine market share

 

2. Google invested in research and development $6.1 billion, $7.1 billion, and $9.8 billion in 2012, 2013, and 2014, respectively[2]. Massive investments in research and development has enabled the company introduce new products for new markets in a consistent manner, thus adopting first mover advantage as a competitive advantage of the business. Specifically, range of innovative products and services introduced by Google include, but not limited to self-driving car equipped with video cameras, radar sensors and a laser range, Google TV, a platform that integrates television and internet, Google Replay, a source for achieve of tweets, Priority Inbox feature in e-mails and others. The first mover advantage gained by Google for above and many other products allowed the company to generate massive revenues from the sales to innovators, early adopters and early majority customer segments at the same time gaining leadership positions in respective markets.

 
3. Google’s organizational culture is famous for its high level of informality and effective integration of work with play. This is reflected in design of Google offices around the globe where video games, sharing cubes, pool tables, and even bowling  lines are available for employees to be used at any times. Google is very popular workplace target among many graduates, as well as, seasoned professionals around the world. Google’s consistent position as Number 1 on Fortune’s list of BEST 100 COMPANIES TO WORK FOR[3] since 2010 can be interpreted as an indication of rewarding organizational culture.

4. The majority of Google products and services are effectively integrated with each-other forming an ecosystem that encourages the use of products and services. For example, Google runs Blogger that can be monetized with Google AdSense, the contents of the blog can be promoted via Google AdWords and content files can be stored in Google Drive.

 

Weaknesses

1. Despite highly diversified portfolio of Google products and services, 89% of revenues in 2014 were generated from advertising[4].  Sustainability of this revenue source is not ensured as advertisers can terminate contract at any time due to a wide range of reasons. Additionally, introduction of fundamentally innovative forms of advertising by competition can result in highly negative implications for Google in short-term and long-term perspectives.

2. Google’s portfolio of products and services is wide and it includes the ones that do not contribute to the bottom line of the business. Previously, the company abandoned unprofitable Google Notebook in 2012 and Google Reader in 2013[5], however there are still some products and services offered by Google that have negative impact on overall profitability of the business….

 Google Report contains SWOT, PESTEL, Porter’s Five Forces and Value-Chain Analyses. The report also comprises analysis of Google’s marketing strategy and company’s approach towards Corporate Social Responsibility (CSR).

 

Google Report

 



[1] About Google (2015) Google, Available at: http://www.google.com/about/company/

[2] Annual Report (2014) Google

[3] Fortune (2015) Available at: http://fortune.com/best-companies/

[4] Annual Report (2014) Google

[5] Rogers, T. (2013) “The Demise of Google Reader”, Available at: http://timrogers.uk/2013/03/23/the-demise-of-google-reader/