Category: Yahoo

Executive summary

Comparisons of Yahoo Inc and other web based search engine companies have been made. Yahoo Inc has times been accused of sleeping on the job by failing to utilize the booming of internet technology. As a result, the performance of the company has been wanting over the last five years until it adopted a new business direction as indicated by a new company vision statement. These kinds of strategies demonstrate what is expected of companies competing on the edge. They have to contend with unpredictability in the market usually defined as a borderline between order and chaos.

Introduction

This is definitely one f the most common brand names in the World Wide Web. Since its inception in 1995, the company has registered very impressive growth both in terms of revenue and profits and in company portfolio and product range. In my fulfillment of my module, MGMT20112, I am required to carry out a study of Yahoo Inc about the corporate strategies that the company employs. The company is analyzed from a perspective of competing on the edge. Much of these strategies have been studied in theory in class and therefore this report discusses the corporate strategies in practice at Yahoo Inc and aligns them to the studied corporate strategy models.

In this context, we take Lagnevik (2003) definition of strategy as the business direction adopted by the management in achieving its long and short term objectives as stated in the companys mission and vision statement.

Industry overview

Internet based companies have increased over the last decade as facilitated by the invention of the World Wide Web and the internet. Companies such as yahoo and Google have become synonymous with the web. Their strong brand names have made it hard to alienate the World Wide Web searching industry from the two main players in the industry. Revenue in this field in predominantly obtained from online advertising due to the wide reach of the web. Technologic growth and product innovativeness in the industry has been the core driver of this industry relying heavily on advertisement for their revenue generation.

As of 2008, the global market search engine market was as shown below

Company overview

The company was started in 1994 by two students, Jerry Yang and David Filo as a hobby. Headquartered in Sunnyvale, California, it operates in more than 20 markets and regions globally with over 500 million users annually.

Vision statement

After years of restructuring and repositioning in the market to include a variety of services, the company has adopted a new mission statement as To connect people to their passions, communities, and the worlds knowledge

Mission statement

Lagnevik (2003) defines mission as what an organization views as its role in society or the industry. Yahoo identifies its role as power and delight our communities of users, advertisers, and publishers  all of us united in creating indispensable experiences, and fueled by trust.

Values

The website the following as the companys values:

• Excellence- belief in quality and customer satisfaction
• Innovation- anticipates the needs and wishes of their market and develops products and services to meet the identified needs and wishes
• Customer fixation- provide a wide range of quality products and thereby maintain customer loyalty and trust
• Teamwork- employee empowerment and mutual respect for contribution to the common good
• Community- impact on community and all stakeholders
• Fun- dwells on the easy side of life.

Strategic analysis

As an organization with a multinational presence, Yahoos scope is wide in terms of the factors that influence or rather determines its position in the market as influenced by a number of factors both internal and external. For internal factors, we assess the companys organizational culture, company structure, management etc which is best captured by the SWOT analysis. External factors in this case will include political, environmental, legal etc as captured by the PESTLE analysis tool to be discussed later in the paper. Therefore we perform the PEST and SWOT analysis test of Yahoo.

SWOT analysis test

This is an acronym for strengths, weaknesses, opportunities and threats test. Lagnevik (2003) informs us only strengths and weaknesses under this analysis capture the internal environment. Thus we handle strengths and weaknesses as internal environment.

Strengths and weaknesses

Strengths

• Innovativeness. The company has developed many services such as online games, online personals and other search channels such as Yahoo shopping. This is line with what was introduced in 2004 as creating an internet theme park in the name of Yahoo.
• Competent management. The fact that Yahoo is able to identify problematic areas in management points to the reason why it out performs its competitors. The hiring of Semel in 2004 as the companys CEO shows that under the chairmanship of Jerry Yang, the management is able to notice where change is needed most and strategically make the most beneficial option.
• Wide services range. With the strategy of developing an internet theme park, it has increased product portfolio and thus able to reach a wider market.

The companys financial strength gives it an upper hand in management and acquisition of resources such as the acquisition of Musicmatch in 2004 for $160 million

Weaknesses

• The company has been unable to strategically convert its strong brand name into complete dominance in the market.
• Has failed to horizontally integrate and s form strategic alliances with competing players such as the recent failed negotiations with Microsofts MSN. This would lead to increased investor confidence and a larger market share, but the collapse of the talks has ended up hurting the company stocks.
• Product/service bundling may mean that failure by one product spreads the negative effective to the whole company.

PESTLE analysis

This analysis tool is an acronym for political, economic, socio-cultural, technologic, legal and environmental factors that influence business decisions and have an impact on an a organizations competitiveness. All these factors comprise the external environment together with opportunities and threats.

Political factors

The company operates in many countries exposing it to varying political climates that have varying degrees of influence on company strategy.

Economic factors

The fact that the company has a wide market favors it due to economies of scale in developing products and services for a large market.

Global economic growth is favoring internet and web accessibility in developing markets.

Socio-cultural

Adoption of the web as a social networking system increases the market reach of yahoo and the industry as a whole.

Fashion trends are delegating some functions to internet based companies such as shopping online and making friends.

Technologic

• Invention of the broad band connection increases the market share of Yahoo and the industry as a whole
• Increased availability and access to internet connection in developing and underdeveloped countries is creating new markets for the company

Legal factors

Moral and ethical concerns considerations in web use and access of unauthorized sites

Environmental

Increased environmental awareness has increase the role of companies and expenditure of corporate social responsibilities towards environmental conservation

Opportunities and threats

Opportunities

• Increased accessibility of the net and the world web around the globe
• Increased us online advertising by firms
• High technologic growth rate gives room for product innovation and improvement

Threats

• The decline in the World Wide Web industry
• Nature of the market in that it is unpredictable
• Fierce competition from other players

Strategic fit

With the Yahoo operating in the above environment, the company has managed to adopt strategies that minimize the companys weaknesses and manages the treats while at the same time making use of opportunities presents and building their growth around their strengths to turn them into key competences that will add on the companys competitive advantage.

Product innovation has centered on both fun and serious matters as shown by games music and other forms of entertainment. Again, Yahoo is marketing itself as a valid search engine to challenge Google Inc. This goes a long way in helping the company achieve its vision.

