Alphabet (Google) SWOT & PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Investing in innovation and R&D projects: Innovation has been in Goggle’s DNA and this technology giant has never shied away from 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 acquiring YouTube and Android and when for rolling out Chrome, Google stood undeterred by the 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 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, Assistant, self-driving cars-Waymo are some of the examples of Google’s bets on innovative moonshot projects. Morgan Stanley recently pegged an enterprise value of over $175 billion for 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 business that’s mostly been an expensive R&D project for a decade.

2. Expanding market-share in cloud computing space: 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 having a $46 billion annual revenue run rate as of Dec 2020, followed by Microsoft’s Azure platform while Google Cloud Platform lags 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.

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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. 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 on their interests, leading to lesser clicks and subsequently lesser revenue.

2. Impact of increased regulatory scrutiny as well as changes in regulatory conditions: The companies constantly find themselves in a constant battle between impending regulatory deadlines and non-compliance risk. The technology industry faces regulatory scrutiny and other proceedings. In 2020, Attorneys General filed an antitrust complaint against Google for violating antitrust laws related to search and search advertising. Additionally, an antitrust complaint was filed in the United States and around the world for the violation of U.S antitrust laws and state deceptive trade laws related to advertising technology. Various other regulatory agencies and governmental bodies around the world continuously review Google’s product services and their compliance with the laws and regulations. These laws and regulations have a significant effect on the business and reputation of the company resulting in penalties and fines which impacts the financial condition of the company.

Environmental

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