Google LLC, an Alphabet Inc. subsidiary, is a crucial player in the online services sector. This SWOT analysis examines the internal and external strategic elements that influence the technology business. These strategic considerations relate to how businesses deal with competitors.
This competitive landscape necessitates strengths to ensure business survival and success in the face of rapid innovation and change in the online services and consumer electronics markets.
This SWOT analysis evaluates Google’s strengths and weaknesses and opportunities and threats in the industrial environment.
We consider the market developments resulting from rapid technological advancements and shifting preferences and expectations of consumers when we evaluate the firm. A SWOT analysis is helpful for strategic planning at Google LLC.
Google was created in 1998 in California, United States of America, by Larry Page and Serge Brin. While attending Stanford University, the couple founded a gigantic technological firm as a study project.
Table of Contents
- Google SWOT Analysis
- Strength Of Google
- Weaknesses Of Google
- Opportunities For Google
- Threats For Google
- Final Words on Google SWOT Analysis
Since then, the company has grown enormously and has established itself as a technology titan in the mainstream media.
Global search engines have altered the landscape of the digital world. It has simplified life. All it takes now is a click of the mouse to obtain information.
Google SWOT Analysis
|Year founded||September 4, 1998|
|Industries||Online Advertising, Cloud Computing, Search Engine, Android OS|
|Headquarter||Mountain View, California, United States|
|Market Cap||$1.898 Trillion (As of August 2021)|
|Revenue||$183 billion (For 2020)|
Google’s game-changing operations have continued to make evolutionary advances.
It has fundamentally altered the world economy. Corporations, clients, consumers, and nearly anybody else now have easy access to company information at any time and from any location.
Google is one of the most valuable corporations on the planet due to its innovative and profitable business model and extraordinary branding and associated initiatives.
The internal and external elements identified in this SWOT analysis are considered in the technology organization’s strategic planning and competitive positioning.
Google’s general competitive advantage plan and aggressive growth tactics are related to these SWOT analysis elements.
Strength Of Google
The business analysis identifies strengths in information and communication technologies and their impact on corporate competitiveness.
Considering Google’s SWOT analysis model, it has strengths that allow it to handle the tough worldwide competition.
The following internal elements contribute to Google’s success in the context of computing technologies, innovation, the internet environment, and market conditions:
1. Search Engine Market Leader
The greatest strength of Google is that it is the undisputed leader in search engines, which means it controls the majority of global internet searches.
The market share of Google for online searches is more than 65 percent, and its competitors are nowhere close to it.
There is no doubt that Google is the world’s leading online search engine. Google will have an 86.86 percent market share in desktop searches worldwide by July 2020, according to Statista.
2. Web Search Engine
Google Search is the company’s search engine, which is used by Internet users to find information.
It is the world’s most commonly used search engine, with an 86.6 percent desktop market share and a 95.03 percent mobile market share as of February 2021.
Google controls over 97 percent of the mobile search market share in Europe, especially dominating.
Yandex holds a 0.65 percent market share, followed by Google, Yahoo, Baidu, and Baidu – all of whom have respective market shares of 2.69 percent, 1.47 percent, 1.33 percent, and 0.65 percent.
3. Massive Data Collection
Google has created a plethora of applications and tools. Android is the operating system that powers more than half of all smartphones worldwide.
Gmail (and GSuite) is the industry standard for personal and business email. Google Drive is a cloud storage service that offers both free and paid storage for digital files.
There is also YouTube, the most popular video-sharing network globally, owned by Google. Google uses these tools to tailor its ads to individual users based on the information they collect.
4. Ability to Generate User Traffic
There is no doubt Google is a household name throughout the world, thanks to its ability to increase internet traffic.
Google receives an average of 1.2 billion unique queries per month. Its competitive advantage is unmatched in the industry.
5. Mobile Operating System
Android OS is the world’s most popular mobile operating system, being utilized by some of the world’s top smartphone manufacturers, including Samsung, Huawei, Xiaomi, Vivo, OPPO, and Lenovo.
Apple’s iOS held a 27.33 percent market share in February 2021, compared to Google Android’s 71.9%. Android is the only major player on the market.
As Android has grown in market share, other Google products have gained popularity, including Google Play, Google Maps, Chrome, and Google Search, further cementing Google’s leadership.
6. Ad-based business model
Ad income accounts for the lion’s share of Google’s profits. The corporation retains 30% of the income generated through the Google Play store (found on all Android operating devices).
The firm’s ad revenue strategy, which generates enormous profits through agreements with third-party sites, has served the corporation well in terms of its ability to hoover up resources and grow both its top and bottom lines. This is another critical strength of the company that has aided in its ascension.
Ad money is also generated through partnerships with third-party websites. These strategies contributed to Google generating $38.9 billion in advertising revenue in 2019, a 19% increase over the previous year.