Competing on the edge

Competing on the edge can generally be said to be competing in an industry where room for product and service variation is minimal but any variation in product or service has a very high impact on the performance of the organization as a whole. Lagnevik (2003) says that competing on the edge implies that the involved market is subject to unpredictable change and the ability to keep on changing and inventing products/services adds on a firms competitive advantage. He says that the strategies adopted by players in such a market gain on the rather elusive edges by keeping pace with time as dictated by fashion and technology and other externalities and shaping a semi-coherent direction for the organization. The emphasis on semi coherent in this type of market is because market research studies do not give exact figures or show the true picture of the market situation due to time factor. Therefore, competing on the edge refers to making of competitive strategies that are sparing based on available data which is considered ordered and speculated situation that is not definitively expounded hence referred to as chaos. In the search engine industry, the preferences or the consistency in items or information searched do not follow a specific patter hence in chaos as it is not ordered like in other cotemporary markets.

Yahoo and Fable

According to the case study on Yahoo, the growth that the company has achieved in the last several years is attributed to the hiring of Semel who restored the organization from a slacking path to a path of momentous growth. According to the case study on Fable, the idea is seeking something and introducing it into the organization. New items or resources are in the case identified as new employees, new markets and even new customers. From the Yahoo case study, the idea of introducing a Semel into the company was very beneficial. This confirms what the Fable case study shows that introduction of something new in an organization re-energizes the company and puts it back into the growth path again. Semel had no prior knowledge of the World Wide Web industry but Jerry Yung surprised stakeholders by bringing someone new with no prior experience in the industry. His appointment according to the Yahoo case study was met with a lot of criticism by stakeholders at a time when the company was losing its market share. Other employees were not even happy with the ideas and management systems introduced by Semel.

With the entry of Semel in Yahoo, no employees are reported to have been sucked but only a bit of reorganization with the stepping down of Filo as president. This is another similarity with the Fable case. In the Fable case, a new employee of products in added on top of the existing one with no major product or services being scraped. New services added help in making the older services even look more attractive. Semel was added to Yahoo on top of existing employees who in turn added other services into the organization without discarding the existing products and services. He went on and added music downloading and other online personals to the already existing product/service portfolio at Yahoo. The result was that the company registered impressive. In actual sense we can say that Semel aligned Yahoos business with emerging market opportunities the way Colley, Jacqueline, and Hardie, (2004) propose.

The Yahoo case does not fit well with the case of Midas. This is because Midas model proposes the use of experienced staff in providing continuity between past successful strategies in certain projects and future projects where success is crucial. In the Yahoo case, growth and specifically growth of 15% in Sunnyvale was mainly attributed to the strategies adopted by Semel as there is no reference made of employees existing before Semels entry.

References

Colley, J., Jacqueline, L. and Hardie, R. (2004) Corporate strategy, (New York, MaGraw Hill)

Brown, S. and Eisenhardt, K.(1998), Competing on the Edge: Strategy as Structured Chaos, (New York: Harvard Business School)

Lagnevik, M. (2003), The dynamics of innovation clusters, (London, Edward Elgar)

Lapier, Terrence (1998), Competition, Growth Strategies, and the Globalization of Services, (London, Routledge)

Executive summary

Comparisons of Yahoo Inc and other web based search engine companies have been made. Yahoo Inc has times been accused of sleeping on the job by failing to utilize the booming of internet technology. As a result, the performance of the company has been wanting over the last five years until it adopted a new business direction as indicated by a new company vision statement. These kinds of strategies demonstrate what is expected of companies competing on the edge. They have to contend with unpredictability in the market usually defined as a borderline between order and chaos.

Introduction

This is definitely one f the most common brand names in the World Wide Web. Since its inception in 1995, the company has registered very impressive growth both in terms of revenue and profits and in company portfolio and product range. In my fulfillment of my module, MGMT20112, I am required to carry out a study of Yahoo Inc about the corporate strategies that the company employs. The company is analyzed from a perspective of competing on the edge. Much of these strategies have been studied in theory in class and therefore this report discusses the corporate strategies in practice at Yahoo Inc and aligns them to the studied corporate strategy models.

In this context, we take Lagnevik (2003) definition of strategy as the business direction adopted by the management in achieving its long and short term objectives as stated in the companys mission and vision statement.

Industry overview

Internet based companies have increased over the last decade as facilitated by the invention of the World Wide Web and the internet. Companies such as yahoo and Google have become synonymous with the web. Their strong brand names have made it hard to alienate the World Wide Web searching industry from the two main players in the industry. Revenue in this field in predominantly obtained from online advertising due to the wide reach of the web. Technologic growth and product innovativeness in the industry has been the core driver of this industry relying heavily on advertisement for their revenue generation.

As of 2008, the global market search engine market was as shown below

Company overview

The company was started in 1994 by two students, Jerry Yang and David Filo as a hobby. Headquartered in Sunnyvale, California, it operates in more than 20 markets and regions globally with over 500 million users annually.

Vision statement

After years of restructuring and repositioning in the market to include a variety of services, the company has adopted a new mission statement as To connect people to their passions, communities, and the worlds knowledge

Mission statement

Lagnevik (2003) defines mission as what an organization views as its role in society or the industry. Yahoo identifies its role as power and delight our communities of users, advertisers, and publishers  all of us united in creating indispensable experiences, and fueled by trust.

Values

The website the following as the companys values:

• Excellence- belief in quality and customer satisfaction
• Innovation- anticipates the needs and wishes of their market and develops products and services to meet the identified needs and wishes
• Customer fixation- provide a wide range of quality products and thereby maintain customer loyalty and trust
• Teamwork- employee empowerment and mutual respect for contribution to the common good
• Community- impact on community and all stakeholders
• Fun- dwells on the easy side of life.

Strategic analysis

As an organization with a multinational presence, Yahoos scope is wide in terms of the factors that influence or rather determines its position in the market as influenced by a number of factors both internal and external. For internal factors, we assess the companys organizational culture, company structure, management etc which is best captured by the SWOT analysis. External factors in this case will include political, environmental, legal etc as captured by the PESTLE analysis tool to be discussed later in the paper. Therefore we perform the PEST and SWOT analysis test of Yahoo.

SWOT analysis test

This is an acronym for strengths, weaknesses, opportunities and threats test. Lagnevik (2003) informs us only strengths and weaknesses under this analysis capture the internal environment. Thus we handle strengths and weaknesses as internal environment.

