Yahoo Company Strategic Management and Competitiveness

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Globalization and technology changes and influences on Yahoo Inc

Yahoo Inc. is a public software company whose major product is advertising space on its online properties and services. The significant technological changes influencing Yahoo Inc. include the development of Web 2.0 internet solutions that ushered the use of the Internet as an entertainment and social platform, besides promoting multimedia content. As a result, companies like Yahoo Inc. increased their product portfolio from offering search results to include advertisements. The technology also allowed Yahoo to come up with several online properties, such as a Yahoo finance portal that can capture users of various interests.

The development of smartphones and the growth of independent mobile operating systems that support apps have allowed Yahoo to launch dedicated apps for iOS and Android, thereby allowing it to deliver a rich experience for users of its various properties, such as Yahoo games, local news, and Yahoo answers. The company has also combined the capabilities of Web 2.0 and mobile apps to increase its range of digital content and enter into the traditional media company business of selling news and entertainment. However, the Yahoo business model remains advertiser-based (KPMG, 2011).

Growth in social media as a global phenomenon has also presented business opportunities for Yahoo to sell image-rich native ad spaces on its mobile apps to leverage the users’ need to share and self-actualize.

The recognition of internal laws on intellectual properties allows the company to operate in several countries without risking critical resource theft. The provisions have allowed Yahoo Inc. to expand its client base beyond the United States. On the other hand, Yahoo Inc. has had to remain very innovative as it grows because the increased flow of information across the globe has also made it easier for new competitors to achieve a global or regional presence. Currently, Yahoo Inc. has to consider the implications of business actions of its competitors from Asia, Europe, the Middle East, and Latin America that also offer search, communication, and other commercial services. The company was forced to develop localized portals for different markets to respond to the threat.

Application of industrial organization model and the resource-based model to determine how Yahoo Inc. could earn above-average returns

Industrial organization model

The external environment for Yahoo Inc. includes government policies and legal statutes. Its industrial environment includes users and advertisers, as well as content developers and device manufacturers. The competitive environment has other companies, such as Google, selling online advertising space. The industry is attractive because of the low cost of operations and the ease of using innovative options to grow revenue (Jurgenson, 2012).

Currently, Yahoo’s strategy is to dominate the Internet with its digital properties targeting users of different niches and relying on various technologies. The company has been running a talent recruitment program for nurturing employees so that they remain innovative. At the same time, the company can continue making acquisitions that bring in new employees and marketable solutions to advance its business (Yahoo Inc., 2014).

Consequently, the company has been using its resources to launch new products and improve the existing ones so that clients are satisfied and committed to relying on Yahoo Inc. for their business growth. Some acquisitions are not generating returns for the company, but they provide considerable resources for research and new product development that can become future earners for the enterprise (Hill, Jones, & Schilling, 2014). Current working product resources that yield revenues for the firm are Yahoo Gemini, Yahoo Ad Manager Plus, APT, BrightRoll, Flurry, and Yahoo Ad Exchange.

They run on a range of Yahoo Inc. properties like Flickr, Tumblr, Yahoo Finance, Yahoo Weather, Yahoo News, Yahoo Entertainment, and Yahoo Lifestyles. The strategy allows Yahoo to generate revenues from individual countries around the world and rely on third-party resellers of advertising space to allow Yahoo Inc. to tap into other digital properties that are popular in different markets (Yahoo Inc., 2014).

Resource-based view

Internal resources that help Yahoo Inc. have a competitive advantage are its people and its digital properties. The company sells advertising space, and it has relied on technology to ensure that its solutions for clients are unique and rewarding to their businesses. Currently, it has Yahoo advertising, which offers search, video, native, and display advertisement products. However, merely having these options for selling advertisement only gives the company the competitive threshold capabilities for its industry. The company has also been working on its human resources to become competitively sustainable. Yahoo Inc. maintains a recruitment program to get the best-skilled employees in product development and company management.

