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Complete SWOT Analysis of ServiceNow – An American Software Company

by | Case Studies | 0 comments

Previously, a detailed SWOT analysis has been done by us of one of the leading brands, Nestle. Similarly, in this article, we will be doing the SWOT analysis of ServiceNow which is an American software company. 

ServiceNow is based in Santa Carla, California. A cloud computing platform is developed by this company which is helping other companies to manage digital workflows for their operations in the enterprise. 

There is one more aspect in which ServiceNow is successful in the cloud computing industry, which is their marketing efforts. In this digital world, a change can be observed in the field of marketing and if you are interested in learning these changes, go ahead and check out our Free MasterClass on Digital Marketing 101 by Karan Shah, who is also the founder and CEO of IIDE. 

Want to see how ServiceNow has succeeded in the software industry? In this blog, you will learn about the SWOT analysis of ServiceNow. Before we get started, learn more about ServiceNow‘s company, how it was established, its products, financial position, and its competitors.

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About ServiceNow

SWOT Analysis of ServiceNow - ServiceNow Logo

Fred Luddy is the founder of this company which was founded in 2003. The New York Stock Exchange has listed ServiceNow and Russell 1000 Index and S&P 00 Index also constitute this company. On the list of the most innovative companies in the world, this company was named number one by Forbes, in 2018.

Previously, ServiceNow was called Glidesoft, Inc. which was founded by Fred Luddy in 2003. It was later incorporated in 2004 in California. Fred Luddy was also the chief technology officer for Peregrine Systems which was a San Diego-based software company.

Concentrating on the development of the software which would be offered by the company, Luddy was the only employee until mid-2005. After which five people were hired. In 2006, they changed the name of the company to ServiceNow. Annual revenue of 13 million dollars was reported by ServiceNow in 2007 after which a new office was opened by them in Silicon Valley. 2007 was also the year when positive cash flow was reported by the company. 

After 2011, the company had offices in cities like New York, Atlanta, San Diego, Frankfurt, London, and Chicago with a total of 275 employees. There was also a partnership of the Company with Accenture where there were more than 100 ServiceNow consultants.

Quick Stats on ServiceNow
Founder Fred Luddy
Year Founded 2003
Origin Santa Carla, California
No. of Employees 15,000+
Company Type Public
Market Cap $114.64 Billion (2021)
Annual Revenue $4.51 Billion (2020)
Net Income/ Profit $118 Million (2020)

 

SWOT Analysis of ServiceNow - ecosystem hero ServiceNow

Products & Services by ServiceNow

ServiceNow has been in the Software industry and deals in

  • Automated testing framework
  • Configuration management database
  • Edge encryption
  • Intelligent automation engine
  • Knowledge management
  • Cloud computing
  • IT service management


Competitors of ServiceNow

The top 5 competitors of ServiceNow are:

  • BMC
  • Microsoft
  • IBM
  • Atlassian
  • Broadcom


As now we have a better understanding of ServiceNow, let’s look into the SWOT Analysis of ServiceNow.


SWOT Analysis of ServiceNow

A SWOT analysis identifies a company’s strengths, weaknesses, opportunities, and threats. A proven and true management paradigm that allows ServiceNow to compare its business and performance with competitors and the industry as a whole.

SWOT Analysis of ServiceNow - SWOT Infographics of ServiceNow

So let us go ahead and first have a glance at the strengths of ServiceNow from the SWOT analysis of ServiceNow.

Strengths of ServiceNow

As one of the leading companies in the industry, ServiceNow, Inc. It has numerous strengths that make it stand out in the market. These strengths not only help protect your market share in existing markets but also help you penetrate new markets.

  • Strong Free Cash Flow: There is a strong free cash flow that puts resources into the hands of the company to expand into new projects. 
  • Good ROI: It is relatively successful in new projects and provides a high return on capital expenditures through the creation of new revenue streams.
  • Strong Brand Portfolio: Over the years ServiceNow has invested in building a strong brand portfolio. This brand portfolio can be very useful if an organization wants to expand into new product categories. 
  • Outstanding Performance in New Markets: ServiceNow has accumulated experience to enter new markets and achieve success. The expansion has helped organizations create new revenue streams and diversify business cycle risks in the markets in which they operate. 
  • Highly Skilled Labor: Highly skilled workforce through successful education and training programs. By investing enormous resources in the training and development of ServiceNow employees, they not only create highly qualified employees but also motivate them to achieve more. 
  • Mergers and Acquisitions: A track record of successfully integrating additional companies through mergers and acquisitions. Over the past few years, it has successfully integrated several technology companies to optimize operations and establish a stable supply chain.


