SWOT Analysis of Google Inc. and Apple Inc.

SWOT Analysis
Student Name
Institutional Affiliation
SWOT Analysis
(A) GOOGLE INC.
Google LLC is an American multinational company headquartered in Mountain View, California, United States. Founded in September 1998 by Larry Page and Sergey Brin, the company has grown to become a giant in the technology industry. Google specialized in a wide range of Internet-related products. Google.com remains the most visited website across the globe. Over the years, Google has made acquisitions, engaged in partnerships, and made a chain of products beyond the core search engine. While the company’s products continue to find popularity in the world, Google is increasingly facing more problems that are legal and political. For Google to improve itself, it is critical to understand its strengths, weaknesses, opportunities, and threats. This SWOT analysis provides a better understanding of how the company can accomplish its objectives and deal with its challenges.
Strengths
Firstly, Google remains the most popular search engine on the web. While many search engines exist today that offer results based on keywords offer the best relevant results. There is no doubt that Google has become the most used search engine in the world. Google has dominated the search engine market with a current market share of 87.35%. The major competitor, Microsoft’s Bing accounts for 5.53% while Chinese search engine Baidu’s has a share of 0.7% (Statista, 2020a). Secondly, Google has a strong financial position. According to MarketLine (2013), this is because of increased cash from operations. In 2019, Google generated $134.81 billion from advertising. The firm generates online advertising revenue through the Google Ads platform (Statista, 2020b). The majority of Google’s total revenue came from advertising. In the most recent fiscal period, advertising accounted for 70.9% of the company’s revenues. Thirdly, Google is a household name all over the world. The company has some of the most popular products on the Internet like YouTube, Google Maps, Chrome, Android, and Gmail among others. According to data from Statista (2020c), Google is the third leading brand name in the globe as of 2020, with a value of about $160 billion. Google’s strong brand name is critical in ensuring that its products and services are less substitutable, hence allowing the company to generate higher returns while mitigating risks.
Weaknesses
Firstly, Google relies on a single source of revenue. By earning most of its revenue from advertising, the company is vulnerable to changing market trends. As more companies join the online advertising market, the company risks less income in the future. In the case of a dip in the advertising revenues, this would cost the company dearly. Secondly, the company faces criticism due to the censorship of search results, patent infringement, and the use of anti-competitive practices (Patterson, 2012). Such practices have adverse effects on the long-term reputation of the company. For instance, the use of anti-competitive practices has seen Google face harsh disciplinary measures in the European Union (Mendoza, 2016). Additionally, some of Google’s products have performed poorly in the market. For instance, Google+ has not succeeded as other social networking sites like WhatsApp, Twitter, and Facebook. While Google is the leading company in online search, not all its products are doing well as expected. Furthermore, Google faces patent litigations. The company faces some lawsuits due to patent infringement. As a result of the many lawsuits, the company spends more money settling the disputes. For instance, Google v. Oracle America is one of the cases the company is facing (Menell, 2017). Such lawsuits have adverse effects on the financial power of the company and reduce the firm’s value.
Opportunities
Google’s strong financial capability can be used to diversity in more areas. Overdependence on online advertising as the major source of revenue can be addressed by venturing into more areas outside online search. The company has recently diversified into more areas like driverless cars and other ambitious products (Lari, Douma & Onyiah, 2015). While a majority of the products do not currently generate revenue, the success of one or more products in the future is likely to bring more revenue to the company. Google should continue with the trend and venture into areas outside its core business of search. Furthermore, Google can use its financial position to make more acquisitions. The successful purchase of YouTube and Android demonstrates the huge potential in acquisitions. Moreover, there is a huge opportunity for Google to engage in the cloud computing business. Cloud computing can boost Google’s revenues in the future. Additionally, Google can benefit from the growing smartphone market. The strength of Android and the growing need for lower-cost phones is a huge opportunity for the company (MarketLine, 2013).
Threats
The online space is competitive with companies like Amazon, Facebook, and Apple threatening the earnings of Google from advertising. For instance, Facebook has about 2.5 billion active users (Statista 4, 2020d). Such a large number of users have seen many companies preferring Facebook to Google for advertising campaigns. Similarly, other clients go directly to Amazon to shop, which minimizes the number of search queries that the company can process. Additionally, there is no long-term barrier to the search business. In the coming years, there is a possibility of more competitors emerging with similar services the company offers. If such services have better interfaces, then Google is likely to lose a larger portion of its market. Further, the scale of the company threatens changes to its search algorithm. Due to its scale, Google may find it challenging to make changes to its algorithms and database architecture (Sivarajah, Kamal, Irani & Weerakkody, 2017). Lastly, if Google decided to merge with another already established company, it could significantly lose its earned brand name.
Conclusively, the SWOT analysis of Google presents a better picture of the challenges facing the company as well as the opportunities available. The analysis is critical in enabling the stakeholders to make the decisions that will enable the company to remain a leader in the technology industry. As noted, Google currently generates most of its revenue from an online search. There is a need to diversify and create other revenue models. This will safeguard the company from losing revenue in the future on the case the search business becomes more competitive.
References
Lari, A., Douma, F., & Onyiah, I. (2015). Self-driving vehicles and policy implications: Current status of autonomous vehicle development and minnesota policy implications. Minn. JL Sci. & Tech., 16, 735.
MarketLine. (2013). Google Inc., SWOT analysis. MarketLine Advantage, September 2013. Retrieved from
Mendoza, D. K. (2016). Antitrust in the new economy case Google Inc. Against economic competition on web. Mexican law review, 8(2), 79-113.
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