Yahoo's Organization Structure - Research Paper Example

?What is your company’s organization structure? Does it make sense? Yahoo uses a hybrid organizational structure that combines geographical, functional and product structures. This is demonstrated on the company’s management page where there are heads of different divisions some categorized geographically and others functionally (Yahoo Para 1). For example Executive Vice President, Service Engineering & Operations demonstrates division by function while Executive Vice President, Americas and Senior Vice President & MD, EMEA Region show division by geography. Yahoo has been too reliant on its U.S. business over the years which mean that the approach it uses in the US would not be the same as what it needs to use in the other regions where it is still growing its market share. This makes it sensible to separate the US business unit from those of other geographies. For an organization of its size with more than 13,700 employees division by function makes it easier to demarcate responsibility for revenue targets and expense management. What is your company’s strategy? Is it successful? Yahoo demonstrates two strategies. In its dominant US market, the company is pursuing organizational renewal to reverse organizational decline and put the firm back on a more appropriate path to success. The company’s decline was largely due to over-expansion of its product line and inability to deal with shifts in consumer demand for platforms that are provided by its major rivals: Facebook and Google. Yahoo’s new CEO plans to do away with about 50 properties to enable the company refocus on its core business (Scott Para 1). According to the new CEO, Yahoo has been doing way too much of which only a few things were being done really well (Scott Para 5). The second strategy that Yahoo is pursuing is growth through international strategy. Yahoo’s internationalization is for market-based reasons. Currently Yahoo is too reliant on its U.S. business. The company seeks to capture part of the market share of the growing middle class in emerging economies. Part of this international market development strategy will be through offering of country-specific services. So far none of these two strategies have been implemented long enough to evaluate whether they are successful or not. Does your company operate within NAFTA or the European Union? Do those free trade agreements/ free trade union benefit or harm your company? Yahoo operates both within NAFTA (US, Canada, Mexico) and the European Union (Germany, Italy, Scandinavian countries etc.). Through its numerous offerings Yahoo is essentially a service-provider. NAFTA eliminated trade barriers in most service sectors and a couple of products as well. This reduction / eliminations of tariff increases trade within the region and hence give confidence to more individuals to use Yahoo platforms to advertise or sell their products or services within the region. This way NAFTA benefits Yahoo. Using the same argument one could say that by increasing trade within continental Europe, the European Union also indirectly benefits Yahoo by increasing the need for an intercontinental platform to advertise or trade in products and services. The company acknowledges as much, though indirectly, in its annual report where it highlights that fluctuations in foreign currency exchange rates as a possible risk factor. Does your company operate in low or high labor rate countries? How does your company try to reduce labor costs? The majority of Yahoo’s staff is located in the US. The company does not have a specific policy geared towards obtaining low or high labor rate countries. Moreover, the company’s core business is largely dependent on proprietary software which is mostly developed in the US. The company has however in some instances purchased technology and license intellectual property rights (Yahoo, Yahoo! Annual Report 2010 11). Yahoo’s solution to lowering labor costs is to eliminate non-performing business units and then to reduce headcount. The company has conducted six major layoffs since 2007 (Perlroth Para 2). By looking at information from http://globaledge.msu.edu, access Freedom of the World information, and evaluate the state of political rights and civil liberties of 3 countries your company operates in. Also look at the Market Potential Index and recommend 3 emerging markets your company should operate in. If your company already operates in those countries, state why or why not, these markets make sense. Looking at the Market Potential Index (MPI) while implementing its internationalization strategy Yahoo should operate in Brazil and Egypt because they have the highest scores for their two continents – 36 and 32 respectively (globalEDGE). Brazil and Egypt are attractive because they present an entry into two vast continents from where the company could develop a general understanding of the consumer and business cultures of those continents before further expansion. Yahoo already operates in Brazil and Egypt. In Asia, South Korea which has an MPI of 49 also represents a good market especially given its rising prominence in electronic device