Strategic Management Concept of Yahoo Inc - Case Study Example

Module Case Study Analysis: ‘Yahoo!’ Inc INTRODUCTION Yahoo! Inc is an international corporation that supplies internet servicesfor businesses as well as individual users in nations all over the world. The company was founded in 1994 by David Filo and Jerry Yang and provides services such as email, directory, search engine services, news, web portal, radio music, web hosting, and international maps, among others. At present, Yahoo! attracts 3.4 billion page views on a daily basis. At present, Yahoo! offers services in 30 different languages; some of which are French, Russian, Spanish and English. GOALS AND MISSION When it was first created, Yahoo!’s main objective was to become the most popular search engine among internet users. It also aimed to become the most popular internet company with the world’s most prominent advertising groups. Some of its core values included excellence, ensuring teamwork, inspiring better innovative practices, and fostering community programs that would improve the environment. In as far as teamwork is concerned, Yahoo! focused on developing a diverse workforce that would then be encouraged to work harmoniously through individual accountability. Yahoo! has also sought to develop an extremely productive relationship with its billions of customers by ensuring that it supplies improved services that draw the customers and inspire them to remain with the company. In the recent years, Yahoo! has been exposed to increasing competition from ‘Google’- a rival search engine that has recently superseded the number of Yahoo!’s global customers. To enforce a new corporate culture with its new aim to once more re-capture its position as the search engine company to be reckoned with, Yahoo! changed its company mission to be to “connect all users with their communities, their passions, and the knowledge available to the entire world”( David, 94). To meet this new goal, Yahoo! has availed a wide range of new products that emphasize on providing clients with personalized user experiences. Before coming up with its new objectives, Yahoo! conducted extensive researches into consumer insights and the level of user participation (David, 96). Another of Yahoo!’s goals is to diversify its services in order to be more productive. EXTERNAL FACTORS THAT AFFECT ‘YAHOO!’ There are different external issues that affect the profitability of Yahoo! Some of these include: The Economic Growth of the United States: Yahoo!’s headquarters is in the United States. This means that any changes in the nation’s economy will affect the company’s bottom line. For instance, a few years ago, the company’s earnings were affected by the global recession. In addition, an economic slump can result in reduction in spending on advertising. Naturally, this will decrease the company’s revenue. Demographic Factors: Yahoo! might be able to benefit from the developing numbers of internet savvy young people in many nations. This segment of the global population provides a ready market that can be tapped by the search engine giant. Global Forces - There are nations such as India and China which have large markets that are as yet untapped by search engines due to different reasons. In China, there is a local search engine that is supported by the national government and so has more local customers than foreign search engine companies such as Yahoo! These are untapped markets that Yahoo! could greatly benefit from in future. Political Factors – Yahoo!, along with other search engines, have to meet the requirements of the American government in as far as issues such as privacy and business practice are concerned. Any unintentional crossing of regulations could cost the corporation greatly in terms of financial resources. Technological Factors – Yahoo! has to ensure that it keeps up with new technological advances in the information and communication industry in order to remain competitive. However, today, many of these changes take place on a much faster rate than was the case just a decade ago. This means that internet based corporations such as Yahoo! have to invest a lot of capital in upgrading. Yahoo! also has to ensure that it keeps ensuring that its policies are respected in the implementation of any new technologies. If, for instance, there are new technologies which are adopted which Yahoo! has not adapted to properly, its advertisements could be blocked; thus resulting in reduced earnings. SWOT ANALYSIS Strengths- Yahoo! is currently leading in the supply of display advertisements as well as in the generation of brand forming graphical videos. It also has programs such as Yahoo! Autos and Real Estate, and Finance- which its main competitors have not been able to upstage. These specialized services allow for it to enjoy from a greater diversity of customers than its closest competitors. Weaknesses – Yahoo! is quite dependent on the income brought by its advertising endeavors; while its nearest competitor, ‘Google’ is dependent on its video site, ‘You tube’. This allows for Google to be able to be more in charge of its revenues while also enjoying the reputation of being the most preferable platform for launching videos. Google also has a more efficient system as its search results bring almost double the revenue earned by Yahoo!’s. Google has also positioned itself in a better way than Yahoo! in order to make the most of customized advertising (David, 93). Opportunities- Yahoo! has many opportunities in the as yet untapped markets in developing nations in Asia, Africa, and South America. It can also make more effort to enhance its operations in search based marketing. Threat - Google is Yahoo!’s biggest competitor at present and has surpassed its revenue. Moreover, Yahoo! also has to fight in order to ensure that the rash of cropping social media sites such as ‘MySpace’ and ‘Twitter’ do not exert undue influence over its client base. Yahoo! also does not spend as much capital on new technology as its rival, Google. This means that there is a danger of it falling even further behind in terms of the implementation of the latest technical operations so as to remain relevant in the market. RECCOMENDATIONS Yahoo! has to make progress towards developing its customer base. This could be done by seeking to target other markets in which its competitors have as yet been unable to tap into. For instance, in China, Yahoo! is outflanked by the local ‘Baidu.com’ which holds more than 50% of the internet market. Yahoo! can capture foreign markets by cooperating with local telecommunications companies or by appropriating different channels of marketing like advertising, and sales promotion initiatives. Yahoo! can also tap market which holds the new internet users by providing programs such as internet packages that show users how to navigate around the internet while also providing them with free use for a specific amount of time. Yahoo! can also specialize in additional fields of information in the same way that it did with Yahoo! Finance. These fields could include health, or travel. This will compel users to start viewing it as the ‘go-to’ site where health matters or travel destinations for different holidays are concerned. CONCLUSION In coming up with a new corporate objective that aims at delivering customized services to its billions of customers, Yahoo! has chosen to aim towards recapturing the larger percentage of the global internet market. However, to realize its new objective, it has to aggressively implement strategies that will capture the interest of more users. To keep up with the new populations of even more savvy users in the Western nations, it is necessary for the company to hire competent mangers to oversee the changes that are necessary for the company to remain relevant among young users in developed nations who are much ahead of their colleagues in developing nations in terms of experience. When expanding to new markets, it is also necessary for Yahoo!’s executives to consider political and other external factors that may affect them before making the choice to invest. APPENDIX COMPETITIVE PROFILE MATRIX (CPM) (Tanasa)   Works Cited David, Fred. Strategic Management Concepts and Cases. Upper Saddle River, NJ: Prentice Hall, 2011. Tanasa, Vasile. “Business Strategy ‘Yahoo!’.” 2013. http://www.academia.edu/4074184/Business_Strategy_Yahoo Read More