7. Most Valuable Brand
Google is a globally renowned brand. Google is ranked #2 on Forbes’ list of the world’s most valuable brands, behind Apple.
8. Rapid Growth
Google is one of the world’s fastest-growing companies. In 2001, the company had fewer than 300 employees; by 2004, it had grown tenfold to 3000 people; by 2011, it had grown tenfold again to 32,470 employees; and by 2015, it had more than doubled 61,814 employees. By 2018, Google had surpassed 98,000 employees and had grown to over 118,899 by December 2019.
Weaknesses Of Google
Google’s success is hampered by flaws that hinder corporate growth. The SWOT analysis paradigm defines weaknesses as internal variables that diminish efficiency, obstruct growth, or create operational challenges for technical organizations. Google’s business viability is threatened by the following weaknesses:
1. Falling Ad Rates
Over the past few years, particularly in 2013, the company has experienced decreased advertising income, which has impacted its profitability.
This is partly because of the ongoing global economic downturn and partly because of the aggressive marketing by competitors.
Google will face difficulties integrating search engine revenue into its gadgets, as Apple has already begun.
2. The secret Google ranking algorithm.
Why do some websites and articles rank higher than others on Google? Being the first result for a term might be lucrative — you’ll have a better chance of earning advertising money if visitors click on your site.
Owners of businesses will pay for links referring to their website. While search engine optimizers research popular articles and websites, only Google knows the specific method used to rank #1.
Users and business owners have grown suspicious of Google’s system due to its lack of transparency.
3. Data-gathering frightens users
The company’s greatest strength is also its greatest weakness: the massive gathering of user data.
Customers dislike how much Google has access to their personal information through the search engine and apps running on their phones.
The life they lead without Google is complicated, unfortunately. You would have to give up your Google Account, YouTube Account, and Android mobile phone first.
4. Ad revenues are risky.
The sole source of revenue should not be advertising. Google is particularly interested in the “cost-per-click” (CPC) metric. It determines the price at which advertisers are willing to pay for traffic.
Google’s profits decrease proportionally when CPCs decrease. CPCs can drop when advertisers switch platforms and implement new ad types on Instagram or Facebook. They both pose a significant threat to Google’s advertising revenue.
Google’s reliance on advertising fuels concerns about the company’s future. Advertisement-related initiatives accounted for 83.9 percent of the company’s overall income in 2019.
Advertising is a cyclical and competitive industry that is strongly influenced by macroeconomic conditions.
5. Privacy policies
Numerous experts have criticized Google for its undue dependence on privacy, particularly when concealing information regarding algorithms. The company has since taken corrective action.
6. Deceptive Business Practices
Google unfairly exploits its position as the most popular search engine to prevent new players from entering the market. Google has recently been sued for allegedly conspiring with Apple to make it the default search engine for its browser in the United States.
7. High employee turnover
Despite the perks Google provides its employees — comprehensive medical and health care, travel insurance, and lovely vacations — the corporation has a high turnover rate. This is standard for technology organizations; Amazon employees often stay for a year, while Apple staff stay for two.
Consumers despise businesses that promote social evils and oppression or work with tyrants. In June 2020, about 1,600 Google employees petitioned the firm to discontinue giving G-suite services to police departments in response to the Black Lives Matter protests.
8. A weak pricing strategy
Google increased the monthly membership price for its YouTube TV service from $49.99 to $64.99 on June 30, 2020. Google claims that the rise of $15 (30%) reflects the increased cost of content, while others contend that the increase is ludicrous.
Most streaming services, such as Netflix, Disney+, and Peacock, price between $5 and $15 per month and offer more material than YouTube’s 80 TV channels. Google may lose a significant portion of its 2 million YouTube members due to the price increase.
Opportunities For Google
There is room for improvement and expansion at Google. Google SWOT analysis considers opportunities as external factors presenting opportunities for growth and improvement in the performance of a technology firm.
There are several exciting opportunities within Google LLC’s businesses and markets that it can leverage:
1. Android Operating System
Google’s apparent efforts to deploy the Android operating system present the greatest opportunity for growth. The company now stands a better chance of going head-to-head with Apple’s iOS.
A good example is an Android platform. The company has grown into a major competitor of Samsung and Apple. Android devices offer greater customization than iOS devices, which is why users prefer them.
Google phones, by contrast, receive updates immediately. Samsung phones run Android but don’t catch up with system updates for months.
One of the biggest opportunities for Google has come from its pioneering attempt to provide the Android OS (Operating System), which has elevated Google to direct competition with Apple and Samsung.
2. Wearable Market
The smartwatch and fitness band market is booming and lucrative for wearable tech companies like Apple and Samsung, and Google acquired Fitbit in November 2019 for $2.1 billion.
3. Google Play and Google Glass
Google is preparing to launch Google Glasses and Google Play. It has the potential to accelerate Google’s advancement and development.
