Yahoo and Amazon: Building a Competitive Advantage - Essay Example

Yahoo and Amazon: Building a Competitive Advantage Introduction The organizations operating in the modern day context increasingly focus on attainingsuperior competitive advantage for the purpose of reaping several significant benefits. These benefits comprise raising profitability in terms of market share and sustaining in this competitive landscape for longer period of time (Hill et al., 2014). Similarly, organizations including Amazon.com, Inc. and Yahoo! Inc. also strive to build greater competitive advantages with the intention of reaping the above demarcated benefits. Amazon is an American based international e-commerce business organization, which is viewed to be one of the biggest online retailers throughout the globe. Amazon.com mainly deals with products such as tablets, books, luggage bags, sunglasses, fashion jewelries and watches among others (Amazon.com, Inc., 2014). Correspondingly, Yahoo is the other American based multinational internet business corporation, which was established in the year 1994 dealing with the products and/or services like Yahoo! Mail, Yahoo! Sports and Yahoo! Weather among others (Yahoo, 2014). With these considerations, the essay intends to review the two cases provided i.e. “How Amazon.com became the leading online retailer by 2011” and “Is Yahoo!’s business model working in 2011?” that would aid in determining the way in which Amazon and Yahoo have been able to build superior competitive advantages. 1. History and Core Business of Amazon.com and Yahoo! Based on the case study provided, it can be ascertained that Amazon.com was established in the year 1995, which developed from a potential online bookseller to a lucrative retail supercenter, selling diverse range of essential products. The mission of this organization is building such an online retail store, which will be quite customer-friendly, easy to navigate and most importantly which offers products with affordable prices. After acquiring a brief idea about the history of Amazon.com, it has been apparently recognized from the case study provided that the core business of Amazon is selling books online. It is worth mentioning that by taking into concern the growing usage of the internet amid people, Amazon.com has desired to conduct its business with a strong belief of attracting people in terms of providing them books in affordable costs through the use of the medium of internet (Jones, 2011). Yahoo! was established in the year 1994, which has over the years transformed into one of the foremost market leaders operating in the internet based industry in this present day context. In accordance with the provided case study, it can be ascertained that the organization became the most-visited entryway into the World Wide Web (WWW) across the globe. This can be justified with reference to the fact that in excess of 144 million pages were viewed by the people daily, which resulted in earning revenue of US$6.4 billion in the year 2006. One of the core businesses of Yahoo is identified to be ‘media and communication.’ In this globalization and technology driven era, ‘media and communication’ is playing an imperative role in developing economies of varied nations of the world. This can be affirmed as one of the reasons due to which Yahoo is investing a substantial amount of revenue in this particular core business (Hill & Jones, 2012). 2. Impact of Key Strategic Differences on Success of Amazon.com & Yahoo! It is quite evident that both Amazon.com and Yahoo have been able to accomplish their desired business targets by a considerable level despite facing financial turmoil. The key strategic differences that have impacted the relative success of both Amazon.com and Yahoo! are developing customers’ experiences in terms of offering them with low or affordably priced products and investing substantial amounts on making technological improvements. For instance, the key strategic difference of developing customers’ experiences has impacted the success of both Amazon.com and Yahoo! through the mode of enlarging their customer base. Justifiably, through focusing on advancing customers’ experiences, Amazon.com was recognized as one of the biggest retailers selling books through the internet medium throughout the globe particularly in the year 2010. On the other hand, emphasizing this aspect, Yahoo! has been able to attract several customers in the form of viewing online pages of the organization daily which in turn has facilitated to raise its revenue (Jones, 2011). It is worth mentioning that the other strategic difference concerning investing substantial amounts on making technological improvements has facilitated both Amazon.com and Yahoo! to attain success. For instance, this particular strategic difference has enabled Amazon.com to develop its value chain procedure, which has resulted in smooth delivery of the products to the customers, thereby raising profitability of the organization at large. Conversely, focusing on the strategic difference of making huge investments on technological improvements, Yahoo! became the most visited web portal in the year 2006, which facilitated it to attain maximum profitability in terms of market share (Hill & Jones, 2012). 3. Comparison and Contrast of Strategic Planning Approaches Pursued by Amazon.com and Yahoo! From the case studies evaluated, it is quite apparent that both Amazon.com and Yahoo have adopted certain intended and emergent strategies for the purpose of building their respective competitive advantages. In this similar context, based on the provided case study, it has been ascertained that one of the intended strategies adopted by Amazon.com for building greater competitive advantage was developing its value chain procedure. It can be affirmed that this particular intended strategy of Amazon.com has certainly facilitated the organization to build superior competitive advantages through lessening operational costs, improvising its products and making the same available to the customers in any location at any point of time. Apart from this, it can also be observed from the case study provided that Amazon.com has adopted an emergent strategy of acquiring several small companies that are specialized operating in retail as well as information technology (IT) business segments. Subsequently, this strategy has enabled Amazon.com to build greater competitive advantage in the form of utilizing the available resources efficiently and most vitally maintaining its profit growth throughout every financial year (Jones, 2011). In contrast, based on the case study provided, one of the intended strategies adopted by Yahoo! to build superior competitive advantages was spending much on advertising and utilizing television and/or radio advertisements targeted at mainstream America. This eventually supported the organization to attain superior competitive position in terms of enlarging the range of internet communication services that are to be provided to the clients. Apart from this, Yahoo! has also adopted an emergent strategy of forming a strategic alliance especially with Microsoft in the year 2009 with the intention of building greater competitive advantage. The organization i.e. Yahoo strongly believed that this emergent strategy would not only help in attaining superior competitive position but would also aid in coping up with intense business market competition, which is quite prevalent in this modern day context (Hill & Jones, 2012). 