Overview of the Case
Yahoo Inc.
Yahoo Inc. is one of the world´s leading technology companies, which declared overall sales revenue of USD$ 4.7 billion. The company operates fifty small and medium size brands under the Yahoo Inc. umbrella and employs over 14,000 individuals in more than 60 global locations with 30% of the staff located at the company´s headquarters (HQ) in Sunnyvale, California. While today the company is considered one of the leading internet service providers, such as search engine, internet portal, email and other related services, competitive market environment places a lot of pressure on continuous innovation and competitiveness of the company. The company is considered to be “stuck-in-the-middle” of the transition from the desktop to smartphones, influenced by newly emerged Google and Facebook businesses. The arrival of Marissa Meyer gave new hope to the company´s web-based future.
Problem:
How can Yahoo Inc. Chief Executive Officer (CEO),Marissa Meyer, restructure Yahoo to avoid stagnation?
SWOT Analysis
TOWS MATRIX
Strategic Alternatives [those emerge from the SWOT]
Strategic Alternatives (pick 3 to 4 from the TOWS)
1 Improve organizational image and build on the identity through consolidation of Yahoo! Services with social platforms
2 Focus Research and Development (R&D) efforts on the development of mobile applications and interface
3 Build on strategic partnerships, based on Microsoft and AOL experience for enhancement of the advertisement revenue, which can lead to the improvement of financial health of the organization.
4 Diversify the product portfolio through mobile services to leverage the competitive advantage and secure the market share in existing products and gain new customers in emerging mobile segment
Key Evaluation Criteria (you need to develop your own criteria)
A Strategic alignment with external environment [15%]
B Financial health recovery and improved liquidity ratio [35%]
C Yahoo image recovery and improvement of the brand identity [25%]
D Profitability [40%]
Matrix for Analyzing Alternatives
Recommendation:
Based on the analysis of the case, it is evidenced that Yahoo! once the strongest internet service provider in the world is consistently losing its position to competition due to the lack of focus on the organizational identity and lost timing with regards to the development of the alternative to search engine products. The company is very strong, however, until today, in business directory provision and customization for its clients and can continue building on these elements along with strategic partnerships within the social networks. To build on the sustainable competitive advantage, it is necessary that Yahoo Inc. comes up to speed with the latest technology and customer trends, namely, mobile interface and services. This alignment of internal and external environment should have priority over other aspects of the business and strategic options. With that in mind, the alternative of investment in R&D for mobile technology can give the following advantages to Yahoo:
- Improve organizational image and identity of the company;
- Bring higher revenues and improve organizational liquidity ratio;
- Create new opportunities for advertisement revenue through potential of strategic affiliation with social networks, which mostly work through mobile and not desktop software;
References
Yahoo (2013). Yahoo Code of Ethics. Yahoo Official Website. Retrieved 17 February 2014, http://files.shareholder.com/downloads/YHOO/2968492630x0x239565/4f32ddd0-82e5-47c2-ac71-75403ebbb404/CodeOfEthics_Ext_1008.pdf
