Adobe Systems, Inc.- A Strategic Analysis

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Table of Contents

General Overview
SWOT Analysis
Competitive Advantage
References

General Overview

Adobe Systems, Inc. (Adobe) is an American-based computer software company that has dominated global markets. Co-founders, Charles Geshke and John Warnock, established Adobe in December 1982 with the intention of developing and trading PostScript language, which has since then revolutionized digital printing. Although Adobe is based in San Jose, California, it has grown and become a multinational company with a major presence in the United States, Europe, North America, the Middle East, and Asia-Pacific. Other main locations are Brazil in South America, South Africa in Africa, and Melbourne and Sydney in Australia. Major products of Adobe are cloud computing solutions, graphic design software, web design programs, video, and audio editing software, digital marketing management tools, web-hosting services, server software, and e-learning programs (Adobe, 2018). The diversity of its products has enabled Adobe to penetrate and dominate the computer industry.

The analysis of growth shows that Adobe has grown exponentially in the past three decades. The management incorporated Adobe in California (1983) and later reincorporated it in Delaware (1997). To boost its growth, Adobe entered the stock market through an initial public offer in 1986. Currently, Adobe has over 18,000 employees, and financial performance indicates increasing profitability. With total assets of $14.53 billion, operating income of $2.13 billion, Adobe gets a net income of $1.69 billion (Adobe, 2018). According to the financial report, the company achieved annual revenue of $7.3 billion and registered the highest revenue of $2 billion in the last quarter of 2017 (Adobe, 2018). Recent trends show that the increase in revenue is 25% with a projected growth of about 30% in 2018.

SWOT Analysis

Strengths

The three major strengths of Adobe are innovative products, a robust global presence, and a trustworthy brand. Adobe creates innovative products that are unique and competitive in the software industry. Given that Adobe provides diverse applications and services to customers across the globe, it has established an interactive platform called Creative Cloud (Vance, Merati, Yang, & Yuan, 2016). This platform facilitates Adobe to earn most of its revenue because it offers subscription-based programs and services. A robust global presence has enabled Adobe to become competitive in the international market. Adobe has an extensive and elaborate network of vendors, distributors, and suppliers across the world, which streamlines the supply chain and ensures a constant supply of products and services. The establishment of offices in the United States, North America, Europe, South America, Asia, the Middle East, Africa, and Australia has empowered Adobe to penetrate global markets and increase its market share. Since Adobe provides quality and creative products, and it has been in operation for decades, it has established a trustworthy brand adopted by international companies.

Weaknesses

The analysis of Adobe shows that costly subscriptions, limited compatibility of its programs, and deprived customer care are some of the dominant weaknesses. The shift from the model of a perpetual license to the subscription-based model has increased the cost of products and services that customers procure. Costly subscription limits the number of potential customers that Adobe targets in developing countries across the world. Even though Adobe offers its products and services in an innovative platform of Creative Cloud, users of Linux cannot access them due to compatibility issues. In this view, Adobe does not target users of Linux, yet they comprise a significant proportion of potential users of its services. Adobe is also notorious for deprived customer care for it does not address issues that customers raise. Even though customers encountered problems related to usability, security, and privacy of Flash Player, Adobe has not taken appropriate actions to address them (Ghaffarian & Shahriari, 2017). In this view, most browsers no longer rely on Adobe’s Flash Player.

Opportunities

Increasing demand for cloud computing, partnerships in information technology, and the emergence of e-learning are some of the opportunities that Adobe has in the global markets. The inception of Creative Cloud in 2012 made Adobe explore and realize the potential of cloud computing in generating most of its revenues. As cloud computing offers a cost-effective, efficient, and secure way of data management, modern organizations are increasingly demanding cloud services. Strategic partnership with Microsoft has provided an opportunity for Adobe to offer cloud services to computer users and boost its customer share. Adobe uses Microsoft Azure for advertising its cloud computing solutions to potential customers around the world. The emergence of e-learning offers a substantial opportunity for the growth of Adobe. According to Fita, Monserrat, Molto, Mestre, and Rodriguez-Berruezo (2016), Adobe Connect provides a web-based platform for students and instructors to interact. Other programs such as Adobe Captivate Prime and Adobe Presenter Video Express have an enormous opportunity in learning institutions.

