Analysis And Recommendations For Yahoo! Inc.: Marissa Mayer’s Challenge

Overview/Executive Summary

Yahoo! can be stated to be a popular company which provides web services to the different consumers and has its headquarters in California (Yahoo.com, 2018). The company is owned by Verizon Communications. The company which was originally found by Jerry Yang along with David Filo in the year 1994 which came into incorporation in the year 1995. The given case study named `Yahoo! Inc.: Marissa Mayer’s Challenge` has provided a backdrop on the working of the company. The company has being facing intense competition from Google as well as Microsoft and due to that it has been losing out on a considerable number of shares and positioning in the market (Icmrindia.org, 2018).

The case study took through the highlights of the Internet consumer service industry, along with the company background, the problems being faced by the company and the management throughout the years. However, at the end of the case study certain number of challenges which were being faced by the company like their investment related to Alibaba and the proposition of Yahoo to enter into the Middle East and African markets is being analyzed. The main question at the end of the case study is the strategic option which needs to be adopted by the management at Yahoo!

Assessment of opportunities and challenges using SWOT Analysis

According to Merat and Bo (2013), the SWOT Analysis is a useful strategic management tool which makes considerable use of the different strengths, weaknesses, opportunities as well as the threats of the company in order to ensure the strategic positioning of the firm at large. The SWOT analysis of Yahoo! will be done in the following section which shall help in understanding the overall positioning and standing of the firm at large.

Strengths

The strengths comprise of the internal advantages which a firm possesses and which can be used to gain a competitive edge in the business environment (Johnson, 2016).  The strengths of the company need to be built so that the different organizational factors can be successfully enhanced and the overall standing of the company can be improved at large. The strengths of Yahoo are as follows:

• The company has an easy interface which is popular worldwide. Moreover, the fact that it provides fast as well as free relevant services for the customers is also a plus point for the firm at large.
• Globally, there are over 8000 employees of the firm which thereby assist the firm in performing well at large (Williamson et al., 2013).
• The content which the company provides to its customers is new and is original and has thereby attracted over 350 million customers
• It has a large portfolio of services namely the web portal, Yahoo! Directory, Yahoo! Mail, Answers, online mapping, video sharing and the social media websites.

Weaknesses

Slack (2015) states that the weaknesses of the company can be rightfully stated to be the internal shortcomings of the firm which tend to have an impact on the performance of the company at large. The different shortcomings of the firm are as follows:

• The company has been facing tough competition from the different players who exist around the globe and have thereby developed content which is more interesting than the content of Yahoo. This has had a huge impact on the revenues as earned by the firm and there have also been allegations with respect to data leaks (Stead & Stead, 2013). 
• In addition to this, the management of the company has been greatly inconsistent and it is due to this inconsistency there have been several impacts on the share value of the firm.

Assessment of opportunities and challenges using SWOT Analysis

Opportunities

The opportunities of any firm can be stated to be the presence of such factors on the external font of the organization which have greatly impacted on the performance of the firm (Rothaermel, 2015). . These factors although lying outside the realm of the firm, tend to have a strong effect on the firm at large. The different opportunities available to Yahoo are as follows:

• There do exist various emerging economies which can be tapped by Yahoo. These markets may include certain underdeveloped economies of Asia and China which has rejected Google`s proposition.
• The company can take in several advertisements from different businesses which do not have an online presence.
• In addition to this, Yahoo needs to acquire several blogs and smaller websites which can then successfully help Yahoo in gaining more content (Wheelen et al., 2017).

Threats

According to Moutinho and Vargas-Sanchez (2018), the threats can be described as the presence of certain factors in the external environment of the firm which tend to have a strong impact on the overall firm and may pose several difficulties for it at large. The company will be required to make use of its strengths in order to overcome its threats. The different weaknesses of the company can be taken to be as follows:

• The website has already been subjected to data leak and related allegations and moreover, as the technology has developed even more it may be subject to misuse and manipulation by hackers.
• As Yahoo has engaged in massive breach of contract, due to the privacy issues it has chances of facing several legal complications
• In addition to this, there exists several competitive search engines as well as various social networking sites which work as advertisement platform and can steal the share of Yahoo. These competitors are Twitter, Whatsapp, Baidu, MSN and Bing.

Hence, it can be stated that Yahoo is in a rather competitive position and would be required to take considerable steps to ensure that it is able to regain its position in the market.

Strategic Options

From the given analysis on the strategic positioning of the firm using the tool of SWOT, the given strategic options can be stated to be taken up by Yahoo:

1. Yahoo can consider operating in countries like Pakistan, Nepal Bangladesh and Nepal and spread its content there so as to ensure considerable success. The company has its presence in several of the Asian companies, however, even then it is recommended that the company expands its operations into the smaller countries of the Asian economy which shall thereby allow the countries to get a global exposure through the search engine and content website but along with this even Yahoo can get a considerable access to expand its operations in these countries and take advantage of the emerging economy as present in those companies at large. In this manner, the company will be able to ensure that it is able to expand outside its domain as well (Morschett, Schramm-Klein & Zentes, 2015). The disadvantage of this option is that it may or may not be accepted in these countries and in addition to this, the company may also face resistance from the government as well.
2. Moreover, apart from hiring several well-known advertising platforms and profiles, Yahoo can take into consideration of associating with several local websites of different regions in order to improve its content. The websites which Yahoo takes into consideration at present, are quite popular and can be assessed on their own as well. Moreover, these websites also look out for alternate ways to website but if Yahoo takes into consideration its expansion with respect to local websites in the different regions where yahoo is present, it will be successfully able to widen its portfolio and also ensure long term success. However, there might be chances that these websites are not successful in the future (Zott & Amit, 2013).
3. The company can get into a merger with a well-known company or with several e-commerce websites so as to ensure that it can integrate its business with these firms at large. Although it is agreed that its agreement with Yahoo did not workout considerably, it can target the different e-commerce websites in India, Middle east as well as the other reasons in order to ensure that it is able to expand considerably in other countries and fight against the competitors. However, many management rights are often lost out during a merger (Vogel & Güttel, 2013).

Recommendations

After the analysis of the Strategic Options, it can be stated that the scenario of Yahoo is not as grim as it appears to be, there exists various options as available to the firm. However, out of the different options, the option which has been chosen for Yahoo is hiring several advertising websites, platforms as well as local portals which will then allow the company to ensure that it will be successfully able to generate adequate content and make the readers as well as the customers reach out to the different local businesses about which they may not be able to know earlier (Lasserre, 2017). 

 In addition to this, this will also prove to be a considerable option for the firm to save the society and build the different economies by promoting the local businesses as well. This can prove to be a considerably good strategy for Yahoo to expand its operations at large.

Conclusion

Therefore, from the given analysis done on the case study of Yahoo it can be rightfully stated that, the organization has a found base which was established on the latest technology and management but over the time it began to succumb to the external pressure of the competitive business environment. The given report analyzed the positioning of the business and analyzed everything which went wrong with the firm and what has been the consequences of those events. This was followed by the strategic analysis of the firm by making use of the SWOT Analysis and identification of several strategic options for the firm. Out of these options, the option of working with local websites and companies was chosen for which a recommendation has been provided.

References

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