The resource is non-imitable and organizable. As a result, Yahoo Inc. has been creating innovative products that increase its presence in the online digital advertising solutions market. As the company becomes a major player, it faces stiff competition from new entrants who do not face severe entry barriers. Yahoo Inc. makes the acquisition of companies that offer strategic solutions to its current business to cement its position. The option to acquire other companies ensures that they are not available to provide solutions for rivals. Secondly, the companies bring talented staff and technological solutions that increase the business capacities of Yahoo Inc. In this regard, acquisitions have been a source of getting above-average returns. Based on the VRIO framework of the resource-based view theory, the acquisitions are valuable, rare, and organizable (Stringham, 2012). They can be imitated, but doing so depends on market conditions and would not match the exact capacities of Yahoo Inc.

Yahoo relies on sales professionals to bring business in its United States’ operations. Having salespersons is not a distinctive competitive advantage, but their organization, training, and compensation offer Yahoo an edge. New entrants and small companies cannot match their expenditure on the sales workforce; they require time to develop similar promotion capacities. On the other hand, Yahoo Inc. can continue increasing its digital properties and giving its sales professionals more options for finding new advertising clients or upselling existing customers. As a result, the company has a diversified revenue base that is sustained throughout the long-term. Based on this review, the sales professionals’ department at Yahoo is a resource meeting the VRIO thresholds, which will allow the company to earn above-average returns (Stringham, 2012).

Assessment of how the vision statement and mission statement of Yahoo Inc. influence its overall success

The vision statement of the company is to be part of users’ digital habits in various products and platforms as a powerful tool that allows the company to be engaged in the development of universal brand loyalty. Its mission statement is to enable advertisers to build their businesses through the Yahoo online properties business and its distribution networks that include affiliates.

The vision of the company enables Yahoo to maintain a focus on the provision of user solutions that are inspiring and entertaining. The company has to mirror the vision in its internal composition by seeking to recruit and retain talented individuals for various job positions and provide inspiration and develop entertaining products for users. The company then sells the target user base to advertisers. The mission statement is influencing the way Yahoo Inc. operates.

Evaluation of how each category of stakeholder influences the overall success of this corporation

Yahoo Inc. stakeholders are users of its digital properties, shareholders, advertisers on the digital properties, and content publishers acting as affiliates of various Yahoo Inc. advertising products. Employees and third party content producers are also stakeholders. Growth in the number of users increases the attractiveness of the Yahoo-advertising platform. Therefore, any action by users that leads to a decrease in the popularity of the company’s digital properties threatens the business. Users, as external stakeholders, can be organized and demand specific business practices from Yahoo Inc. They may also be represented by their respective governments that can enact laws or pass regulations that increase or decrease opportunities for Yahoo Inc. to do business.

Also, employees as internal stakeholders determine whether Yahoo can meet its objectives by working innovatively and optimally. The actions of the employees that can lead to an increase in the costs of doing business will affect the company’s options for earning above-average returns. Shareholders have the biggest power to influence executive decisions by the enterprise and in an organized form; they can compel the company to focus on the short-term or long-term goal in growth and profitability (O’Brien, 2015).

References

Hill, C., Jones, G., & Schilling, M. (2014). Strategic management theory: An integrated approach (11th ed.). Stamford, CT: Cengage Learning. Web.

Jurgenson, N. (2012). When atoms meet bits: Social media, the mobile web and argumented revolution. Full Internet, 4(1), 83-91. Web.

KPMG. (2011). Going social: How businesses are making the most of social media. Web.

O’Brien, M. (2015). Yahoo stakeholder turns up pressure on Marissa Mayer. San Jose Mercury News. Web.

Stringham, S. (2012). Strategic leadership and strategic management: Leading and managing change. Bloomington, IN: iUniverse. Web.

Yahoo Inc. (2014). Form 10-K: Yahoo Inc. Web.

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