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Zoom Video Communications SWOT Analysis

PESTLEanalysis Team
PESTLEanalysis Team
Table of Contents
Table of Contents

Our SWOT analysis of Zoom Video Communications examines the video conferencing company's Strengths, Weaknesses, Opportunities and Threats.

There used to be a time when video conferences were limited to multinational offices or for communicating with friends and family living far away. But the global pandemic has transformed video chatting into a very big need. This is why platforms like Zoom have gained so much traction. In the following Zoom Video Communications SWOT analysis, we will understand the business in more detail.

How many of you have instantly gone to use Zoom whenever thinking about video conferencing? There are other alternatives too, but zoom somehow has become the go-to word for the practice. One can argue that this is a big feat for the company.

Zoom is an American video communications company. Its founder is named Eric Yuan who founded the company in 2011 but it was officially launched as software in 2013. The actual services that they are offering at the moment include Videotelephony, Online chat, and Business telephone systems.

Business professionals and working people have been using zoom regularly for their operations on a daily basis ever since the world went online 2 years back. That being said, students and teachers belonging to all grades have used the service just as frequently for regulating SOP-friendly education.

It can be said with certainty that zoom has become one of our most used applications. Ideally, it all looks and sounds to be amazing, but whether or not that is true is another story. This SWOT analysis will help us to identify all the factors which make it a success and all those which do the opposite.

SWOT analysis is basically a tool that is used to look at a total of four major factors which can influence entities immensely. The word entity signifies that SWOT can be conducted for anything from a small business to a large multinational. You can also conduct one for an industrial overview. Countries can also be analyzed this way.

Before we move ahead, the first two factors of the SWOT are called internal factors whereas the latter two are called external ones. Internal factors (strengths and weaknesses) can easily be controlled by the company whereas the external factors (opportunities and threats) are out of the influential sphere and take place on their own.

This can better be explained using an example. Having good customer service would be called a strength for zoom because they can control this factor. However, if there emerges a competitor who has more market share than zoom, this would be a threat because the company cannot do anything about it.

Now that we know what Zoom is and we have some idea about what a SWOT analysis is, we can move ahead. Read on ahead to know more.

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What are the biggest strengths Zoom has?

We all know that Zoom is a huge deal these days. We all probably use it pretty frequently as well. But what exactly sets Zoom apart from its substitutes? These strengths identified explain very well why Zoom has amplified so successfully.

Freemium Model

Zoom turned out to be so popular because of this model they offer. It basically means that users can use the service for absolutely free but if they want additional services, they have to pay.

Many people go to Zoom because the other alternatives charge a standard payment to be used.

User Friendly

It is a very easy application to use. The interface is very straightforward and can be operated by anyone with basic tech literacy. It can even be operated without installing the app as long as someone sends the link to an invite. This ease and accessibility make Zoom so popular with people.

Global Usage

People around the world use this business. Video conferencing has become such an important aspect of our lives even after the pandemic has relatively settled down.

If we talk about 2021 alone, there are a total of 300 million people using Zoom daily! This obviously includes both free and paid users, but think of the traction Zoom gets. Just in 2019 before the pandemic, it was only 10 million users.

Financially Sound

It should not come as a surprise that Zoom is worth a fortune considering its popularity with the masses. As of 2021, it is worth a mind-numbing $57.11 Billion! The company was already at the billion-dollar mark in 2017, but that wealth multiplied exponentially once they went public.

Brand Name

“Zooming” is literally considered a part of the casual language now. It has become a phenomenon at this point. You are not going to find anyone who does not know of or use Zoom.

That is how you know a company has become important. Along with social media, Zoom is the app frequently used by all demographics of users.

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What are Zoom’s biggest weaknesses?

Where there is rise, there is fall. No matter how concrete a company’s strengths are, it is always susceptible to weaknesses; here are Zoom’s major weaknesses as of 2021. 

Security Issues

You probably have heard about the infamous data breach incident where as many as 500,000 users got compromised. Their information was stolen by easily hacking into private calls and was even sold on the dark web.

Many meetings are extremely confidential with information that is highly sensitive and secret. If such a call gets hacked, the company can lose a lot of its users and hence, value.

They Don’t Offer End-to-End Encryption

Zoom does not offer this feature which is why people might be reluctant to use it very often. What this encryption means is that information being shared remains between the two ends i.e. the two people/places in contact with each other.

