2.1.2 Liquidity
Google Inc. has minimal liabilities mainly related to payables, short-term debt, accrued expenses, and securities payables. It was able to cover its current liabilities obligations using current assets at a rate of 5.90 times in 2014. The measurement reduced to 4.22 times coverage in 2012 as the level of short-term debt and accrued expenses/liabilities rose substantially.
The most liquid measurement of quick ratio was also above 1:1 at 5.90 times coverage in 2011 and 4.18 times coverage in 2012. Current and quick ratios were similar in 2011 since it did not hold any inventories. The acquisition of Motorola Mobility in 2012 introduced inventories to company at a small level of $505 million compared to the current assets of $60,454 …show more content…
has been largely driven by phenomenal success of the iPhone. It is one of the reasons that prompted Google Inc. to acquire Motorola Mobility. The net margins at Apple Inc. are also extremely high for a device manufacturer with 2011 and 2012 net margins at 23.95% and 26.67% respectively.
2.2 SWOT Analysis
2.2.1 Strengths
Google Inc. has a developed a strongest reputation especially with respect to search and advertising. It has one the most recognizable global brands which has given it a market leadership position in that category. The company is financially strong with marketable securities and cash and cash equivalents totaling more than $48 billion in 2012.
The firm’s revenue growth is solid with year-over-year growth of 32.7% in 2012. It is the dominant market leader in the search market with 66.7% share. The company’s product portfolio is diversified to include video, cloud computing, and most recently mobile devices. It is also present in more than 150 markets globally.
2.2.2 Weaknesses
The recent acquisition has brought new challenges to the company with respect to increase in R&D expenditure which has affected margins. Cash flows have been strained and despite the robust revenue growth, respective net income has not followed suit. The cost of revenues from Motorola was $3,458 million compared to revenue of $4.1 …show more content…
The low end of the market is virtually uncompetitive with the proliferation of Chinese and India manufacturers which have flooded the market. In effect, the premium market is more desirable as it will have supporting and it does not require massive margins.
Google Inc. needs to look at the current cost structure of Motorola Mobility and make the necessary adjustments such as reducing the workforce and devices that are offered. The firm can then develop a product that is targeted at competing with the iPhone. Although the Motorola X has not received positive reviews, it can be repositioned.
It is approach has been akin to deliberate sabotage as it has avoided ‘antagonizing’ Android hardware partners. However, the size of the Smartphone market is huge and increasing the market share of Motorola devices is unlikely to hurt the partnership. The company can follow a similar model as Apple Inc. by developing design and concepts in the United States.
It can then use large scale manufacturers such as Hon Hai Precision Industry Ltd (Foxconn) to actually produce the devices. The approach has been successful done by Apple Inc. and Google can succeed by using a similar approach. It will be able to develop competencies and capabilities through minor acquisitions that support hardware
Google Inc. has minimal liabilities mainly related to payables, short-term debt, accrued expenses, and securities payables. It was able to cover its current liabilities obligations using current assets at a rate of 5.90 times in 2014. The measurement reduced to 4.22 times coverage in 2012 as the level of short-term debt and accrued expenses/liabilities rose substantially.
The most liquid measurement of quick ratio was also above 1:1 at 5.90 times coverage in 2011 and 4.18 times coverage in 2012. Current and quick ratios were similar in 2011 since it did not hold any inventories. The acquisition of Motorola Mobility in 2012 introduced inventories to company at a small level of $505 million compared to the current assets of $60,454 …show more content…
has been largely driven by phenomenal success of the iPhone. It is one of the reasons that prompted Google Inc. to acquire Motorola Mobility. The net margins at Apple Inc. are also extremely high for a device manufacturer with 2011 and 2012 net margins at 23.95% and 26.67% respectively.
2.2 SWOT Analysis
2.2.1 Strengths
Google Inc. has a developed a strongest reputation especially with respect to search and advertising. It has one the most recognizable global brands which has given it a market leadership position in that category. The company is financially strong with marketable securities and cash and cash equivalents totaling more than $48 billion in 2012.
The firm’s revenue growth is solid with year-over-year growth of 32.7% in 2012. It is the dominant market leader in the search market with 66.7% share. The company’s product portfolio is diversified to include video, cloud computing, and most recently mobile devices. It is also present in more than 150 markets globally.
2.2.2 Weaknesses
The recent acquisition has brought new challenges to the company with respect to increase in R&D expenditure which has affected margins. Cash flows have been strained and despite the robust revenue growth, respective net income has not followed suit. The cost of revenues from Motorola was $3,458 million compared to revenue of $4.1 …show more content…
The low end of the market is virtually uncompetitive with the proliferation of Chinese and India manufacturers which have flooded the market. In effect, the premium market is more desirable as it will have supporting and it does not require massive margins.
Google Inc. needs to look at the current cost structure of Motorola Mobility and make the necessary adjustments such as reducing the workforce and devices that are offered. The firm can then develop a product that is targeted at competing with the iPhone. Although the Motorola X has not received positive reviews, it can be repositioned.
It is approach has been akin to deliberate sabotage as it has avoided ‘antagonizing’ Android hardware partners. However, the size of the Smartphone market is huge and increasing the market share of Motorola devices is unlikely to hurt the partnership. The company can follow a similar model as Apple Inc. by developing design and concepts in the United States.
It can then use large scale manufacturers such as Hon Hai Precision Industry Ltd (Foxconn) to actually produce the devices. The approach has been successful done by Apple Inc. and Google can succeed by using a similar approach. It will be able to develop competencies and capabilities through minor acquisitions that support hardware