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Google, SWOT Analysis Example

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Words: 1530

SWOT analysis

Introduction

Mountain View, CA-based Google was founded by Larry Page and Sergey Brin in 1998. The company’s origin lies in a search engine called BackRub, the duo built in 1996 that used links to determine the importance of a webpage. The company is now led by co-founder Larry Page who assumed his current responsibilities in April 2011 (Google Inc.). Google now employs more than 30,000 people around the worldIt is difficult to categorize Google in a single industry due to the wide variety of products and services it offers but the most appropriate way to define Google may be that the company is in the business of providing ‘information’ and enriching users’ ‘web experience’. The company’s mission is to organize the world’s information and make it universally accessible and useful (Google Inc.).

Strengths

Google’s first major strength is its organizational culture which encourages bold thinking, innovation, and risk-taking. This may explain why Google has become a hotbed of innovative products. At the same time, the company also believes in having a fun working environment and perks on Google’s campuses around the world are quite famous. Not surprisingly, the company is a regular appearance on Fortune’s Top 100 Companies to work for. Google ensures that it only hires people who embody the company’s values and have the same passion for improving the world through innovation (Hernandez, 2008). Google’s organizational culture is a distinctive competency because organizational culture reflects the norms and expected behaviors within an organization and is shaped by many factors including leadership, employees’ characteristics, and company’s history, all things which are difficult to imitate.

Google’s second major strength is its brand name. Google has become synonymous with web search and the company has built a brand name over more than a decade through a solid track record of unrivaled products and users’ experiences. This is why all new products and services from Google attract widespread interest because users have come to expect innovative and quality products from the Google brand. Google’s brand is a distinctive competency because brand reflects the company’s personality and users’ perceptions among other things. Strong brands are built through years and sometimes decades of hard work and effective leadership which is why companies often invest billions into creating a brand personality. Google’s brand has a distinctive place in consumers’ minds which will be difficult for the competition to replace, at least in the near future.

Weaknesses

Google’s first major weakness is its business model. Even though Google has a history of innovation and has several profitable products including Google search engine and YouTube, the company is focused on too many products and services which may distract it from its core competencies. This may be why Apple’s legendary CEO Steve Jobs advised Google’s Larry Page to focus on fewer products and do them really well (Rosoff, 2011). Google is also a publicly listed company whose major priorities include profit maximization and too many projects result in waste of time and financial resources which could be invested into products and services with greater potential. Thus, Google should determine what its major strengths are and which products and services complement its strengths as well as hold the greatest long-term potential. The review process should help Google narrow the list to 4-6 products and services to which the company should dedicate all of its human and financial resources.

Google’s second major weakness is its size. Microsoft and Yahoo also had amazing starts but as both companies grew in size, innovation suffered and it became more difficult for management to monitor and exert control over the operations. Thus, as Google keeps growing in size, it may face similar issues. One strategy may be to create departments that are responsible for related products and services and are led by departmental heads who report directly to the CEO. This will ensure that each management member is primarily responsible for one area of the business and the management continues to have tight control over operations and strategic direction of the company. In some way, Google’s future business model could mirror GE’s business model.

Opportunities

Google’s first major opportunity is the result of emerging trends in the technological environment which is cloud computing. Cloud computing is being termed as the future of IT (Bylund, 2010) and may even be the future of personal computing. Cloud computing is basically internet-based computing which means the data will primarily exist in the cloud and not in storage compartments of internet-enabled devices. This means one would be able to access data from anywhere and through any internet enabled device. Google is a major player in the internet sector and has great opportunity to grab a major share of both personal and business computing sectors because it already offers many services such as email and work processing software that are cloud-enabled. The company even has a cloud-enabled operating system called Chrome OS (Raphael, 2012).

Google’s second opportunity is in mobile ads due to the emerging consumers’ lifestyle trends. Google is already a major player in the search engine market as well as in the mobile computing through its Android operating system. Smart phones are growing in popularity and tablet devices are stealing market shares from desktop and notebook computers. This means more and more consumers will now conduct searches through their mobile devices, thus, Google is in a unique position to transfer its expertise in search engine-enabled ad platform to mobile computing and create another attractive revenue stream.

