Applied Materials SWOT and PESTLE Analysis

Strength

1. Globally spread business tentacles creating strong brand image: To serve their international customer base, Applied Materials has offices and other facilities located in Canada, China, various countries in Europe, Japan, North America (principally the United States), Israel, China, Italy, India, Korea, Southeast Asia and Taiwan. It is spread worldwide in 93 locations across 19 countries and has an employee base of more than 24000 as of 2020. It is headquartered in California’s Silicon Valley. Such a strong global presence allows it to serve its customers not just better but also very promptly. This enhances the quality of deliverable and helps establish a strong brand name. This also casts a positive impact on an increased level of customer base as well as employee base. These new pools of employees have unique knowledge, skills, and attitudes. It ensures increased revenues from the international customers when at times the market is saturated domestically. Hence a strong global presence facilitates an overall brand image of the organisation and makes it stand out.

2. Strong and Diversified product portfolio: Over the years, Applied Materials have heavily invested to create a strong as well as diversified product portfolio. It ranges from Advanced display, Advanced Manufacturing, Advanced Materials, Artificial Intelligence and Big Data, Energy Technologies, Life Sciences to Semiconductor Technology. The Company also provides additional facilities like consulting, spare parts, services, automation software, upgrades and legacy equipment to improve the performance and productivity of their customer firms. Such a wide range of products are powered by technologies that are widely proven and deeply mature in high volume factories worldwide. The revenue generated from one sector can be utilized in another considering the single operational backbone ensuring smooth operation for a longer period of time. Also, with the changing economy, where every investment that we make comes with risk, diversification of portfolio not only reduces the risk but also results in balancing of the risk. It ensures optimum utilisation of the resources. They are pioneers in bringing together processes, procedures, products and services in such rare ways as to turn the possibilities into realities.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

1. Importance of Patents and Licenses in maintaining Applied's competitive stance: Besides research, development, engineering, manufacturing, and marketing capabilities, preserving patent and licenses play a significant role in maintaining Applied's competitive position. Thus, Applied Materials focuses on protecting its technology assets by enforcing appropriate patents and intellectual property rights. Particularly for all the significant inventions, the company is habitual of filing patents in the US and other countries. As of 2020 Applied has nearly 13,330 patents globally. Along with patents Applied also possess other intellectual property like trademarks, know-how, trade secrets, and copyrights.

2. Impact of antitrust agencies and regulatory snags on mergers and acquisitions: The antitrust agencies have been on a roll in obstructing the mergers and acquisitions that apparently are bad for the competition. Applied was trapped in a similar situation in 2015 when the U.S based semiconductor equipment manufacturer had to call off its merger with the Japanese rival Tokyo Electron due to regulatory concerns and objections from the U.S. Department of Justice. The authority claimed that the proposals for a combined business of the two leading semiconductor manufacturing equipment companies were not good enough to replace the competition lost from a merger. Post this objection the companies decided to scrap the deal heading to a decline in the share prices for both Applied Materials and Tokyo Electron.

Environmental

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