Qualcomm is one of the leading companies in the telecom service sector. The company deals with wireless semiconductors and software and owns patents essential to 4G and 5G mobile communications. We are yet to see the impact of the recent change of guard at the helm of Qualcomm from Steve Mollenkopf, who has been CEO for more than two decades, to Cristiano Amon. However, this change comes when there is so much hype around the 5G network, which is a huge strength for the company.
SWOT analysis is a simple strategic analytical tool in giving business insights to a company on just how far the company makes use of its internal core strengths to overcome its weaknesses and then take advantage of the opportunities in the market. It analyzes the company’s internal strengths and capabilities, its weaknesses, the opportunities that are within the company’s environment, and as well the threats that face the company.
Qualcomm has a lot to gain by undertaking a SWOT analysis of the company. It is important to note that SWOT analysis is more beneficial if done on a continuous basis given the market is very dynamic, and companies have the burden to keep up pace with the changing environments. Therefore, a well-done SWOT analysis is important in informing a company’s competitive strategy and even allocation of the company’s scarce resources.
Qualcomm – At a Glance
| Name | Qualcomm |
| Website | www.qualcomm.com |
| Founders | Irwin Jacobs, Andrew Viterbi, Adelia A Coffman, Andrew Cohen, Harvey White, Klein Gilhousen, Franklin Antonio |
| Chief Executive Officer (C.E.O.) | Cristiano Amon |
| Headquarters | San Diego |
| Type of Corporation | Public |
| Year Founded | July 1985; 36 years ago |
| Revenues (2019) | $23,531 (FY 2021) |
| Key Products/Services | Semiconductors and Other Electronic Components |
| Key Competitors | HiSilicon. Nvidia, Samsung Electronics, Qualcomm Technologies, Media Tek, Intel, NXP IBM, Hewlett-Packard, Dell, Google, Broadcom, Texas Instruments, and Nokia |
| Slogan | Life. Connected with technologies |
Qualcomm’s Strengths
Strong Brand and Market Recognition
Qualcomm is a strong brand in the market with high recognition over the years. In this article, we focus on the recognition and awards earned in 2021. The company was rated 5th position in America’s Most Responsible Companies by Newsweek. In addition, it was position 42 among Top 50 Large-Cap Value Creators by Boston Consulting Group, position 37 among BrandZ Top 100 Most Valuable Global Brands by Kantar, position 64 in top 100 brands ranked by SyncForce, ranked position 124 in Fortune 500 and featured in World’s most admired companies. Strong market recognition means customers easily recognize the brand and is indicative of trust in the brand. This will ensure increased customer loyalty towards the brand hence cushions the company against substitutes.
Innovation
Qualcomm is a strong innovator in the industry, a strength that has driven the creation of new products that sufficiently satisfy customer’s needs. Qualcomm, therefore, has more than 12,600 US patents to its name, as well as pending patent applications for CDMA and other related technologies. Innovation is a critical strength for the company as it helps shortens the product’s lead time, ensures sustainability in the market, increases a brand’s longevity in the market, and boosts the brand’s morale and productivity.
Huge Customer Base
The brand has a huge installed customer base with long-term contracts for the company. This secures the foreseeable future of the brand for its operations and profitability. This strength is critical in reducing the risk of operation for the company and gives the company more time to serve the known needs of the existing customers and source for more customers to join the company’s customer base.
Strategic Alliances
Mergers, acquisitions, partnerships, and other strategic alliances are critical in a company’s expansion strategy. It describes both the organic and in-organic growth of the company activities undertaken by the company to enable a competitive advantage. Qualcomm has had a successful track record of integrating complimentary firms that are strategic to its mission.
In 2021, they acquired Nuvia. Some of the company’s partnerships include Accenture, Itron, Green Hill, The Stanford group, and Tata Elxsi, among others. In addition, the company has technology partners and channel partners, among others. These strategic partnerships and alliances are critical for ensuring completeness with a competitive edge of the company’s products and services.
High Customer Satisfaction
Qualcomm has recorded relatively high ratings from consumer review sites. The company had a 4.8 rating for 1197, with similar sites having similar ratings. Qualcomm has high regard for customer satisfaction and therefore has dedicated staff to ensure high customer satisfaction. High customer satisfaction is a strength that will ensure more brand popularity, reduced marketing expenses, increased sales revenues, and more customer loyalty.
Qualcomm’s Weaknesses
Declining Market Share
Qualcomm has had its market share on a downward trend over the past years. In the smartphone application processors market, the company has lost its market share from 52% in 2014 to 31% in 2021. MediaTek, Qualcomm’s competitor, is said to control 37% of the global smartphone application processor as well as in system-on-ship (SoC) chipset shipments.
Below are some of the reasons that led to the decline in Qualcomm’s market share. This includes COVID that saw increased restrictions on travel and lockdown, which largely affected distribution networks.
Another reason is the increase in competition. Qualcomm faces increased competition from companies like Huawei, MediaTek, and HiSilicon among others. In addition, the wars between China and the US also contributed to this loss. Therefore, Qualcomm needs to strengthen its competitive strategy to ensure a recapture of its market share.
Increased Risk Levels
Gaps in the quality standards of the company’s products and services could increase the risk levels for the company. For instance, research in 2020 identifies more than 400 pieces of vulnerable codes found inside Qualcomm’s Snapdragon digital signal processor chips that are used to power millions of smartphones from leading manufacturers like Samsung, LG, and Google others. These vulnerabilities make it easier for attackers to compromise the security of mobile phone user’s information and could jeopardize the market prosperity of Qualcomm. There is every need for the company to tighten its security controls to ensure optimum quality and security of its products.
Qualcomm’s Opportunities
Expected Growth in the Industry
Analysts predict that the global Smartphone Application Processor market will grow from USD 12260 million in 2020 to USD 19310 million by the end of 2027. Some of the factors that have fueled this growth include increased demand for smartphone application processors in the market due to increased use of the internet and smartphones.
Qualcomm needs to invest more in increased market research to ensure early detection of gaps in the market so as to take early advantage of meeting customer needs.
COVID 19
While the pandemic called for an increased cost of operation that caused a decline in the market for Qualcomm’s products and services, markets have started opening up due to increased immunization. This will cause a surge in the market for Qualcomm’s products. Additionally, the pandemic has caused a shift in the work environment calling for more virtual collaborations in the workplace. This will lead to an increased need for Qualcomm’s products.
Qualcomm’s Threats
Increased Competition
The increased threat of competition continuously taking over the company’s market share is a great concern that the company needs to institute competitive strategies. That will lock in customers and at the same time ensure acquisition and retention of new customers to help increase the brand’s market share.
Political Instabilities
The war between China and the US has already adversely affected Qualcomm’s market share. Such adverse effects need to be curbed before any further detrimental effects occur in the market for Qualcomm. More strategies need to be put in place to neutralize the effects of a similar occurrence impacting the organization.
Liability from Litigation
Given the possibility of risks arising from gaps in the security of the company’s products, the company has an increased threat of paying up litigation in case of liability. This could compromise the company’s profitability.
Disruptor Technologies from Competitors
Disruptor technologies pose the threat of rendering existing technologies obsolete. This is particularly true in the event such technologies are invented outside of the Qualcomm company or any entity that Qualcomm may not find a strategic advantage with.
Conclusion
Qualcomm has enjoyed market leadership for quite some time now. This gives the company a competitive advantage in the market. However, the company needs to be more strategic to cushion itself against the loss of more market share and acquire more market share.