manufacturing. Having a local chapter in South Korea could make it easier for Yahoo to enter into strategic alliances with Korea’s giant electronic device manufacturers such as Samsung and LG electronics to develop integrated applications on their tablet, PC and smartphones. On the other hand, in decreasing order of economic freedom these countries perform as follows: South Korea, Brazil then Egypt. Using the WTO International Trade Statistics, report on the world trade flows between your company’s home country and its 5 largest trading partners. Does your company operate with any countries not in the WTO? Does WTO and free trade benefit or hurt your company? Yahoo does not have business operations with any countries not in the WTO. WTO has a similar positive effect on Yahoo’s business as NAFTA or the European Union. As discussed earlier the more trade is encouraged across borders the more business Yahoo is likely to get because it provides a platform for businesses and individuals to buy and sell goods and services over the Internet. Culture & Etiquette-What is the 5 most striking cultural characteristics or 5 tips for business etiquette of your company’s home country (if it is not a US company) or one of its largest or growing international markets? Five tips for business etiquette in Mexico are as follows. First, personal relationships are key to business success therefore one needs to use a person known to the Mexicans to build the trust necessary before conducting business. Second, punctuality is not rigid. Thirdly, women should not invite a male counterpart for a business dinner unless other associates or spouses attend. Fourthly, refrain from using first names unless invited to do so. Finally, avoid eye contact as a sign of respect. List and describe 3 major events in your company during the semester First of all, Yahoo appointed Scott Thompson as its new CEO effective on January 9, 2012. This follows the ouster of Carol Bartz after a string of poor performances in September 2011. The company was being led by Tim Morse as caretaker CEO. The second event is the announcement by Scott Thompson of plans to lay off about 14 percent of Yahoo staff to lower the company’s overall costs. It is projected that this plan would yield $375 million in annualized savings (Perlroth Para 5). The third event is that Yahoo and Facebook both sued each other over patent infringement claims. These two legal suits may be create friction between these two Internet giants and could possibly lead to reduced collaboration in future. This may negatively impact Yahoo which has increased its traffic from Facebook by 300 percent after it integrated Facebook’s popular news activity feature into its own sites (De La Merced and Rusli Para 11). List 3 major world news events and describe how they impacted (or may impact) your company. The first major world event is the Republican Party nominations in the US. This has had a positive impact by increasing traffic to Yahoo news sites. The second major world event is the phenomenal performance of Apple. As the world’s most valuable company and with close to US$ 100 billion in cash, Apple’s dominance in the tablet industry and smartphone – in the US – means that it has the potential to change how the industry operates in the years to come much like Microsoft did with the personal computer. The oncoming US elections towards the end of the year and the Olympic Games this summer should also increase traffic to Yahoo’s web sites. Do you believe your company’s revenue and profits will grow over the next 5 years? Why or why not? Yahoo has been struggling in almost all its category segments against better rivals. The company categorizes its offerings into three: communications and communities, search and marketplaces, and media. In communications and communities the company faces stiff competition from Facebook and Google. In search and marketplaces the company faces Google, Amazon and eBay. In Media the company faces Apple, Netflix and Amazon. The fact is that Yahoo has numerous products but that it lacks a competitive edge in either. So far the company is benefiting from its huge traffic which it may lose unless it re-strategizes. Unfortunately, the four leading Internet technology players today – Apple, Facebook, Amazon and Google – have the resources to match their ambition, and are also relentless in their pursuit for market domination. I do not see Yahoo’s revenues and profits going up unless it looks for a strategic partner to give it the extra resources it needs to compete with the big four. Works Cited globalEDGE. “Market Potential Index (MPI) for Emerging Markets - 2011.” globalEDGE. 16 Mar. 2012. Web. 28 Apr. 2012. De La Merced, Michael J, and Evelyn M Rusli. “Facebook Accuses Yahoo of Infringing on Patents.” NYTimes.com. 3 Apr. 2012. Web. 28 Apr. 2012. Perlroth, Nicole. “Yahoo to Cut 2,000 Jobs.” NYTimes.com. 4 Apr. 2012. Web. 28 Apr. 2012. Scott, Cameron. “Yahoo’s New CEO Lays Out Strategy for Smaller, More Focused Company.” InfoWorld. Web. 28 Apr. 2012. Yahoo. “Management.” Yahoo. 28 Apr. 2012. Web. 28 Apr. 2012. ---. Yahoo! Annual Report 2010. Sunnyvale, CA: Yahoo! Inc, 2011. Print.  Read More