Google Glass and Google Play are poised to be game-changers for the company, and this represents an immense potential for the corporation to capitalize on.
The corporation’s ability to leverage this feature will likely propel it forward in the nano-computing arena in the future.
4. Ad-free models of business
Google must diversify its revenue streams beyond advertising if it is to remain profitable. There is evidence that the company is making progress, as evidenced by its push to move toward commercial transactions through various sites, including Google Books, Google Maps, and others.
Google currently earns the majority of its revenue from adverts. It’s a fickle market that’s quickly swayed by competition advertisements. Google should diversify its revenue streams and even drive commercial transactions through the company’s numerous apps.
5. Cloud Computing
Google continues to be interested in cloud computing due to its extensive experience delivering storage and cloud solutions.
The cloud computing model is an excellent way to gain a foothold in the enterprise market.
A little over 5.5 percent of Google’s annual revenues ($8.9 Billion) were derived from Google Cloud Platform (GCP) and its services in the fiscal year 2019. Google is investing heavily in cloud services to diversify its revenue streams.
6. Cloud Store
Google’s organization can benefit greatly from cloud computing and cloud storage. The company has announced a new online shop that will sell cloud-based software to all businesses.
MobileIron, Inc., a provider of security, analytics, and app distribution, partnered with the company to bridge its cloud-based commerce platform with MobileIron’s solutions.
7. Remote Work
There has been an increasing demand for remote work solutions, with Microsoft and Zoom making billions off their video conferencing services.
Google has already begun to exploit the growing demand for remote work solutions by including video conferencing features in Gmail to attract companies seeking to enable their employees to work remotely.
8. Expanding into new AI, ML, and robotics industries
A company like Google can rapidly expand into artificial intelligence, machine learning, and robotics.
The company has already established itself as a leader in driverless cars, brought the smart home to life with the Google Home speaker, and bought Fitbit for $2.1 billion.
Threats For Google
The industry faces threats from the proliferation of enterprises and their rapid technological innovation.
These risks are external variables that reduce or obstruct the technological business, as defined by the SWOT analysis methodology. The following threats affect Google’s strategy and profitability:
1. Mobile Computing
As mobile computing continues to multiply, Google faces another threat as new competitors take advantage of this opportunity to expand their mobile computing presence significantly.
2. Apple’s swerving
Apple switched Siri and Spotlight’s default search engine to Bing. Additionally, it enabled ad-blockers while using Safari to browse websites and even went so far as to prevent Google Maps from operating with CarPlay.
3. Amazon vs. Google
Google, too, must be careful about Amazon. People increasingly shop on Amazon rather than relying on Google for store recommendations.
Many reviews, stores, and sellers housed on Amazon have influenced users to choose Amazon above Google.
4. Extreme competition
Innovation is neither simple nor inexpensive. If Google cannot maintain its innovation pace, it risks losing its dominant position and jeopardizing the business.
Google’s biggest competitors are Facebook and Amazon. The two rivals are catching up to Google. Their new features and growing popularity may detract from Google’s dominance.
5. Antitrust controversy
Google has been embroiled in antitrust battles with both US and EU legislators for years. Google has filed to appeal a 5 billion Euro fine issued by EU antitrust officials.
6. Pandemic Uncertainty
The recent events have harmed the operations and profitability of many companies, including Google. It is expected that Google’s United States advertising income will decline by 5.3 percent, the first decline since 2008.
The company’s net advertising income in the United States decreased to $39.58 billion in 2020 from $41.8 billion in 2019. Google’s revenue and profit margins are at risk due to economic instability.
7. Business pages, groups, and pages on Facebook.
Facebook may be Google’s greatest adversary. Over one billion people utilize the social media network monthly.
It includes a marketplace, business pages for sharing information and promotional messages, and advertising to reach specified markets.
Facebook is also a source of news – some people seek advice from friends and strangers in Facebook groups before searching for an answer on Google.
8. Relations with China
Google intended to offer cloud computing services in China but was compelled to abandon the project due to rising geopolitical concerns.
If political tensions spread to other parts of the world, they could impact Google’s global operations.
Final Words on Google SWOT Analysis
Google’s SWOT analysis identifies the company’s strengths, weaknesses, opportunities, and threats. Google’s prominence enables it to earn enormous profits.
Google is not about to disappear anytime soon. It will continue to steal user data, target adverts to individual users, and acquire businesses for billions of dollars.
Google will remain the most popular search engine and the dominant force in smartphones, smart homes, and advertising sectors.
The search engine continues to grow and improve its technology year after year. If Google tackles its vulnerabilities and dangers, no competition will exceed or even compete with this corporation.
The SWOT analysis is an exciting way to have a better understanding of an organization.
However, it’s exceedingly difficult to foresee where the next threat will come from in the corporate landscape or whether the opportunity you’re pursuing will succeed. That is why a solid experimental framework is critical.