SWOT Analysis of Intuit Inc.

Intuit Inc.
Source: intuit.com

Intuit is an American Financial software company based in Mountain View California in the US. It manufactures software for accounting, finance, tax preparation, and related services for small businesses and for individuals. Its flagship products include Turbo Tax, Mint, and Quick books. It seeks to provide a platform that will enable everyone to prosper.

In this article, we cover the SWOT analysis of Intuit Inc. focusing on the strengths, weaknesses, opportunities, and threats. Before jumping into the detailed SWOT analysis of Intuit Inc., let’s have a quick brief summary of the company as below.

Intuit Inc. – At a Glance

NameIntuit Inc
Websitehttps://www.intuit.com/
FoundersScott Cook and Tom Proulx
Chief Executive Officer (C.E.O.)Sasan Goodarzi.
HeadquartersMountain View, California,
Type of CorporationPublic
Year Founded1983
Revenues (2019)$7.7 B
Key Products/ServicesQuickBooks, Turbo Tax, QuickBooks Online, Mint.com, ProConnect, Credit Karma, QuickBooks Commerce
Key CompetitorsMicrosoft, IBM, Oracle, Sage software

Intuit’s Strengths

Strong Technological Capability

Intuit strongly leverages Artificial Intelligence to revolutionize its customer’s experience. The company took time to study the opportunities inherent in AI and strategically applied themselves to maximize each of those opportunities. Intuit has an AI-driven expert platform that has three main areas of operation: knowledge engineering, machine learning, and natural language processing. It through these applications of AI that the company works to deliver its goals of increasing survival rates for small businesses and as well double the household savings rates. The company uses 104 models of machine learning in its production.  

Strong Brand Loyalty and High Level of Customer Satisfaction

Intuit strategy could as well be described as ‘customer-obsessed, it is strongly inclined towards efficient delivery to customers. The company has a keen eye on customer needs, tastes and preferences and over the years the company has struggled to ensure continuous improvement of its services and products with a microscopic focus on being in sync with the customer. This has seen the company explore opportunities upon opportunities and reap competitive advantages key among them being complete trust by its customers and partners in their ecosystem. Given the sensitive nature of personal information and financial data that the company has to handle, it is not a small thing that more than 52 million customers trust Intuit with the stewardship of their critical truths.  

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Strong Innovation; a High Focus on Research and Development

The company has had a successful track in developing new products. As of 2020, the company had more than 400 AI-related patent applications; these enable the company to deliver instant value with a seamless offering. The company is keen on creating a working environment that enhances innovation and creativity among its employees. The company has a system in place of capturing new ideas, experimenting to check for viability, and testing to ensure the ideas are waterproof. Both the founder and the top leadership critical value this process and champion it with great commitment.

Strong Financial Performance and Strong Growth 

Intuit is a member of dividends 500, it is a member of S&P 500 where it came in at position 10 in 2020, Intuit has grown its dividends at the rate of 15% for the last five years, has a huge profit margin of 25%, it boasts of an A+ profitability score. Its revenues and EPS have grown at 14% and 23% respectively for the last three years.  The statistics from 2018 to 2021 of the company’s growth are as follows: 2018 saw an increase of 12.6%, 2019 had 13.19%, 2020 had 29.62% and 2021 had 39.01%. This strong performance fuels the company’s operations and developments as well as an expansion strategy.

Strategic Mergers and Acquisitions

Intuit has in the past made use of strategic mergers and acquisitions particularly in the technology industry to help streamline its operations and to build a strong, trusted, and reliable supplier base.

Strong Brand and Product Portfolio

Over the years, Intuit has invested heavily in its brand portfolio, an investment that makes for the bedrock of the company. Its product portfolio consists of QuickBooks, Turbo Tax, and Mint among other products. Each of these products has a high customer base and therefore has significant revenues.

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International Expansion

The company has a market presence in growing economies like India and China. This gives great room for expansion and as well reduces the company’s dependence on particular markets.

Intuit’s Weaknesses

High Employee Turnover

Compared to other organizations in the industry, Intuit has high attrition rates. The company, therefore, suffers more costs in hiring employees, training and developing them, and also in the retention of top talent.

Seasonality of Intuit’s Tax Business

Tax business is highly seasonal and is limited to the financial periods in the year when businesses need to file their tax returns. This means that for the rest of the year when no major tax activities are taking place, the company’s products are prone to remaining idle. This could reduce the income streams from tax-related products.

Lag in Tackling Challenges Presented by New Entrants

Given Intuit’s industry has low barriers to entry, there are lots of new entrants in the market and Intuit has therefore lost small market niches to these entrants. There is a need for Intuit to up its internal feedback mechanisms directly from the market through its sales team in order to seal up the loopholes.

Intuit’s Opportunities

Consumer Tax and SMB Financial Management Software

Regulations in the consumer tax and SMB provides Intuit with more opportunities to serve customers in this segment.

International Expansion to Increase the Total Addressable Market

Intuit has invested in growing economies like India and China where there is a significant interest in technological developments as high demand for technological products. Intuit has not tapped into the vast global market that has the same needs for financial management as those of the current clients of Intuit. Given the market needs are similar, Intuit may not incur huge expenditure in customizing its products for the different geographies into which the company may choose to venture

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Intuit’s Five Bets for Accelerated Growth

Revolutionizing speed to benefit where the company will reduce any friction across the entire ecosystem connecting people with experts, the company is targeting individuals who logged into the systems but did not complete their return. This statistic stands at 35 million who did not convert into a filler for Turbo tax. The company seeks to have instant expert assistance to convert these visitors to customers. There is huge potential for growth here.

Unlocking smart money decisions, this goal seeks to enhance personal finance management and savings to ensure long-term revenues in the company’s consumer group.

become the center of small business growth and disrupting small businesses in their mid-market. The company aims at growing the core, connecting the ecosystem, and expanding globally. This addressable market is estimated at $250B, it is indeed a huge opportunity for growth.

Virtual Solutions Increasingly Expected and Embraced

With the internet becoming ubiquitous, and with the advent of COVID, more and more businesses are becoming aware of virtual solutions. Intuit already is a force to reckon with in the virtual market. The advent of COVID and growth in internet usage will ensure more opportunities and demand for its software products

Intuit’s Threats

Stiff Competition

There is aggressive competition the financial and business software industry.

Economic Slow Down

With the coming of COVID 19, there is a global threat of recession which may affect the company’s revenues.

Different Federal, State and International Regulations

The differences may raise complexities in Intuit’s taxation as well as the company’s legal liabilities.

Conclusion

Intuit has come out as a strong company attracting investors because of its double-digit growth in revenues and dividends. It is equally attractive to consumers given its customer ‘obsession’ mindset. The company however needs to work on its weaknesses by tightening its feedback mechanisms as well as its innovation culture so as to remain competitive.

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