Threats

Google’s first major threat is due to changes in consumers’ lifestyles. Social networking has become a major trend and Facebook is the strongest player in social networking area. Facebook now holds a rich amount of users’ data which could turn it into a major Google competitor in the search engine-enabled ad market. As users spend more and more time on social networking websites, they may also start doing more internet searches through social network platforms which may draw Google’s advertisers to Facebook. This will have a negative impact on Google’s AdSense platform through both weaker pricing power as well as smaller client base.

Google’s second major threat comes from the legal environment. Google operates in a number of countries with different legislations and attitudes towards international companies. Google may continue to face unfavorable legislative requirements in countries like China that offer tremendous growth opportunities or will be subject to monopoly accusations like Microsoft due to its grip on the search engine market. These threats will limit growth opportunities for Google and may even subject it to monetary fines.

Conclusion

Google’s strengths include its organizational culture that promotes innovation and risk taking and has helped the company build a strong brand through a solid track record of quality products and services. The company’s weaknesses include its business model which focuses on too many things as well as its size which may be becoming too big for management to effectively monitor the company’s operations. The opportunities include cloud computing and mobile ads as a result of changing consumers’ lifestyles as well as progress in internet technologies. The threats include unfavorable legal environment and the emergence of social networking which could turn Facebook into a serious competitor in the digital ads market.

The company can take several steps to take advantage of opportunities and minimize the impact of threats. First of all, it should eliminate products and services with low prospects and devote more resources to opportunities like cloud computing and mobile ads which are already or about to become multi-billion industries. The company should also work close with governments in other countries to build productive working relationships and continue to monitor political and legal trends in countries in which it operates.

The company has an edge over the competition because of its huge financial resources as well as the fact that it has already made some progress. For example, the U.S. Interior Department chose Onix Networking Corps. earlier this year which uses Google’s cloud-based apps as opposed to Softchoice which uses Microsoft’s cloud-based apps (Marks, 2012). Contracts like these give credibility to Google’s cloud-based services and can be exploited to gain business consumers. Similarly, Google’s Android operating system has the opportunity to develop some position in mobile computing that Microsoft Windows developed in desktop computing. Unlike Apple, Google generously licenses Android operating system to smart phone developers and now Android enjoys 75 percent share of the global smart phone market (Perez, 2012). The dominance of Android operating system provides Google with substantial advantage in exploiting the mobile ads market.

References

Bylund, A. (2010, February 25). How Big Is the Cloud Computing Opportunity? Retrieved from http://www.fool.com/investing/high-growth/2010/02/25/how-big-is-the-cloud-computing-opportunity.aspx

Google Inc. (n.d.). About Google. Retrieved November 12, 2012, from http://www.google.com/about/

Google Inc. (n.d.). Company. Retrieved November 12, 2012, from http://www.google.com/about/company/

Hernandez, C. (2008, July 17). The Organizational Culture that Exists Within Google. Retrieved November 12, 2012, from http://voices.yahoo.com/the-organizational-culture-exists-within-google-1657615.html?cat=3

Marks, J. (2012, May 1). Interior Awards $35 Million Cloud Email Contract to Google Vendor. Retrieved November 12, 2012, from http://www.nextgov.com/cloud-computing/2012/05/interior-awards-35m-cloud-email-contract-google-vendor/55506/

Perez, S. (2012, November 2). IDC: Android Market Share Reached 75% Worldwide In Q3 2012. Retrieved November 12, 2012, from http://techcrunch.com/2012/11/02/idc-android-market-share-reached-75-worldwide-in-q3-2012/

Raphael, J. (2012, June 13). Chrome OS reviewed: The final verdict on Google’s cloud platform. Retrieved November 12, 2012, from http://blogs.computerworld.com/cloud-computing/20517/chrome-os-reviewed-google-cloud-platform

Rosoff, M. (2011, December 3). Steve Jobs Was Right: Google IS Turning Into Microsoft. Retrieved November 12, 2012, from http://www.businessinsider.com/steve-jobs-was-right-google-looks-a-lot-like-microsoft-did-2011-11?op=1

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