Management 303 SWOT Analysis: Nvidia Corporation
Brian Barnettt
DeVry University

Organization History

Nvidia Corporation is an American global technology company specializing in the manufacturing of graphics processing units (GPUs), as well as having a significant stake in manufacture of system-on-a-chip units (SOCs) for the mobile computing market. Nvidia was founded in 1993 by Jen-Hsun Huang, Chris Malachowsky, and Curtis Priem and is headquartered in Santa Clara, California. The Nvidia Corporation is responsible for inventing the GPU in 1999 and has shipped more than 1 billion to date.

In 1999, Nvidia was listed on the NASDAQ under the symbol NVDA. The company currently has 8,000 employees worldwide, has 6,000 patent assets, and reported $4.3 billion in revenue in fiscal year 2013. According to co-founder, president and CEO, Jen-Hsun Huang, Nvidia’s mission has always been to build a great company and be the most important 3D graphics company in the world.

Organizational Strengths and Weaknesses

Nvidia Corporations first major organizational strength has been their product mix, and as the manufacture of graphics processing units for PCs shifted its attention to the mobile computing boom, Nvidia has done so seamlessly. Nvidia manufactures some ome of the most popular top-of-the-mind brands such as GeForce, Quadro, Tegra, Tesla, nForce and currently holds more than 2,300 patents worldwide. Nvidia’s strength in this area has helped to increased its addressable market, and has advanced computing power to not only gamers, but to researchers, users of motor and aero vehicles alike, and of course mobile devices.

The second major strength of the Nvidia Corporation has been in the area of innovation. After designing a chip, the company continues to evolve and it endeavor to improve that chip and come up with a more efficient design not long after a successful release. This has helped Nvidia to provide better solutions to customers, thereby retaining existing ones and adding more in the process. By the end of 2016, the PC Gaming market is estimated to reach nearly $25 billion. By innovating new GPU’s, Nvidia has been the engine that is driving this thriving market.

One of the organizational weaknesses affecting the Nvidia Corporation has been the absence of a top selling device. Nvidia’s Tegra mobile chips have yet to find their way into best-selling device such as Apples iPhone. Nvidia’s chips are used to power mostly Android based devices which have struggled to gain popularity and currently Apple dominates the mobile market. Nvidia is currently developing new technology to improve their market share, but within a market measured in 100s of millions, it could take years to reach critical mass.

Nvidia has also shown a weakness due to the slowdown of the GPU business. Currently the manufacturing of GPU’s makes up half of the company's revenue. This slowdown has caused Nvidia’s GPU business to experience some hiccups in recent years due to factors such as natural disaster, which has affected its ability to efficiently manufacture and delivery it’s products. These factors and their effects could be felt in the future business. Nvidia can combat this weakness by developing new technologies to be used in mobile devices as well as working to develop alternate methods of manufacturing and delivery.

Opportunities and Threats

The most significant opportunity for Nvidia Corporation is in the development of mobile technology. NVidia’s Tegra family of processors can significantly increase the companies standing in the mobile market. The mobile business has grown rapidly in recent years and it is estimated that it will grow another 50% in fiscal year 2014. The Tegra family of processors will be features in upcoming versions of HTC smartphones and may also find their way into Samsung’s family of Galaxy smartphones.

Another major opportunity for Nvidia is that while PC’s may be on the decline, the GPU still has some fuel left. There is tremendous room for growth in countries such as India and China, which has the largest PC market in the world. As previously mentioned by the end of 2016, the PC Gaming market is estimated to reach nearly $25 billion and could help Nvidia grow significantly in coming years.

One threat to the success of the Nvidia Corporation has been competition from companies such as AMD, Intel, Texas Instruments, Qualcomm and Samsung. Nvidia and AMD have been in a battle for Graphics Card supremacy and each company is continually trying to develop new technology in order to top the GPU market. Recently Intel has become a major threat to Nvidia due to its new CPU generation with integrated graphics. Code-named "Haswell", these new chips offer better power efficiency as well as a jump in GPU power. That's where the threat lies for Nvidia. Each jump in Intel's integrated GPU brings it closer to displacing even more discrete GPUs from the market.

Another threat to Nvidia has been the decline in personal computing. In recent years the revenue generated from the PC games market was significantly smaller than consoles. Console gaming has dominated the market. While that gap hard closed slightly in the last year, and is expected to be slightly bigger this year, it not expected to turn around until 2017. In order to take advantage of that potential, Nvidia must continue to develop new chips that push the limits of PC’s in order to satisfy the demanding PC enthusiasts.

While Nvidia is still considered the leader is visual computing technologies, the company is not without it challenges. Tough competition from companies such as AMD and Intel and the booming mobile market could present serious problems for Nvidia in the future. In order to maintain their presense and advantage in the manufacture and development of new and innovative GPU technology, Nvidia must continue to be a driving force in PC gaming, as well as a strong contented to mobile giants like Apple. In order to succeed in these areas Nvidia must strive to develop more and more powerful graphics chips in order to prepare for the demanding requirements of PC games currently in development. PC games today rely more and more heavily on raw graphics processing power and enthusiasts want the best performance possible while still getting the visual ‘eye candy’ that has become the trademark of PC games.

Nvidia can further ensure its success in the future by developing new and more powerful mobile chips, and work to get them into the newer mobile devices that are being manufactured. Mobile users are increasing usage of these devices in all facets of their every day lives, and one area that is becoming more popular is mobile gaming. By introducing new technology such as their Tegra family of chips, Nvidia can establish themselves as a contenter in the battle against companies such as Apple and Intel.

References

Chauhan, Harsh. (March 2, 2012). Weighing nvidia's pros against the cons. Daily Finance. Retrieved from http://www.fool.com/investing/general/2012/03/02/weighing-nvidias-pros-against-the-cons.aspx

Griffin, Rocky W. (2013) Management. Cengage Learning; 11th edition

Nvidia. (2013). About Nvidia. Retrieved from http://www.nvidia.com/object/about-nvidia.html

Nvidia. (2012). mbaskool.com. Retrieved from http://www.mbaskool.com/brandguide/it-technology/2343-nvidia.html