SWOT Analysis of Google
- Google: Number 1 Search Engine
Google is the undisputed leader in the search engine market. Apart from search engines, it dominates the web in several more areas. Recently, it faced anti-competition lawsuits in Europe. EU had decided to check its attempts to monopolize the search engine market. It charged Google with antitrust violations based on Google’s preference for its own shopping results over competitors. However, the search engine giant has flourished due to its excellent technology and management practices. In terms of management and especially human resources, Google is known as the best. For several consecutive years, it has been rated the best employer. Its android OS and online advertising are its main sources of revenue. Apart from that, its Chrome browser is the leader among web browsers. The business model of Google is based purely on innovation. It has helped the tech-giant acquire a very large market share in a short period. Presented below are Google’s strengths, weaknesses, opportunities and threats (SWOT):
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- Largest market share in search engine market.
- Dominant share in online advertising
- Dominant share in mobile operating systems
- Chrome browser the most used and popular browser.
- Very high brand awareness
Google holds the largest market share in the search engine market. Its name has become synonymous to online search. According to industry reports, Google holds more than 70% of the global search engine market. For years, it has continued to focus upon making its search engine as user friendly as possible. A large part of its revenue comes from online advertising. Together, Google and Facebook earned 64% of the entire online ad revenue in 2015. Google’s revenue from online ads was $30 billion. However, that of Facebook was $8 billion. It shows Google earns around 50 percent of the entire ad revenue from online sources.
Google also holds a major market share in Android operating systems. Its Android OS is used by several brands. Its Chrome browser is the most popular browser followed by Firefox and others. However, the biggest strength of Google is its innovative approach. It is innovative both in technology and management practices. The company has been named the best employer continuously for several years. Its employees receive the best perks in the entire industry. There are thousands of applications received for each open post at Google. Still, Google hires none but only the best. Overall, Google has emerged as the biggest brand in the world wide web.
- Lagging in social networking
- Heavy dependence on ad revenue
Google’s ‘Google plus’ is a lot behind Facebook or twitter. According to industry sources while the number of visitors on Facebook, twitter, Pinterest and YouTube is growing, on Google plus it is shrinking. Google plus is not as successful as the other brands in terms of number of visitors and followers. Apart from everything, Google depends heavily on its online advertising for revenue. Ad revenue is its only major source of income. In this area, it is facing heavy competition in mobile ads from Facebook. Google has failed to make a major mark like Twitter or Facebook in social media. Twitter or Facebook have superior features compared to Google Plus. It is why Google plus failed to engage visitors like the other social media sites.
- Product diversification
- Expanding into physical businesses
Google has several opportunities before it. It can find other options for revenue than online advertising. Technology is a vast area and Google can extend its presence into other fields. Other major fields like medicines, aviation, healthcare, etc can also provide excellent opportunities. In any of these areas, success can bring new sources of revenue for Google. Apart from these, it could expand into physical areas like electronics or other businesses including retail and even online retail. Overall, diversifying into other businesses can be highly profitable for it. Google’s position in online advertising is strong. Still, it must consider expanding into other areas to tap into new sources of revenue. However, it would have to be cautious and do so without losing focus of its core businesses.
- Increasing competition from Facebook
- Disruptive challenges from Amazon and Apple
- Rise of local search Engines
Google’s main threat is the rising competition. Apple, Microsoft, and Facebook are its primary competitors. Its share in mobile ads is increasingly under threat by Facebook. Facebook’s ad revenue from mobile advertisements has seen significant increase recently. At several points, Facebook’s performance in mobile ads has been better than Google. Apple is also trying to reduce the presence of Google in its ecosystem. Amazon’s product searches could also prove a threat for Google’s shopping ads. Google has generally managed the threat of competition well by acquiring a very large market share in search engines. However, the threat is rising unexpectedly in some areas. Facebook is rising fast. Other social media players have also shown their might against Google. Rise of local search engines like Baidu and Yandex has threatened its market share in China and Russia. China is a big market and Baidu holds 70% share there.
Overall, while Google has emerged as a powerful brand in the web world, it cannot ignore the threat from competition. Its presence in particular areas including online advertising has remained generally very good. However, it should consider diversifying into other businesses to reduce its dependence on ad revenue. The threat from Facebook in mobile ads is rising. Google could easily mitigate some of the competitive threat by extending its presence into other technological businesses. However, Google is still a mighty brand. Its challenge is still too big for its competitors. In several areas the competitors are struggling to steal the limelight from the search giant. Nevertheless, Google should not try to sit easy.
[‘SWOT’ is an acronym for Strengths, weaknesses, opportunities and threats. It is a powerful strategic management tool that can help to know one’s important strengths and weaknesses and to exploit the opportunities. It can also help counter the threats. Strengths and weaknesses are internal factors and opportunities and threats external. So basically, SWOT is a tool designed to help you reduce your weaknesses and counter the threats. This can improve the business’ chances of success. Companies conduct a SWOT before they embark on a new strategy or before they make an important business move like investing in a new project.]