Google SWOT & PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Investing in moonshots: Innovation is in Goggle’s DNA and this technology giant has not shied away from acquiring YouTube or Android or from rolling out Chrome. Google has always stood undeterred by criticism. Today, these have matured into major platforms for digital video and mobile devices and a safer, popular browser. For the past several years Google has launched high-risk, high-reward projects that they believe in because the Company is convinced that it is “the” fuelling factor for their long-term success. When the world dubbed them crazy for several game changing products and services that have taken the world by storm and they continue with their innovation spirit full swing. Google Glass, Lens, Assisstant, self-driving cars-Waymo are some of the examples of Goolgle’s bets on innovative moonshot projects. Morgan Stanley recently pegged an enterprise value of over $175 billion for the the Waymo autonomous vehicle unit, which is gearing up to launch a paid service soon in the U.S. That will be a remarkable leap for a mmm

2. Cloud Computing: Cloud infrastructure market is one of the most trending and lucrative businesses of the current age. Few of Google’s rivals in the cloud computing space like Microsoft and Amazon have gone really big in this space, whereas Google hasn’t really caught up. The top players in the global public cloud computing space as per revenue are Amazon with its AWS growing at 49% in Q2 of 2018 reported revenues of $6.1 billion, followed by Microsoft’s Azure platform while Google Cloud Platform lags behind both in market penetration and adoption. IBM and Alibaba are also crossing swords with these biggies fighting for competitive market share. Cloud computing is touted to be the future of computing, and Google being an innovative company must invest in growing this technology alongside market reach. Google is already providing storage space options though Google Photos and Google Drive. However, it can also make its move into enterprise market through the cloud computing paradigm.

3. Phenomenal acquisition prowess: Google can gain key competitive advantage over its rivals though acquisitions. Acquisitions empower Google to acquire new skills, technology, knowledge, patents and improve its own products and services allowing faster growth with lesser effort. Alphabet has always conceded that successful mergers and acquisitions will be the key to Google’s future growth prospects. Since 2012, Alphabet (Google until 2015) has acquired 118 companies. From 2012 to 2017, the company has averaged 1.6 acquisitions per month, which is one of the highest business acquisition rates in the world. In Jan, fiscal 2018, Alphabet Inc. acquired smartphone technology startup Redux, which specialized in turning smartphone screens into speakers. Google was apparently learnt to have been trying to integrate this spectacular technology into its smartphone Pixel. An analysis of the company's investments in 2017 revealed that it was the most active investor in that period, outdoing the capital arm of Intel and also its own best customer. Alphabet, Inc. acquired 7 of its own capital-backed startups in fiscal 2017, with Cisco second having acquired 6 of the company's previous investments. Some of these acquisitions blossom into full grown businesses like YouTube, which Google incubates and expands further. Acquisitions generally enhance the breadth and depth of Google’s portfolio, and help them leverage their strengths in engineering and other functional capabilities.

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Threat

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Political

1. EU’s undeclared trade war with Silicon Valley: Google’s android ecosystem is reeling under a $5 billion fine levied against it by the European Commission antitrust regulators in 2018. This is not the only judgment made by the commission. It has passed increasingly severe judgments in the form of tax rulings, restrictions, and legislations on a number of American tech companies with the aim of causing them inconvenience. The difference between the US antitrust law and the European Competition policy also causes problems as the latter includes harm to companies as well as to consumers. A debate is ongoing whether Volkswagen would have suffered similar penalties for its emissions scandal if it had been American. This trade war is likely to have severe consequences on companies like Google who depend greatly upon the EU market.

2. Politically backed regulations in the online search market: Market access in China, Russia and parts of Middle East is often restricted due to political regulations. China has imposed severe regulations that govern the usage of the internet to its 750 million internet users. . These regulations strengthen the positions of applications like Baidu, Alibaba and Tencent. Further issues are created by censorship and human rights issues. Google and Facebook have both seen themselves banned within China in the past. The Google search engine was operational in the country till 2010 but was brought down after the discovery that the government had infiltrated the Gmail accounts of human rights activists within the country.

Economic

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Social

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Technological

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Legal

1. Impact of new regulations such as GDPR: The General Data Protection Regulation (GDPR) implemented in May 2018 has been the most thorough rewrite of data privacy laws in the last 20 years. It mandates companies to have transparent justification for securing and storing private data. Companies immediately fall under its sensor if they are required to track users online. This includes shopping, banking and every other minor reason. Consent needs to be obtained before a company can make use of private data. Due to this Google now has to ask its publishers to either obtain the required consent or absolve it from all legal risks when it tracks users online. Alphabet had seen over 86% of total revenues stemming from advertisements and with the GDPR it faces not only the discontent of its publishers but also the threat that users will refuse to share their private data. Without that crucial data Google will no longer be able to show ads centered around their interests, leading to lesser clicks and subsequently lesser revenue.

Environmental

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