Yahoo Strategic Plan 2SummaryYahoo can be likened to the popular yellow pages; this is because it provides a valuableand fast source of information to the entire world. It is used by more than three million peopleand is considered to be one of the leading internet businesses. Even though, Yahoo gained itsreputation and is one of the biggest search engines in the world, it has to deal with a lot of competition emanating from AOL and Google. These companies exert a lot of effort to developtheir websites search engine features everyday. Therefore, this has lead to a major decline in usertraffic on Yahoo’s sites and also affects the company’s revenues. On the other hand, Yahoomanages its services and products as a long-term focus since it believes that this is the bestmethod of running business. Nevertheless, the company believes that in order to compete withGoogle and AOL, it must continue to respond to the changing market and remain as a familiar,trustworthy media source. Summarily, the company’s corporate information and an overview of its operations, mandate in terms of vision, mission, values and stakeholders are evaluated. Thefundamental components of the company's internal environment including employee-employeeand employee-management relationships, work structures, organizational behaviors, ethics,financial position, products and employee incentives are discussed. External environmentalfactors which characterize the company's operations like competition, growth strategies,competitive strategies and market positions are also deduced. Finally, the various strategies usedby yahoo in terms economic models, differentiation and control are discussed with economicmodel chosen as the best strategy to adopt. The paper does not include yahoo strategic optionsand recommendations.
The company under consideration Yahoo! Inc. (referred to hereinafter as
is one of the world’s
largest online network integrated services provider with a combined user base in excess of 500 million.Yahoo provides a whole host of network based services, however over its existence of past 17 years,many such similar service providers have shored up especially after the dot com boom. Some of thesenew players took the path of specializing in a particular form of service while others brought a wholegamut of new services with the old ones.World Wide Web has grown exponentially over the past years giving rise to the intense rivalry betweencompanies involved. This intense rivalry especially with the likes of Google is one of the biggestchallenges for Yahoo.In this case study, we try to first understand the backdrop in which the company is operating including itsmission and vision for the future, its ultimate goals and philosophy regarding its business, its businessmodel, external
analysis based on Porter’s five forces model
and finally internal analysis based ondistinctive competencies, competitive advantage and profitability.This document is prepared based on the information provided in the
case, “Yahoo” (Jones, 2007) as
as numerous external sources such as Yahoo’s website and its annual reports circa 2011.
Yahoo was incorporated as an Internet service provider that would serve both the users and the businessesglobally. Yahoo was founded by two Stanford PhD candidates in January 1994 named Jerry Yang andDavid Filo. However,
today Yahoo has become one of the world’s largest global online network
integrated services provider. Yahoo today has a user base of 500 million per month. It has a presence inmore than 30 countries worldwide and provides services in more than twenty different languages. Thecompany presently operates out of Sunnyvale, California in the United States.
Yahoo first went public on the NASDAQ (YHOO) in the April of 1996. The stock had opened for $ 13.00
per share of the company and by the very day’s end; it had reached a
closing of $ 33.00 per share (YahooOverview, 2012). In Dec 1999 the company was also added to the S&P 500 index.Recently, in early 2012, Yahoo had appointed Scott Thompson as the new CEO who was then replacedby Marissa Mayer in the month of May (Perez, 2012). Also in June 2012, the company also hired the