Strengths and weaknesses

Strengths

• Innovativeness. The company has developed many services such as online games, online personals and other search channels such as Yahoo shopping. This is line with what was introduced in 2004 as creating an internet theme park in the name of Yahoo.
• Competent management. The fact that Yahoo is able to identify problematic areas in management points to the reason why it out performs its competitors. The hiring of Semel in 2004 as the companys CEO shows that under the chairmanship of Jerry Yang, the management is able to notice where change is needed most and strategically make the most beneficial option.
• Wide services range. With the strategy of developing an internet theme park, it has increased product portfolio and thus able to reach a wider market.

The companys financial strength gives it an upper hand in management and acquisition of resources such as the acquisition of Musicmatch in 2004 for $160 million

Weaknesses

• The company has been unable to strategically convert its strong brand name into complete dominance in the market.
• Has failed to horizontally integrate and s form strategic alliances with competing players such as the recent failed negotiations with Microsofts MSN. This would lead to increased investor confidence and a larger market share, but the collapse of the talks has ended up hurting the company stocks.
• Product/service bundling may mean that failure by one product spreads the negative effective to the whole company.

PESTLE analysis

This analysis tool is an acronym for political, economic, socio-cultural, technologic, legal and environmental factors that influence business decisions and have an impact on an a organizations competitiveness. All these factors comprise the external environment together with opportunities and threats.

Political factors

The company operates in many countries exposing it to varying political climates that have varying degrees of influence on company strategy.

Economic factors

The fact that the company has a wide market favors it due to economies of scale in developing products and services for a large market.

Global economic growth is favoring internet and web accessibility in developing markets.

Socio-cultural

Adoption of the web as a social networking system increases the market reach of yahoo and the industry as a whole.

Fashion trends are delegating some functions to internet based companies such as shopping online and making friends.

Technologic

• Invention of the broad band connection increases the market share of Yahoo and the industry as a whole
• Increased availability and access to internet connection in developing and underdeveloped countries is creating new markets for the company

Legal factors

Moral and ethical concerns considerations in web use and access of unauthorized sites

Environmental

Increased environmental awareness has increase the role of companies and expenditure of corporate social responsibilities towards environmental conservation

Opportunities and threats

Opportunities

• Increased accessibility of the net and the world web around the globe
• Increased us online advertising by firms
• High technologic growth rate gives room for product innovation and improvement

Threats

• The decline in the World Wide Web industry
• Nature of the market in that it is unpredictable
• Fierce competition from other players

Strategic fit

With the Yahoo operating in the above environment, the company has managed to adopt strategies that minimize the companys weaknesses and manages the treats while at the same time making use of opportunities presents and building their growth around their strengths to turn them into key competences that will add on the companys competitive advantage.

Product innovation has centered on both fun and serious matters as shown by games music and other forms of entertainment. Again, Yahoo is marketing itself as a valid search engine to challenge Google Inc. This goes a long way in helping the company achieve its vision.

Competing on the edge

Competing on the edge can generally be said to be competing in an industry where room for product and service variation is minimal but any variation in product or service has a very high impact on the performance of the organization as a whole. Lagnevik (2003) says that competing on the edge implies that the involved market is subject to unpredictable change and the ability to keep on changing and inventing products/services adds on a firms competitive advantage. He says that the strategies adopted by players in such a market gain on the rather elusive edges by keeping pace with time as dictated by fashion and technology and other externalities and shaping a semi-coherent direction for the organization. The emphasis on semi coherent in this type of market is because market research studies do not give exact figures or show the true picture of the market situation due to time factor. Therefore, competing on the edge refers to making of competitive strategies that are sparing based on available data which is considered ordered and speculated situation that is not definitively expounded hence referred to as chaos. In the search engine industry, the preferences or the consistency in items or information searched do not follow a specific patter hence in chaos as it is not ordered like in other cotemporary markets.

Yahoo and Fable

According to the case study on Yahoo, the growth that the company has achieved in the last several years is attributed to the hiring of Semel who restored the organization from a slacking path to a path of momentous growth. According to the case study on Fable, the idea is seeking something and introducing it into the organization. New items or resources are in the case identified as new employees, new markets and even new customers. From the Yahoo case study, the idea of introducing a Semel into the company was very beneficial. This confirms what the Fable case study shows that introduction of something new in an organization re-energizes the company and puts it back into the growth path again. Semel had no prior knowledge of the World Wide Web industry but Jerry Yung surprised stakeholders by bringing someone new with no prior experience in the industry. His appointment according to the Yahoo case study was met with a lot of criticism by stakeholders at a time when the company was losing its market share. Other employees were not even happy with the ideas and management systems introduced by Semel.

With the entry of Semel in Yahoo, no employees are reported to have been sucked but only a bit of reorganization with the stepping down of Filo as president. This is another similarity with the Fable case. In the Fable case, a new employee of products in added on top of the existing one with no major product or services being scraped. New services added help in making the older services even look more attractive. Semel was added to Yahoo on top of existing employees who in turn added other services into the organization without discarding the existing products and services. He went on and added music downloading and other online personals to the already existing product/service portfolio at Yahoo. The result was that the company registered impressive. In actual sense we can say that Semel aligned Yahoos business with emerging market opportunities the way Colley, Jacqueline, and Hardie, (2004) propose.

The Yahoo case does not fit well with the case of Midas. This is because Midas model proposes the use of experienced staff in providing continuity between past successful strategies in certain projects and future projects where success is crucial. In the Yahoo case, growth and specifically growth of 15% in Sunnyvale was mainly attributed to the strategies adopted by Semel as there is no reference made of employees existing before Semels entry.

References

Colley, J., Jacqueline, L. and Hardie, R. (2004) Corporate strategy, (New York, MaGraw Hill)

Brown, S. and Eisenhardt, K.(1998), Competing on the Edge: Strategy as Structured Chaos, (New York: Harvard Business School)

Lagnevik, M. (2003), The dynamics of innovation clusters, (London, Edward Elgar)

Lapier, Terrence (1998), Competition, Growth Strategies, and the Globalization of Services, (London, Routledge)

In the presented study, the issues of the right approach towards the negotiation, the importance of the team, and the ability to find new ways of resolving a problem after a failure are addressed by the former president of the Yahoo Company.

At the beginning of the 2000s, US companies began to penetrate the Chinese market. However, there were few deals, and Chinese rivals were more successful in the market. Moreover, the Internet as an industry was not as developed as in the USA. The company experienced difficulties in gaining revenue, and the management style of the entrepreneur was also perceived negatively by the companys staff.