Threats

Increasing competition and changing preferences of customers are two major threats that Adobe faces in the global market. Competitors such as the International Business Machines Corporation, Google, and Microsoft give stiff competition to Adobe as they provide cloud-computing services (Ray, 2016). Moreover, in advertising and marketing, Adobe experiences tough competition from global giants such as Facebook and Google. Changing consumer preferences is also a major threat because millennials require creative tools for inspirational purposes. Given that Adobe does not provide essential inspiration to millennials, it allows YouTube, Facebook, Instagram, and Pinterest to dominate the market (Liu & Li, 2018). Additionally, the existence of open-source applications that are free and offer the same services changes preferences of customers. The growing applications from the open-source environment threaten to shrink the customer-base of Adobe.

Competitive Advantage

To improve its competitive advantage, Adobe ought to exploit strengths, overcome weaknesses, explore opportunities, and counter threats. As a strategic recommendation, Adobe should continue creating innovative products for customers to access and utilize easily via Creative Cloud. Adobe should also strengthen and expand its global network to reach out to remote markets and streamline the delivery of services to customers. Since a trustworthy brand gives Adobe a competitive advantage in the competitive market, it should continue to improve customer satisfaction and loyalty.

To overcome its weaknesses and advance competitive advantage, Adobe ought to reduce the cost of its products and services, enhance the portability of its programs, and improve customer care services. Reduction of the subscription fee is critical for it would enable Adobe to penetrate the competitive market and expand market share, particularly in developing countries where it has a limited presence. Since Creative Cloud is not compatible with the Linux platform, Adobe should ensure portability to tap new markets. To retain and attract potential customers, Adobe has to create responsive customer care.

Adobe should explore cloud computing, partnerships, and e-learning since they are the main opportunities for growth and enhancement of competitive advantage. Adobe needs to explore and expand its cloud computing services because there is an increasing demand due to the advancement of information technology. Partnership with other software companies such as Microsoft is critical for it empowers Adobe to share resources and market itself. As e-learning is an emerging field in most countries, Adobe ought to explore and create innovative tools for universities to utilize.

To counter significant threats, Adobe should penetrate new markets and create products and services that are in tandem with changing preferences of customers. Penetration of new markets would boost the competitive advantage of Adobe because exploited markets are no longer profitable. Regarding the changing needs of customers, Adobe ought to employ a customer segmentation strategy in targeting customers with unique needs such as organizations and Millennials.

References

Adobe. (2018). Adobe Fast Facts. Web.

Fita, A., Monserrat, J. F., Molto, G., Mestre, E. M., & Rodriguez-Berruezo, A. (2016). Use of syhcronous e-lerning at university degrees. Computer Applications in Engineering Education, 24(6), 982-993. Web.

Ghaffarian, S. M., & Shahriari, H. R. (2017). Software vulnerability analysis and discovery using machine-learning and data-mining techniques: A survey. ACM Computing Surveys, 5(4), 1-36. Web.

Liu, H., & Li, X. (2018). Social media envy: How experience sharing on social networking sites drives millennials’ aspirational tourism consumption. Journal of Travel Research, 1(1), 1-15. Web.

Ray, P. P. (2016). A survey of IoT cloud platforms. Future Computing and Informatics Journal, 1(1-2), 35-46. Web.

Vance, T. C., Merati, N., Yang, C., & Yuan, M. (2016). Cloud computing for ocean and atmospheric science: A primer and introduction. IEEE MONTEREY, 1(1), 1-4. Web.

Click Here To Order Now!