SWOT Analysis of Google: Strengths & Weaknesses 2021 | Swot Analysis Template (2024)

Company Overview:

In 1988, Sergey Brin and Larry Page founded Google in California. In 2015, Google’s restructuring created Alphabet, a technology conglomerate and Google became its subsidiary. Google internet-related service portfolio includes three segments that are; (1) Google services (search engine, Chrome, Android, Google Play, Google Maps, and Youtube), (2) Google cloud (infrastructure and Google workplace), and (3) other Bets (combination of multiple segments) (Google, 2021). Google’s brand value is $191 Billion (Statista, 2021). It is ranked Google 3^rd in 25 most valuable brands worldwide and 3^rd in Global 500 (SyncForce).

Google Strengths 2021:

• Powerful Google ecosystem.

  Collins (2021) appraised that Google has developed a powerful products and services ecosystem that integrates all products and services, as shown in the diagram below. Many of Google products and services are complementary and interdependent to each other to sustain competitiveness. For example, Google Chrome (market share of 65%) directs customers to company bundle services (Jaffrey, 2021).

• Persistent products and services innovation.

  Google has a strong culture for new product development and market introduction to proliferation customer choices. For instance, Google developed ‘AlphaFold’ for the protein folding problem, which solved 50 years of issues in biology. Likewise, the company has developed Verily’s for COVID-19 Testing automation of frontline support and Waymo for the autonomous vehicle segment (Alphabet, 2021).

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• Diversified revenues segments.

  In 2020, Google generates a total of $182.5 Billion revenues through multiple segments, including search engine ($104 Billion), Youtube Ads ($19.7 Billion), Google member services ($23 Billion), Google others ($21.7 Billion) and Google Cloud ($13 Billion)

• Android — mobile market leadership.

  Dautovic (2021) discussed that the Android mobile system had made smartphones a global phenomenon. Samsung, Vivo, Lenovo utilise the Google operating system and OPPS, significant players in the mobile devices market. Google’s market share is 72% compared to the Apple market share of 29%. There are no other significant competitors, as shown in the diagram below.

• Domination in search engine market.

  Google dominates in search engine market with 87% of online search volume. Google processes 40K search queries per second and 3.5 Billion searches per day. By comparison, Bing has a small share of 6.80%, and yahoo share is 2.75% (Proceed Innovative, 2021).

Google Weaknesses 2021:

• Revenues concentration in the U.S.

  Nearly half of Google’s total revenues are generated in the U.S. The global revenues share was 47% from the U.S. ($85 Billion), 30% ($55 Billion) from Europe, the Middle East, and Africa (EMEA), 18% ($32 Billion) from Asia-Pacific (APAC), and merely 5% ($0.95 Billion) from other America.

• Failure in the social media landscape.

  Google entered the social media market with Google+ and Shoelace to compete against social media giants such as Facebook, Snapchat and Twitter. Shah (2021) highlighted that the company had been unsuccessful, forcing them to shut down the platforms altogether.

• Chrome security risks.

  According to Forbes (2021), Google chrome has persistent security issues and software experiences vulnerabilities and the hacker can exploit the program. In 2021, Google issued multiple upgrades warning in two months to tackle security threats discovered in chrome.

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• Reliance on advertising revenues.

  Since 2017, Google has generated more than 80% of its revenues from online advertising. Advertising is competitive and cyclical depends on macroeconomic factors. For example, the revenues from Travel ads in the U.S. dropped 6% during the Covid-19 lockdowns (Next Media, 2021).

• Non-profitable segments.

  Google service is the only profitable segment with $43 Billion in profits in 2018, which increased to $48.9 Billion in 2019 and $54.4 Billion in 2020. However, the Google cloud and Other Bets are at losses and yet to make a profit. In 2020, the loss for Google cloud was $5.6 billion, and Other Bets loss was $4.4 Billion, reducing the company’s overall profitability.

Google Opportunities 2021:

• Internet of Things (IoT) and 5G.

  Sinha (2021) estimates that globally there will be 27 Billion IoT devices by 2025, creating a massive network of interconnected devices. As shown in the diagram below, Google has an opportunity in the IoT market from home devices, fleet management, traffic safety, intelligent grids industries, and many other industries. Google can develop products to support IoT for security, safety and decision-making for personal and business contexts (Forbes, 2021).

• Cyber security market.

  Hill & Swinhoe (2021)pointed out that the significant cyber security attacks on Yahoo, Equifax, ACER, Marriott Hotel, Microsoft and Facebook highlight the opportunity to expand cyber security. For Google, the cyber security landscape includes systems and applications for protection against phishing, malware and ransomware attacks.