The alternatives were either to continue working with the aggressive manager, to hire new staff, to close the deal, or to find a new company to collaborate with. The Yahoo Company decided that a new company would possibly resolve the problem of difficult market positions. Nevertheless, it was a risk.

In this case, the success of the deal was supported by the specifics of the negotiation between the Yahoo Company and new managers. As the former president of the company notices, the founder of the Alibaba Company impressed them with his management philosophy. It is often the case that companies with different visions and approaches cannot effectively operate and build a business, even if it is potentially profitable. In this case, the alignment between the Yahoo and the Alibaba administrations led to a favorable deal. Due to good relationships with the founder, the companys negotiations with Alibaba were facilitated, and the joint venture was created.

The ability to recognize mistakes and learn from them was one of the key approaches that helped the company succeed in the market, argues the author.

The importance of negotiation and cultural agents is also underlined by the author of the article. As Sue Decker explains, the company had to agree to abandon their previous control approach in favor of the Chinese colleagues who insisted on it. As it turned out, such an approach was standard in the Chinese Internet and media industry. Here, the company could have refused, but eventually, the deal would end in the same way as their previous one did  with little to no success. Therefore, the company chose another approach to the existing norms in business in China and only profited from it. Any alternative to this decision would have resulted in a complete failure, just as it was with 3721. Although the company agreed to give up control over many procedures in 3721, it was not enough for the local team to compete with Chinese rivals. Therefore, in the new deal with Alibaba, the company had no other option but to give up all control they had over the local operations. What is more, employee issues were also resolved by the partner, who had no previous connection to the company. Nevertheless, the deal brought revenues and success because the companys leadership teams aligned in the approach towards business. Chinese leaders were open to the suggestions and U.S. methods of business management. Due to this ability to negotiate, the two companies were able to work on the issues that emerged in the market and become serious competitors to other Chinese companies.

Thus, the understanding of local complexities and features of the market can greatly improve an outsiders business, but only if a foreign company is willing to accept the rules.

Executive summary

Comparisons of Yahoo Inc and other web based search engine companies have been made. Yahoo Inc has times been accused of sleeping on the job by failing to utilize the booming of internet technology. As a result, the performance of the company has been wanting over the last five years until it adopted a new business direction as indicated by a new company vision statement. These kinds of strategies demonstrate what is expected of companies competing on the edge. They have to contend with unpredictability in the market usually defined as a borderline between order and chaos.

Introduction

This is definitely one f the most common brand names in the World Wide Web. Since its inception in 1995, the company has registered very impressive growth both in terms of revenue and profits and in company portfolio and product range. In my fulfillment of my module, MGMT20112, I am required to carry out a study of Yahoo Inc about the corporate strategies that the company employs. The company is analyzed from a perspective of competing on the edge. Much of these strategies have been studied in theory in class and therefore this report discusses the corporate strategies in practice at Yahoo Inc and aligns them to the studied corporate strategy models.

In this context, we take Lagnevik (2003) definition of strategy as the business direction adopted by the management in achieving its long and short term objectives as stated in the company’s mission and vision statement.

Industry overview

Internet based companies have increased over the last decade as facilitated by the invention of the World Wide Web and the internet. Companies such as yahoo and Google have become synonymous with the web. Their strong brand names have made it hard to alienate the World Wide Web searching industry from the two main players in the industry. Revenue in this field in predominantly obtained from online advertising due to the wide reach of the web. Technologic growth and product innovativeness in the industry has been the core driver of this industry relying heavily on advertisement for their revenue generation.

As of 2008, the global market search engine market was as shown below

Company overview

The company was started in 1994 by two students, Jerry Yang and David Filo as a hobby. Headquartered in Sunnyvale, California, it operates in more than 20 markets and regions globally with over 500 million users annually.

Vision statement

After years of restructuring and repositioning in the market to include a variety of services, the company has adopted a new mission statement as “To connect people to their passions, communities, and the world’s knowledge”

Mission statement

Lagnevik (2003) defines mission as what an organization views as its role in society or the industry. Yahoo identifies its role as “power and delight our communities of users, advertisers, and publishers – all of us united in creating indispensable experiences, and fueled by trust”.

Values

The website the following as the company’s values:

• Excellence- belief in quality and customer satisfaction
• Innovation- anticipates the needs and wishes of their market and develops products and services to meet the identified needs and wishes
• Customer fixation- provide a wide range of quality products and thereby maintain customer loyalty and trust
• Teamwork- employee empowerment and mutual respect for contribution to the common good
• Community- impact on community and all stakeholders
• Fun- dwells on the easy side of life.

Strategic analysis

As an organization with a multinational presence, Yahoo’s scope is wide in terms of the factors that influence or rather determines its position in the market as influenced by a number of factors both internal and external. For internal factors, we assess the company’s organizational culture, company structure, management etc which is best captured by the SWOT analysis. External factors in this case will include political, environmental, legal etc as captured by the PESTLE analysis tool to be discussed later in the paper. Therefore we perform the PEST and SWOT analysis test of Yahoo.

SWOT analysis test

This is an acronym for strengths, weaknesses, opportunities and threats test. Lagnevik (2003) informs us only strengths and weaknesses under this analysis capture the internal environment. Thus we handle strengths and weaknesses as internal environment.

Strengths and weaknesses

Strengths

• Innovativeness. The company has developed many services such as online games, online personals and other search channels such as Yahoo shopping. This is line with what was introduced in 2004 as creating an internet theme park in the name of Yahoo.
• Competent management. The fact that Yahoo is able to identify problematic areas in management points to the reason why it out performs its competitors. The hiring of Semel in 2004 as the company’s CEO shows that under the chairmanship of Jerry Yang, the management is able to notice where change is needed most and strategically make the most beneficial option.
• Wide services range. With the strategy of developing an internet theme park, it has increased product portfolio and thus able to reach a wider market.

The company’s financial strength gives it an upper hand in management and acquisition of resources such as the acquisition of Musicmatch in 2004 for $160 million

Weaknesses

• The company has been unable to strategically convert its strong brand name into complete dominance in the market.
• Has failed to horizontally integrate and s form strategic alliances with competing players such as the recent failed negotiations with Microsoft’s MSN. This would lead to increased investor confidence and a larger market share, but the collapse of the talks has ended up hurting the company stocks.
• Product/service bundling may mean that failure by one product spreads the negative effective to the whole company.

