Detailed SWOT Analysis of Adobe – An American Multinational Computer Software Company

Quick Stats on Adobe

Founder	John Warnock and Charles Geschke
Year Founded	1982
Origin	San Jose, California, USA
No. of Employees	22,516+
Company Type	Public
Market Cap	$ 315.02 Billion (2021)
Annual Revenue	$ 12.87 Billion (2020)
Net Income/ Profit	$ 5.26 Billion (2020)

 

(Adobe Range of Softwares, Source: Editmicro) 

Products by Adobe

The premium software company has been actively taking digital marketing by the storm by launching products such as:

• Adobe Photoshop
• Adobe Illustrator
• Adobe After Effects
• Adobe Premiere Pro
• Adobe Lightroom & many more

Competitors of Adobe

The winner of the Best CEO 2020 award has a very tight competition going on with other big shot companies such as:

• Salesforce
• Microsoft
• Apple
• Oracle
• IBM

Now that we have got a good grasp over the core working and history, let us move on to the SWOT analysis of Adobe.

SWOT Analysis of Adobe 

A SWOT analysis is defined as a study usually done by companies and startups to achieve a deeper understanding of various threats, opportunities along with their strengths and weaknesses. It is the best way possible to analyse a company’s growth and watch out for potential market risks. The ultimate goal of performing a SWOT analysis is to look for ways to walk on the road of progress and success for a company.

To better understand the SWOT analysis of Adobe, refer to the infographics below:

Below is a step-by-step detailed guide to help you with the SWOT analysis of Adobe.

Strengths of Adobe

• Upgradation in Revenue Model by Bringing in Subscriptions: Adobe was primarily a model based on license. The software company later adapted and moved on to a market model that is based on subscription. The launch of Creative Cloud replaced the Adobe Creative Suite in the market. This mega move to the subscription-based model made a huge impact on the profits of the company by indicating a rise in annualized recurring sales (APR). A contribution of 67 percent of revenue was done to the subscription sale of Adobe. This move helped Adobe to keep its top position retained and increase net profit.
• Portfolio of Products: The Megamind of design software provides a spectrum of digital technology and digital marketing goods along with services. There is a line of goods launched for the practitioners, advertisers, companies, customers, and so on. This increases the need for the company to have a diverse and strong client base.
• Launched Applications: Photoshop launched by Adobe is one of the highly used software for editing pictures. Similarly, Adobe Premiere is also the most used among other video editing software by filmmakers and YouTubers. Adobe has been providing superior software to its clients for a long time now. The variety of features provided by each software and the convenience of using them makes Adobe the premium choice for every graphic designer.
• Global Brand Build Up: The broad global presence of the company, expanding in continents such as Asia, Europe, South America, North America helps in the marketing and advertising of any new software launched. The company withholds a tight network of dealers, resellers, and software vendors.
• Strong Marketing Base: The company follows marketing practices that are strategic, modern, and innovative. They use the platform of the internet to market their products extensively. The usage of Google Ads, Instagram marketing, Facebook marketing brings in more and more users every time.

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Weaknesses of Adobe

• Expensive Products: The products and software launched by Adobe are highly expensive, which makes it out of the budget for most of the customers. This also opens the room for other companies to launch equivalent products either at a very cheap rate or primarily free of cost.
• Slow Developing Video Animation Products in the Market: Adobe has not developed its presence in the field of 3D animation applications. This field is heavily captured and dominated by 3DS Max and Sony Vegas. Adobe Premiere Pro is not highly efficient at creating 3D systems as compared to 3DS Max or Sony Vegas.
• Financial Accountability: Increasing the finances for the company can be a cumbersome task.
• Feedback Game: There are many reviews laid out by numerous programmers, claiming that Adobe does not consider the specifications provided by them in form of feedback while launching new apps. If the company consists of a 360-degree feedback process, they can come up with better and more innovative products with revolutionary developments.

Opportunities of Adobe

• Developing Cloud Storage: The need for cloud storage has been observed to increase throughout the years. The cloud applications have been highly motivated by the market and pay-per-service subscription model. The Public Cloud Infrastructure budget was observed at the CAGR of 19.4% during the next 5-6 years.
• Microsoft Partnership: The strategic partnership of Adobe and Microsoft has proven to support the investment of companies in digital transformation. Adobe launched one of its most famous software applications, called Adobe Marketing Cloud, Document Cloud, and Creative Cloud. This type of strategic alliance assists in boosting Adobe’s customer line and revenues.
• Digital Marketing: Digital marketing has been climbing the ladders of popularity over the past few years globally. It is largely credited to the extensive usage of smartphones and internet penetration. Digital marketing is expected to rise by 12 per cent in CAGR in the next five years. Adobe is keenly looking ahead to grow its sales with the help of its cloud-based marketing tools.

Threats of Adobe

• Rising Competition: The line of products and services offered by Adobe faces a worldwide extreme level of competition. The technology boost has pushed new competitors to try their hand in the business too, this results in higher competitiveness for the company. This can have a heavy negative effect on Adobe’s profit margins. 
• Threat to Security: The leading software company keeps all its sensitive client data which makes it the perfect victim for illegal hacking. In addition to this, cybercriminals have been actively developing newer virus and malware forms. There can be a possibility of security breaches which the company has to take care of to retain its reputation in the market.
• Source of Applications: A wide range of open-source software ideas has been released that is easily accessible in the market. Corel Photopaint has proven to be a highly successful substitute for Photoshop for interested customers. Professionals cannot use open-source software, but it snatches a considerably good market share.
• Piracy: The biggest threat to any leading software company can be the piracy of their applications. There is a strong presence of pirated products in emerging and established markets. The CD versions of Adobe apps are widely available all over the market sold at a way cheaper rate.

This ends our detailed SWOT analysis of Adobe. Let us conclude our learning below.