This weakness in fact is a barrier for Zoom to enter into even bigger markets.

Zoom Rooms

This is a feature common to all video platforms, where people have the option to create smaller “rooms” to be able to have more focused meetings. Zoom does have them but unfortunately, they don’t offer too much control to the users, they need to be improved.

What are Zoom’s biggest opportunities?

Weaknesses can always be eradicated as long as there exist opportunities. Even if they can’t be eradicated, they can be minimized by turning opportunities into more strengths for the business. Here are some of the most relevant opportunities for Zoom.

Increasing Demand

As mentioned above in the strengths, there are a total of 300,000,000 daily Zoom meetings taking place all around the world.

This is the current saturation of the platform, more users cannot be accommodated as of yet. Considering the sudden boost and reliance on this service, the numbers are expected to grow. Zoom should increase its capacity of users to have an even bigger chunk of the market.

Up-Selling

They have a freemium model of revenue which works more than great. They could use this as an opportunity to up-sell their premium offers to users, especially B2B users.

Corporations collaborate with each other regularly so why not make customized packages with specific ones to sell more? Zoom already has the credibility; with a little more boost the opportunity is up for grabs.

Diversification

Sure, the brand needs no apparent help at the moment; in fact, they are strong enough to help other brands. But this doesn’t mean that demise isn’t inevitable; every new idea, every brand becomes obsolete at one point in time, especially when better or easier alternatives emerge.

Diversifying into other business streams solves the problem really well because it gives the option of not having to heavily compete with competitors in the main industry of business. They can look into making a small social media platform or a chat service similar to WhatsApp for Zoom users.

Growth

They have a billion users but their infrastructure and offices are not global right now. They are investing in R&D centers in China and India. There are many more countries which can be considered excellent markets for the business.

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What are the biggest threats looming over Zoom?

Yes, even Zoom has threats to watch out for. It only takes one threat to bring a business down if not taken care of in a timely manner. There could be many small potential threats to Zoom but here are some of the biggest ones they need to escape immediately.

Competition

Zoom has huge competitors in the shape of Google and Microsoft both of which provide similar video conferencing platforms to users. They are stellar brands able to easily seize the market owing to huge followings already.

Zoom cannot ignore competition despite their successful tenure. Moreover, many other competitors exist and can exist because the barriers to entering this market are very low; the business is easy to replicate.

Post Pandemic Decline

Zoom saw a monumental increase in users after Covid-19 hit the world so it is entirely possible the usage would decrease when things go back to normal completely.

Every few months a new variant hits the market with more and more restrictions. So hybrid modes of work and education are still prevalent. But now that many are vaccinated and much less prone to fatality from the virus, things might go back to the old normal.

Video calling may see a sharp decline because of this so Zoom might lose this glory.

Zoom Video Communications: Final Word

Well now that you have read your way through the article, you can now understand what Zoom is actually valued in business terms. You may also check out our PESTLE analysis of Zoom!

Although the brand is one of the biggest to exist in the 21st century, it does come with its fair share of challenges. The fact that people are able to easily hack into private meetings can really come to bite the company. No end-to-end encryption is also a pretty solid weakness for them at this point because privacy is not being guaranteed.

The competitors are some of the biggest players in the industry, with multiple portfolio businesses. Things are very scary in that regard however, zoom has done the impossible. It has surpassed all of these issues and has managed to become a multi-billion dollar business.

In conclusion, their success story can serve as an inspiration to many. It would be great to see how zoom manages to maintain relevance after the pandemic is over; we have big expectations from the company. Safe to assume though they are not becoming a has-been brand any time soon.

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A SWOT analysis is one of the easiest to understand, use and implement frameworks available for improving your organization. It can be applied to industries at large as well to understand them in more depth.

It highlights the strengths and weaknesses which occur on the inside and the threats and opportunities which linger outside. If you know these four components of the SWOT, you very easily can be on the road to improvement and growth. Knowing how to conduct a SWOT analysis is a very useful skill to have for working professionals as well as students to have.

If you wish to work on a SWOT of your own to increase your knowledge, we recommend the use of a good template. Moreover, you can understand how the analysis works by taking a look at a few extra examples. The easiest way to understand and explain a SWOT analysis visually is to draft it in a tabular form. It is more concise, clean, and comprehendible like this.



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