PESTLE analysis

This analysis tool is an acronym for political, economic, socio-cultural, technologic, legal and environmental factors that influence business decisions and have an impact on an a organization’s competitiveness. All these factors comprise the external environment together with opportunities and threats.

Political factors

The company operates in many countries exposing it to varying political climates that have varying degrees of influence on company strategy.

Economic factors

The fact that the company has a wide market favors it due to economies of scale in developing products and services for a large market.

Global economic growth is favoring internet and web accessibility in developing markets.

Socio-cultural

Adoption of the web as a social networking system increases the market reach of yahoo and the industry as a whole.

Fashion trends are delegating some functions to internet based companies such as shopping online and making friends.

Technologic

• Invention of the broad band connection increases the market share of Yahoo and the industry as a whole
• Increased availability and access to internet connection in developing and underdeveloped countries is creating new markets for the company

Legal factors

Moral and ethical concerns considerations in web use and access of unauthorized sites

Environmental

Increased environmental awareness has increase the role of companies and expenditure of corporate social responsibilities towards environmental conservation

Opportunities and threats

Opportunities

• Increased accessibility of the net and the world web around the globe
• Increased us online advertising by firms
• High technologic growth rate gives room for product innovation and improvement

Threats

• The decline in the World Wide Web industry
• Nature of the market in that it is unpredictable
• Fierce competition from other players

Strategic fit

With the Yahoo operating in the above environment, the company has managed to adopt strategies that minimize the company’s weaknesses and manages the treats while at the same time making use of opportunities presents and building their growth around their strengths to turn them into key competences that will add on the company’s competitive advantage.

Product innovation has centered on both fun and serious matters as shown by games music and other forms of entertainment. Again, Yahoo is marketing itself as a valid search engine to challenge Google Inc. This goes a long way in helping the company achieve its vision.

Competing on the edge

Competing on the edge can generally be said to be competing in an industry where room for product and service variation is minimal but any variation in product or service has a very high impact on the performance of the organization as a whole. Lagnevik (2003) says that competing on the edge implies that the involved market is subject to unpredictable change and the ability to keep on changing and inventing products/services adds on a firm’s competitive advantage. He says that the strategies adopted by players in such a market gain on the rather elusive edges by keeping pace with time as dictated by fashion and technology and other externalities and shaping a semi-coherent direction for the organization. The emphasis on semi coherent in this type of market is because market research studies do not give exact figures or show the true picture of the market situation due to time factor. Therefore, competing on the edge refers to making of competitive strategies that are sparing based on available data which is considered ordered and speculated situation that is not definitively expounded hence referred to as chaos. In the search engine industry, the preferences or the consistency in items or information searched do not follow a specific patter hence in chaos as it is not ordered like in other cotemporary markets.

Yahoo and Fable

According to the case study on Yahoo, the growth that the company has achieved in the last several years is attributed to the hiring of Semel who restored the organization from a slacking path to a path of momentous growth. According to the case study on Fable, the idea is seeking something and introducing it into the organization. New items or resources are in the case identified as new employees, new markets and even new customers. From the Yahoo case study, the idea of introducing a Semel into the company was very beneficial. This confirms what the Fable case study shows that introduction of something new in an organization re-energizes the company and puts it back into the growth path again. Semel had no prior knowledge of the World Wide Web industry but Jerry Yung “surprised” stakeholders by bringing someone new with no prior experience in the industry. His appointment according to the Yahoo case study was met with a lot of criticism by stakeholders at a time when the company was losing its market share. Other employees were not even happy with the ideas and management systems introduced by Semel.

With the entry of Semel in Yahoo, no employees are reported to have been sucked but only a bit of reorganization with the stepping down of Filo as president. This is another similarity with the Fable case. In the Fable case, a new employee of products in added on top of the existing one with no major product or services being scraped. New services added help in making the older services even look more attractive. Semel was added to Yahoo on top of existing employees who in turn added other services into the organization without discarding the existing products and services. He went on and added music downloading and other online personals to the already existing product/service portfolio at Yahoo. The result was that the company registered impressive. In actual sense we can say that Semel aligned Yahoo’s business with emerging market opportunities the way Colley, Jacqueline, and Hardie, (2004) propose.

The Yahoo case does not fit well with the case of Midas. This is because Midas’ model proposes the use of experienced staff in providing continuity between past successful strategies in certain projects and future projects where success is crucial. In the Yahoo case, growth and specifically growth of 15% in Sunnyvale was mainly attributed to the strategies adopted by Semel as there is no reference made of employees existing before Semel’s entry.

References

Colley, J., Jacqueline, L. and Hardie, R. (2004) Corporate strategy, (New York, MaGraw Hill)

Brown, S. and Eisenhardt, K.(1998), Competing on the Edge: Strategy as Structured Chaos, (New York: Harvard Business School)

Lagnevik, M. (2003), The dynamics of innovation clusters, (London, Edward Elgar)

Lapier, Terrence (1998), Competition, Growth Strategies, and the Globalization of Services, (London, Routledge)

What are the various measurements collected in Consumer Direct?

Yahoo in association with ACNielsen and ACNielsen’s Homescan panel provided the investigation of the effectiveness of using ads on the Internet for attracting households. The offered methodology as the results of the investigation is known as Yahoo Consumer Direct Powered by ACNielsen. To analyze the peculiarities of the study, it is necessary to examine the measurements which are collected in Consumer Direct (Cooper & Schindler, 2011). It is important that to examine the real situation in the field new metrics were provided. That is why the Consumer Direct was worked out depending on the new powerful metrics.

To realize the research, two groups of participants in the study were developed (the test group and control group of households). The test group was analyzed according to the principles of such two metrics as the effectiveness of ad targeting and persuasiveness of the advertising (Cooper & Schindler, 2011). Nevertheless, these two factors are connected with the question of the effectiveness of the ad. Thus, the effectiveness of ad targeting includes the issues of the consumers’ preferences. It is important to note that the development of targeted ads can be considered as a more effective variant of providing ads on the Internet (Doane & Seward, 2010).