Weaknesses of ServiceNow

Strategy is all about choices and weaknesses are areas where companies can improve through SWOT analysis and leverage their competitive advantage and strategic positioning.

  • More Investment is Needed in New Technologies: Given the scale of the expansion and the multiple geographic regions in which the company will expand, ServiceNow overall integrating processes requires more money to be invested in technology. Current investments in technology are not aligned with the company’s vision. 
  • Financial Planning is Not Being Performed Properly and Efficiently: The liquid asset ratio and liquidity ratio indicate that a company can use its cash more efficiently than it currently is. 
  • High Labour Outflow: Higher dropout rates compared to other organizations in the industry, ServiceNow, and have to spend significantly more on employee training and development than their competitors. 
  • Not Very Successful in Integrating Companies with Different Work Cultures: As mentioned earlier, ServiceNow is successful at integrating small companies. It has its share of failures to merge firms that have different work cultures.
  • High Competition: The daily stock is high compared to its competitors, so the company has to raise more capital to invest in the channel. This could affect the long-term growth of ServiceNow.
  • Product Marketing: Although the product is successful in terms of sales, its positioning and unique selling proposition are not clearly defined, making it vulnerable to attack from competitors in this sector.


Opportunities for ServiceNow

Opportunities are potential areas for companies to focus on to improve results, increase sales, and ultimately profit.

  • New Environmental Policy: New opportunities will create a level playing field for everyone in the industry. This is a great opportunity for ServiceNow, Inc. to realize the benefits of new technologies and gain market share in new product categories.
  • New Taxation Policy: New tax policies can have a significant impact on the way ServiceNow does business and open up new opportunities for them to increase its profitability.
  • Open New Markets Through Government Agreements: New technology standards and government free trade agreements provided to ServiceNow opens up opportunities for ServiceNow to enter newly developed markets. 
  • New Customers Through Online Channels: The company has invested huge amounts of money in its online platform over the past few years. This investment opened up a new sales channel for ServiceNow. Over the next few years, companies will be able to seize this opportunity by better understanding their customers and meeting their needs through big data analytics.
  • Economic Recovery: Economic recovery and rising consumer spending after years of recession and slow industrial growth are opportunities for ServiceNow to attract new customers and increase market share.


Threats to ServiceNow

Threats are environmental factors that can harm a company’s development. Here are some of ServiceNow’s threats:

  • Legal Actions: The Company may face legal action in other markets given the continuing fluctuations in different laws and product standards in those markets.
  • Fierce Competition: Strong profitability has increased the number of players in the industry over the past two years, putting downward pressure on overall revenue as well as profitability.
  • Liability Laws: Vary from country to country ServiceNow may face a variety of liability claims as a result of these market policy changes. 
  • Quantitative Increases in Commodities: This could jeopardize ServiceNow’s profitability. A shortage of skilled labour in certain global markets threatens ServiceNow’s continued earnings growth in the market.
  • Operates Globally: Because the company operates in many countries, it is exposed to currency fluctuations, especially given the unstable political environment in many markets around the world. This may face some challenges in the market and may result in some losses as well.


This ends our elaborative SWOT analysis of ServiceNow. Let us conclude our learning below.

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To Conclude

ServiceNow is a well-known software company with significant global positions. During the SWOT analysis of ServiceNow, we found that the company is highly dependent and enjoys strong brand awareness and trust from its customers. It has a solid logistic base and covers all markets it serves, but suffers from more active research and development from an increasing number of manufacturers and competitors in the same space.

But being such a huge brand across multiple countries, ServiceNow should continue to innovate and develop more products and launch them in the market with the best possible marketing strategies.

Especially digital marketing which is vital in today’s growing and expanding world, to get better results and to remain competitive in the market. If you don’t have any idea of what digital marketing is or want to learn more about it and upgrade yourself, here is IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.

We hope this blog on the SWOT analysis of ServiceNow has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.

If you enjoy in-depth company research just like the SWOT analysis of ServiceNow, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for taking the time to read this, and do share your thoughts on this case study of the SWOT analysis of ServiceNow in the comments section below.

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

Aditya Shastri

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