• Quantum computing.

  Quince (2021) estimates that the global quantum computing market will be $37 Billion by 2030 with a CAGR of 25.40%. For Google, the quantum computing opportunity includes developing applications in fraud detection, pandemic management, high-frequency trade management, banking and finance, and credit management.

Google Threats 2021:

• Board mobile devices landscape.

  Kamau (2021) stated thatpeople use different devices and software such as computers, tablets, mobile phones, gaming consoles, smart devices, automobiles to access the internet. In such context, Google products have less popularity and compatibility on some interfaces. For example, iOS and Huawei have their ecosystem and Google products have limited functionality.

• Low-quality content and black-hat SEO.

  The content on the Google platform has risks such as content farms, spam and low quality. The violation of community guidelines and terms affect Google product reputation. For example, bad actors host fake websites and product pages to fraudulently generate revenues, marketed through Google, otherwise without traffic (Ghosh, 2021). Google also faces the challenges of black-hat SEO processes in which a large quantity of low-quality content is used to improve search engine ranking.

• Antitrust and Lawsuits.

  Nylen (2021) appraised that Google constantly faces antitrust lawsuit challenges that affect the company’s operations and reputation. For example, in October 2020, 36 U.S. states and the U.S. Department of Justice filed an antitrust complaint against Google in Texas, alleging the company has deceptive trade practices in advertising technology. Richter (2021) stated that European Commission had imposed massive fines on Google for antitrust violations, as shown in the diagram below.

• Regional search engines leadership.

  Newton (2021) analysed that some regional search engines such as Yandex, Baidu and Excite (local market leaders in Russia, China and Japan) poses threats for Google. With a large user base and the increasing influence of these countries in the global political and economic landscape, Google needs to manage the search market efficiently.

• Regulatory pressure.

  According to Fortune (2021), Google faces probes from the U.S. federal law agency, Department of Justice (DOJ) and Federal Trade Commission (FTC) investigation. Joe Biden administration has appointed ‘Tim Wu’ as National Economic Assistant, a critic of Big Tech firms like Google. Australian antitrust watchdog has joined regulators to curb Google power because it hurts the market for advertisers, publishers and consumers (Reuters, 2021).

SWOT Analysis ofGoogle Conclusion:

Google’s strengths include a solid financial position, robust ecosystem, and search engine market leadership. The challenges are overdependence on advertising revenues, non-profitable business segments, low-quality content, and a broad device landscape. Nonetheless, Google has extensive resources and dynamic capabilities to overcome business challenges and exploit new business opportunities for greater success in the internet-related services industry.

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References:

1. Alphabet (2021). Annual Report.
2. Collins, Katie (2021). Apple and Google mobile ecosystem dominance under scrutiny by UK antitrust regulator.
3. Dautovic, G (2021). Android Market Share: The Fight for Mobile Leadership.
4. Forbes (2021). Google Confirms Chrome’s 12th & 13th Zero-Day Hacks In 2021.
5. Forbes (2021). IoT For 5G Could Be Next Opportunity.
6. Fortune (2021). Google’s ad business faces heat as DOJ extends Trump-era probe.
7. Ghosh, Shreoshe (2021). Go From Low Quality To High On Google’s Ranking Order.
8. Google (2021). About Google.
9. GOV.UK (2021). Ecosystems of Google and Facebook.
10. Hill, Michael and Dan Swinhoe (2021). The 15 biggest data breaches of the 21st century.
11. Jaffrey, Duncan (2021). Just where is Google’s ecosystem up to?
12. Kamau, Daniel (2021). Types of Mobile Computer Devices.
13. Newton, Erik (2021). International Search Engines You Should Optimize For. 2021. 2021.
14. Next Media (2021). Google’s Reliance On Travel Ads Dents US Ad Revenue.
15. Nylen, Leah (2021). 36 states, D.C. sue Google for alleged antitrust violations in its Android app store.
16. Proceed Innovative (2021) . Google Dominates Worldwide Search Engine Market Share.
17. Quince (2021). Global Quantum Computing Market Size to Grow at a CAGR of 25.40% from 2021 to 2030.
18. Reuters (2021). Antitrust — Google dominance Australia Online Advertising.
19. Richter, Felix (2021). Google Hit With Another Antitrust Fine in Europe.
20. Shah, Sumeert (2021). Why did Google Plus Fail?
21. Sinha, Satyajit (2021). State of IoT 2021: Number of connected IoT devices growing 9% to 12.3 billion globally, cellular IoT now surpassing 2 billion.
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23. Statista (2021). Mobile operaating systems market share . 2021. 2021.
24. SyncForce (2021). Google — Rankings per brand.