4. Analysis of Distinctive Competencies in Shaping the Strategies Pursued by Amazon.com and Yahoo! Specially mentioning, the implementation of the policies concerning decentralizing important decision-making authority to personnel and empowering them towards finding out methods to comply with customers’ requirements promptly can be regarded as the distinctive competencies of Amazon.com that have aided in shaping both intended as well as emergent strategies which the organization has pursued. This can be justified from the provided case study that the competencies discussed above eventually made the organization to develop its interior resources such as value chain procedure, enabling it to build superior competitive advantages over others (Jones, 2011). Conversely, based on the provided case study, it can be affirmed that focusing on advancing search software of Yahoo and improving the capability of offering high-quality targeted advertising are certain distinctive competencies of Yahoo that have aided in shaping both the intended as well as emergent strategies pursued by the organization. Justifiably, the above identified distinctive competencies have made the organization to attract more customers and most importantly to raise higher advertising revenues which in turn has aided it to obtain higher competitive advantage as compared to others (Hill & Jones, 2012). 5. Recommendation of One Functional Level Strategy Each to Amazon.com and Yahoo! Functional level strategy is mainly linked with functional operations and the actions engaged therein, which facilitates to provide a set of objectives for conducting specific business functions efficiently (Daft, 2009). In this regard, with reference to the case studies provided, certain significant and effective functional level strategies have been suggested to both Amazon.com as well as Yahoo!. Specially mentioning, the suggested functional level strategies will prescribe certain ways based on which these two organizations can ensure superior efficiency, innovation, customer responsiveness and most vitally quality. Correspondingly, the functional level strategy of product innovation can be suggested to Amazon.com. Conceptually, the strategy relating to product innovation refers to making improvements of a particular product and/or service after assessing altering business market conditions and customers’ preferences. This particular strategy may prescribe certain potential ways through which Amazon.com can ensure the above discussed aspects at large. In this context, the ways might include understanding the needs of the customers, identifying the factors leading towards driving operational efficiency and recognizing the costs that are actually incurred while performing any sort of operational functions. It is projected that these ways might aid Amazon.com to ensure superior efficiency, quality along with innovation and customer responsiveness in the form of raising the satisfaction level of customers along with complying with their respective requirements efficiently (Cooper, 2009). Similar to Amazon.com, another functional strategy has been recommended to Yahoo based on which the organization can be able to attain superior efficiency as well as customer responsiveness, deliver quality products and promote innovation. Subsequently, the suggested functional strategy to Yahoo is process improvement strategy. Theoretically, the functional strategy of process improvement denotes enhancing the operational procedures of varied organizations towards the attainment of their respective predetermined business targets. It is worth mentioning that this particular strategy may prescribe certain ways based on which the organization is able to reap the above discussed benefits. In this similar concern, the ways may entail determining as well as finding out techniques to eliminate wastes, addressing any sort of inefficiency inherent within the operational procedures of Yahoo and upholding a favorable culture amid the management team and the stakeholders. It is strongly believed that these ways will aid Yahoo to ensure superior efficiency, quality along with innovation and customer responsiveness by establishing a process improvement based culture through which the performance of the personnel might get developed and advancing its supply chain procedure (Madison, 2005). Conclusion Based on the foregoing analysis and discussion, it can be comprehended that both Amazon.com and Yahoo have been able to attain greater success and have successfully built superior competitive advantages by the execution of intended and emergent strategies. However, in this present day context wherein the business market conditions are incessantly changing, it is becoming quite hard for these organizations to attain greater efficiency along with customer responsiveness and to promote innovation. In response, certain functional level strategies including process improvement and product innovation have been recommended to these two organizations that might aid them in fulfilling such significant targets in upcoming years. References Amazon.com, Inc. (2014). About us. Retrieved from http://www.amazon.in/b/ref=gw_m_b_corporate?ie=UTF8&node=1592138031 Cooper, R. G. (2009). Product innovation and technology strategy. United States: Stage-Gate International. Daft, R. (2009). Management. United States: Cengage Learning. Hill, C., Jones, G., & Schilling, M. (2014). Strategic management: Theory: An integrated approach. United States: Cengage Learning. Hill, C., & Jones, G. (2012). Strategic management cases: An integrated approach. United States: Cengage Learning. Jones, G. R. (2011). How Amazon.com became the leading online retailer by 2011. Case 21. C272-C284. Madison, D. (2005). Process mapping, process improvement, and process management: a practical guide for enhancing work and information flow. United States: Paton Professional. Yahoo. (2014). Products & services. Retrieved from https://info.yahoo.com/products-services Read More