Moreover, the results of the researches which were worked out for developing the targeted ads are useful for offering the most effective advertisements for the targeted public by focusing on their interests and preferences. The persuasiveness of the advertising is associated with the aspect of the real effectiveness of the offered ads because it measures the amount of those consumers who are not only interested in the product but also buy it. To form the real picture of the ads’ effectiveness, it is necessary to fix the correlation between examining the ad and the following purchase of the product. Five more metrics (ad awareness, brand awareness, brand favorability, message association, and purchase intent) were proposed to make the results more objective.

What analysis would be appropriate for the data collected through Consumer Direct?

To analyze the data which were collected through Consumer Direct, the combination of two appropriate models should be used. Thus, it is necessary to use the elements of the ANOVA model and of the regression method. The type of analysis which combines the aspects of these two methods is ANCOVA. ANCOVA is the analysis of covariance and it is possible to examine the changes of two variables and the character of the correlation between them with the help of this analysis (Doane & Seward, 2010).

The method of ANCOVA was used to analyze the results provided by two groups participated in the study. It was necessary to examine the similarities and differences in the results provided by the ad-exposed group and by the control group (Cooper & Schindler, 2011).

ANCOVA as a general linear model allows paying attention to the peculiarities of changing one variable in two groups with focusing on the peculiarities of the other groups and the other variables’ characteristics (Doane & Seward, 2010). That is why ANCOVA as the analysis of covariance helps to provide the conclusions to the research according to the effectiveness of the offered ads with references to the results from two groups of participants of the investigation. In this case, the analysis of variance in combination with the examination of the linear correlation and regression is the most appropriate variant.

References

Cooper, D. R., & Schindler, P. S. (2011). Business research methods. New York, NY: McGraw-Hill Irwin.

Doane, D. P., & Seward, L. E. (2010). Applied statistics in business and economics. New York, NY: McGraw-Hill.

In each and every society there are laws that govern it. The case of China is a reflection of how care should be taken before revealing some of the information requested by some governments. Non-disclosure of such information should therefore be the best solution in such a scenario.

The fact that no one knows for sure what the intention of any government that asks such information will do after getting the information from Yahoo should ensure caution is taken. It would therefore be wise of any organization to uphold the freedom of expression among its customers as a protective measure of the service users.

To start with, as earlier noted there is lack of knowledge of what the government will do with the information got from the service provider. In this case, revealing of the name led to the harassment of the journalist and even a prison sentence (Tran, 2007). Acquiesce of such information may also lead to trust issues between the company with its clients. The thought by the clients that any information that they may share with their friends may be revealed to the government may limit them to using the services of the company.

In turn, this may lower the value of the shares of company, which means lower turnover. Any competitor that may come along with a freedom of expression policy may therefore have an upper hand on the control of the market due to trust issues that are caused by giving out of information. If Yahoo decides to submit such information this will be a bad record set by the organization.

The reasoning behind this is the fact that governments may take the opportunity to keep in check of the views that are not favorable to them. The freedom of expression, which is widely supported all over the world, will therefore be compromised due to one decision by Yahoo. The organization may also find it hard to resist revealing of such information in future due to the tread they may set.

Giving out of such information will also lead to a company becoming an organization that is easily manipulated by governments that the organization is operating in. Giving out of such information would also lead to the Yahoo being used as an instrument by governments to drive out any rebellions that the governments may be undergoing through.

Also notable is the fact that the freedom of expression will be compromised due to such a move to share information with any government. The relationship between the government of China may translate to one that has conditions. The conditions contained in this relationship are that they have to keep on providing certain information whenever required. Such a climate is not what the organization needs when running its activities in a given region.

The case of the government China requesting the information from Yahoo and getting it reveals some of the issues that arise due to doing business globally. Some governments are so protective of what is said about them and would do anything to ensure they are in control of information that discredits them (Tran, 2007). Another issue that arises in this scenario is the issue of freedom of expression. Though the human rights organizations highlight on the need to have it in our societies, it is not always upheld in some societies.

A good example is in this case where people of China are deprived this right. The solution to this problem would be to have international laws that govern business that are in operation globally. Clearly, not every society upholds some of the values that may be considered common to every society. It would only be fair to organizations operating globally to be protected in their operations with values that are deemed fair to them in which ever region they wish to peruse their interests.

To sum up, organization disclosure of information to the government or any other authority is usually detrimental to it. The uses of the services provided by Yahoo or any other organization that offers the same services are usually confident, that the organization will not share such information. No wonder each user gets to choose a password and user name that personalizes their accounts.

It would therefore be unfair to them to know that though there are such measures that are protective of the information they share, the organization goes on their back and share it with other people. As evident in this case, acquiesce of such information may lead to undesirable actions being taken against individuals who share this information.

It is also evident that the problem also affects the organizations when trust issues by the users of the services arise. The fact that people were willing to sell Yahoo shares due to their action is a clear indication of how the effect of the action of revealing some information may be of great effect (Tran, 2007). Finally, the fate of the journalist who was unveiled by Yahoo led to his torture, whether knowingly or unknowingly, Yahoo shares the responsibility of what came of their actions.

Reference

Tran, M. (2007). Yahoo! sued over disclosure of Chinese citizens’ identities. Web.

Background

Justin Ellsworth was a 20 year old U.S Marine who died in the service of his country. He was killed in Falluja, Iraq, by a roadside bomb as he was helping civilians to evacuate before a planned military offensive in the city against the Iraqi insurgents. Infantry who are at the front line are not given a Marine e-mail account and they usually send their correspondences via webmail services such as Yahoo, Hotmail and AOL. In this case, Justin was using a Yahoo account. Naturally, the family of Justin Ellsworth wanted to find out what their son had to say and therefore tried to access his email account but to their utter dismay, Yahoo denied their request, citing their company’s terms of service which prohibit the company from disclosing their users’ private communication to third parties. As a policy, Yahoo cannot disclose a user’s email password to anyone other than the account holder and if the account is not used in 90 days, it is deleted. Thus, the family was requested to go to the courts and prove their identity as well as their relationship with Justin before they could be given access to his email account (Hu, 2004).

The battle of Ellsworth’s family against Yahoo prompts the question of whether companies should relax their policies on special circumstances such as in the Ellsworth case. For some, Yahoo did the right thing in denying the family access as granting such a request would compromise the privacy, not just of Justin, but of all account holders even in future. Yet for others, the request should have been honored if only to ease the emotional pain that Justin’s family was going through. Ethically speaking, should Yahoo have been forced to turn over Justin Ellsworth’s email to his parents?

Utilitarian Cosideration

The utilitarian view or utilitarianism is a moral principle which argues that, “how right or how wrong an action is, should be determined only by the ensuing results.” More accurately, it should be determined by the amount of happiness that it produces. The more happiness and benefits it produces for all, the more justified it is (Gensler, Spurgin & Swindal, 2004).

The greatest happiness principle which is the basis of the utilitarian view holds that the rightness of all actions is directly proportional to their promotion of happiness. If this school of thought is applied to the Justin Ellsworth case, then one would be justified in saying that Yahoo was wrong in denying Justin’s family access to his e-mail account. Their actions cannot be right because they produced the opposite of happiness to the Ellsworth family. They caused unhappiness, brought about pain and deprived pleasure to the family. Regardless of moral obligations, the aim of any action should be to promote pleasure and maximum benefits for all concerned parties. Yahoo’s refusal to grant email access to the family on account of their policy cannot be a welfare enhancing policy due to the emotional pain it caused the family and as such, it is morally wrong (Gensler et al, 2004).

The utilitarian morality recognizes that human beings have the ability to sacrifice their own good for the greater good of others. So Yahoo should have relaxed their standards, sacrificed their own good, if only to promote the greater good of the family- and sacrifice is by itself a good. If an action can increase the total sum of happiness for others, then it is justifiable. Granted, the Yahoo actions were intended for good, but which is the greater good? Following rules for rule’s sake or promoting the good of everyone? Rules are supposed to benefit everyone and where they don’t, they should be done away with. Between moral obligations and benefit to mankind, benefit is assigned a higher quality (Gensler et al, 2004). So in this respect, Yahoo should have been forced to turn over Justin Ellsworth’s email account to his parents.

Deontological Consideration

The deontological point of view differs significantly from the utilitarian school of thought. Deontologists argue that how right or how wrong an action is, should be determined by the intrinsic qualities of the action itself and not the promotion of ‘the greater good’ or any other such consequence. Morality should be its own point and all duties should be performed for their own sake, not for the sake of others (Moreland & Craig, 2003). Thus according to the deontological viewpoint, Yahoo did the right thing in denying the Ellsworth family access to their son’s email account.

Regardless of the consequences, such an action would mean that each time there is such a request, the concerned parties would have to bend their rules to accommodate these requests. This defeats the purpose of why the policy was set up in the first place. The idea of a privacy policy is so that no one can access another’s private information and the agreement to the terms of service means that the account holders understand this and agree to it. Yahoo had no choice but to honor their terms of service since it was the right and moral thing to do. Justin Ellsworth was entitled to his privacy and Yahoo being bounded by duty, cannot violate that right even though the account holder is dead and regardless of the consequences. Granted, the action is hurtful, but rules are put in place for a reason, to be followed. We cannot bend rules and norms each time we feel like just because we wish to promote some good. Such activities are in essence, violations of others’ rights; in this case Justin’s right to privacy and by extension, other people’s rights who might find themselves in such a situation.

The Ellsworth case is undoubtedly unfortunate but waiving the policy based on some greater good defeats the purpose of such policies. Yahoo is duty bound not to reveal anything to the family but at the same time, there is need for a law that caters for such eventualities.

References

Moreland, J.P & Craig, W.L (2003) Philosophical foundations for a Christian worldview Nottingham: InterVarsity Press

Gensler, H.J, Spurgin, E.W, Swindal, J (2004) Ethics: Contemporary readings. New York: Routledge

Hu, J. (2004). Yahoo denies family access to dead marine’s e-mail. CNET News. Web.

China

More often than not, people set up businesses in order to generate profits, regardless of the size, nature or location. But depending on the nature and long term goals, strategies are set up. The strategy a company will employ will differ greatly from city to city and living in the global village we do today, from country to country but the bottom line will always remain profits. The same rule applies for the corner shop down the street where you buy your coca cola or the multinational itself, which supplies the corner shop.

Location scouting for setting up production factories, outlets, and joint ventures is a task that is taken very seriously. One of the most favorite locations is China. Though many people say entering China is tedious due to its government policies of wanting to share technology so they could learn from them. But with changing times China is also changing from a communist country to a capitalist one, making it easier for multinationals to enter their market. As far as the argument of risking market share to China goes, that exists everywhere in the world. If it’s not them, it’ll be someone else.

China is a humongous market which provides great opportunities be it in terms of size of its market or the cheaply available labor. Setting up production plants there also removes trade barriers such as import quotas allowing a greater share in the market. China is a populous country which can make up a good portion of the overall profit as the probability of selling there is quite high. All countries will present problems of their own while setting up business there, but one thing which the Chinese can be relied upon for is their integrity and if that means giving up some management methods to them than it’s a fair price to pay.

Yahoo

One of the biggest online names one can not ignore even if they wanted to is Yahoo. Yahoo was launched in 1994 in the form of an online business making it fall into the category of electronic business, better known as e-business. The company is perhaps best known for its web portal, search engine, Yahoo! Directory, Yahoo! Mail, news, and social media websites and services. Yahoo! was founded by Jerry Yang and David Filo in January 1994 and was incorporated on March 1, 1995.

Unlike a normal business, it doesn’t have a brick-and-mortar form from which it operates but that doesn’t mean that there are no physical premises. Yahoo is such a large organization, with its operations world over. People may be off the belief that because it is online there’s lesser risk, money, human resources and other necessities that are required to run a business, involved. That is not true. The amount of resources is almost equal, if not more than any huge retail organization like Wall Mart.

The online business industry was riding the waves and was at its peak till the end of 1991. But this was then followed by its downfall which left many investors and entrepreneurs bankrupt. One of the survivors that we still see today is Yahoo. On of the main reasons for this is that the strategies that they had outlined for themselves such as diversifying and creating joint ventures with many other online businesses. They spread their risk all over the board and survived and have managed to leave an imprint on the minds of all those peoples who have used it.

Conclusion

All in all, one can not say which would be more successful or profitable, a brick and mortar or an online company. But what we can say with quite a bit of certainty is this that whichever form of business one runs, the strategies which are formulated and applied should be inline with the changing environment and flexible so as to mold them according to time and environment.

References

“Yahoo! Inc: Company Report”. MSN. 2008. Web.

“Key Statistics”. Yahoo. 2008. Web.

Key Points

• Responding to business challenges strategically: consideration of opportunities offered by leveraged recapitalization at Yahoo by creating an ownership group
• Ethics and social responsibility: regardless of the fact that leveraged recapitalization could be advantageous for the company, the questions whether it is ethical for Mr. Yang who is one of Yahoo’s founders and a substantial shareholder of the company to combine multiple roles and influence the decision making process.
• Entrepreneurship in action: a giant software company Microsoft Corporation offered more than $ 45 billion to buy the company in 2008, but Yang rejected this offer. Other buyers hesitate about buying Yahoo because they are uncertain about the future actions and position of Yang.

Analysis

Mr. Yang who is one of the cofounders of Yahoo and a substantial shareholder of the company at the same time was asked to resign from the company’s board of directors. The actions of Mr. Yang created a conflict of interest because of his multiple roles in the Internet company. According to recent reports, Yang made attempts to take a controlling stake with other buyers at Yahoo though as one of directors he will vote whether to accept offers of other potential buyers.

A Yahoo spokesman commented on this situation, admitting that Yang is one of 9 directors, and he, as well as the rest of his fellow directors, acts in the best interests of all shareholders.

The multiple roles of Yang, including those of his position in the board of directors, a substantial shareholder and a position of the so-called “Chief Yahoo” make the interested parties hesitate whether Yang can act for the best of all shareholders and neglect his own desire of keeping Yahoo independent. The job of Chief Yahoo is ill-defined and gives rise to doubts concerning the responsibilities and power of Yang inside Yahoo.

Another option which was considered by Yahoo was to create an ownership group consisting of Filo and Yang who founded this Internet company 16 years ago (Das, Chon and Efrati, At Yahoo, Yang’s Dual Roles Are under Fire).

This option is referred to as leveraged recapitalization and would enable the company to buy back its stock, increasing its stake at the same time. Although people close to Yahoo state that there are no concerns expressed about Yang’s motivations by the board of directors, the potential buyers of the company hesitate about the role of Yang under different scenarios.

A Harvard professor Jay Lorsch admitted that the Yahoo’s governance would much clearer if Yang is not involved. The question whether Yang can be a disinterested director acting in the best interests of all shareholders remains rather doubtful. People close to Yahoo state that the involvement of Yang into the decision making process varied over the years, but he was always focused on selecting the right track for the company.

Conclusion

The multiple roles played by Yang as a cofounder, a substantial shareholder, one of directors and Chief Yahoo gave rise to discussion of his motivations when selecting the new business track for the company. The ethical concerns of being an interested party and acting in the best interests of all shareholders influence the opinion of the potential buyers. Though Yang always contributed to economical success of the company, because of the conflict of interest, he was offered to resign his position in the board of directors.

Works Cited

Das, Anupreeta, Gina Chon and Amir Efrati. “At Yahoo, Yang’s Dual Roles Are under Fire.” The Wall Street Journal 5 Nov. 2011. Web.

This report contains the results of a research study on the income trends of Yahoo, Inc. over the last nine years (between 2006 and 2014). Data was obtained from the Yahoo Finance website (finance.yahoo.com) and analyzed through scatter diagram, eyeballing and regression to determine trend, cyclicality, seasonality, and auto-regression.

Methodology

The data was obtained from the Yahoo Finance website (finance.yahoo.com) and analyzed through scatter diagram, eyeballing and regression to determine trend, cyclicality, seasonality, and auto-regression.

The data was summarized to represent the income as average income per quarter.

Results

Figure 1 below is a scatter diagram highlighting the trend, seasonability and cyclicality of Yahoo income.

Trend

The scatter diagram illustrates three different trends over the nine-year period (between January 3, 2006 and May 1, 2007. Yahoo income experienced a downward trend between the first quarter of 2006 and last quarter of 2008. Between the fourth quarter of 2008 and third quarter of 2012, Yahoo’s income were relatively constant but exhibited moderate variations of a sinusoidal pattern. In other words, the income grew moderately between the last quarter of 2008 and last quarter of 2009 then declined toward the third quarter of 2010. The returns then again grew and declined between the third quarter of 2010 and third quarter of 2011. However, the income experienced an upward trend between the third quarter of 2012 towards the last quarter of 2013 before starting a declining trend.

Seasonality and Cyclicality

The scatter diagram illustrates non-existence of seasonality and cyclicality. The Yahoo returns experienced a downward returns for all the quarters from 2006 to 2008. The returns also exhbited an upward trend from the third quarter through the last quarter of 2013. The returns of the fourth quarter of 2008 increased while the returns of the fourth quarter of 2009 decreased. Additionally, the returns of the third quarters of 2007, 2010, and 2011 decreased while the returns of the third quarter of 2012 increased. Cyclicality would describe Yahoo stock when the income fluctuates generally according to changes in the seasons’ cycle (Mills, 1990).

Hypothesis Testing and Auto-Regression

Null hypothesis (H₀): The highest-order parameter is not significant (β_p = 0).

Alternate hypothesis (H₁): The highest-order parameter is significant (β_p ≠ 0).

Based on an alpha level of significance of 0.05, the decision rule is to reject the null hypothesis if the p-value is less than 0.05 but fail to reject the null hypothesis when the p-value is greater than 0.05.

The r-square value of approximately 0.8554 implies that the data was a good fit for the regression model. In other words, about 85.54% of the variations in the dependent variable (Y_t) which represents returns are accounted for by the data (or the changes in the x-variable (in this case, Y_t-1).

The results of the analysis of variance (significance F or P-value = 5.4924 * 10^-15) leads to the rejection of the null hypothesis (β_p = 0) because the p-value < 0.005. As a result, the alternate hypothesis (β_p ≠ 0) is favored. This mean the regression model is significant.

The following is the estimated linear regression model: Y_t = 1.3985 + 0.9392 X ± 1.6433, where: y_t= returns and x = y_t-1.

The x variable is significant (the p-value of 5.49241*10^-15 is less than the alpha level of 0.05). The constant or intercept appears to be non-significant (P> 0.05).

In-sample/Out-sample Forecasting

The following are the y values (or returns) estimated using the regression equation:

• In-sample: Y_t = 1.3985 + (0.9392 * 16.4) ± 1.6433 = 16.80138 ± 1.6433
• Out-sample: Y_t = 1.3985 + (0.9392 * 45) ± 1.6433 = 43.6625 ± 1.6433

References

Mills, T. C. (1990). Time series techniques for economists. New York: Cambridge University Press. Web.