Introduction
Yahoo was incorporated in 1995; its business activity was mainly based on online advertising, promotions, direct marketing, sponsorships and merchandising (Terry, 2006). However, overtime, Yahoo has fallen behind its competitors who generate more revenue than itself due to changes that occurred within its organizational structure. For instance, the complexity in its organizational structure and poor decision making processes. Due to such factors Google who is Yahoo’s foremost competitor, raises twice as much revenue due to better decision making and flexible organizational structures.
External Factors Affecting Yahoo’s Performance
External factors are those factors that cannot be controlled by an organization. In the late 2000, Yahoo’s performance started declining and it was opined that the company had fallen because it couldn’t adapt to dynamic changes that were prevalent in the business environment. Rivalries between the organization and its competitors also made its revenues to drop sharply.
Economy is one of the external factors that affected yahoo’s performances. This was brought about by market fluctuations based on the value of the currency, recession and inflation (Robert, 2006). The, economy of a country is paramount relating to commercial activities that need to take place. This determines the levels of demand and supply which greatly affect the purchasing power of customers. Therefore the same way economy affects all businesses, Yahoo was greatly affected by this and its revenue dropped. Though it is not easy to control a country’s economy, best way would be to improvise commercial activities when altercations occur to avoid losses and bankruptcy.
Trend is another external factor that affected commerci...
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...aintaining customers is a heavy duty that cuts across all integrated functions related to advertising and customer satisfaction. A business should be willing to face the harsh environment of the global economy, competition, technological trends and rivalry in order to survive the tactics and dynamics of the current business environment. Structures to satisfy and retain customers are also essential as it dictates the level of revenue of the company and the capacity of it to own and retain customers nationally and internationally.
Yahoo has to realize the need to come back to the market and face its ‘giants’ through implementation of things like restructuring the organization. This has to be counted as important because for any organization to kick start its activities the right personnel with the right skills and abilities are a must for the survival of the company.
Google is multinational public corporation of United States of America that invested in cloud computing, Internet search and several advertising technologies. Its main business is to develop and host Internet based products and services. The company makes profit through “AdWords” which is internet based advertising program. The CEO of the company is Eric Schmidt. The company was founded by Sergey Brin and Larry Page who are known as the “Google Guys”. In the beginning the company was registered as a private entity. In 2004 the company’s status changed from private to public concern. After the status of company changed Eric Schmidt, Sergey Brin and Larry Page signed an agreement to work together at Google for twenty five year. The agreement will expire in 2029. The aim of the company was to make information universally available in an organized manner. Since then they have been doing this job excellently. The company’s headquarter is located at Mountain View, California.
It is managing profitable customers relationships and to create value for customers and to capture value from customers in return.
A majority of Google Inc. revenue comes from its advertising services. As a search engine provider (i.e. chrome) it knew that it had access to billions of customers worldwide which businesses want to reach. So it asked the question, “What if we could provide products that allow for better attribution and measurement across screens so that we show great ads for the right people?” (citation). From there came this idea of providing advertisement services to businesses. Its ad services are grouped into Performance advertising and Brand advertising.
Yahoo! Inc.’s corporate mission revolves around the idea of providing the essential global internet services for both business and individual consumers alike. In effect, and as Yahoo! (2012) states, the company is focused relentless on not only making daily habits around the world inspiring, but also entertaining. In this regard, Yahoo is committed to ensure that its customers only use the best products so as to enhance their digital experience. The primary goal and objective of the company in articulating its mission is to offer quality, must-have marketing solutions for online advertising businesses; and to attract publishers and content developers by offering an attractive open platform that promotes innovation. The company’s organizational culture springs from its mission statement, and revolve around several key core values as follows; excellence, teamwork, innovation, community, customer satisfaction, people and its shareholders.
INTRODUCTION The Google company has engaged the controlling location and position in its industry since the launch due to its unique product which is a result of its unparalleled working location. Google has moved out on to achieve the largest share of online search engines as it affords its users with a product that is difficult to find even though there are a lot of challenges. By analyzing and examining the internal and external environment of the company, it is obvious that Google company is running an efficient machine, giving attention to the most of its customers and it ensures that it offers a quick and reliable product to its customers. Origination structure at Google :
In order for Yahoo to retain their users and attract new users, Yahoo was under pressure to develop and enhance their product and respond to new changes. Yahoo was unable to thrive and it was impacted negatively by external factors. From 2004 to 2007 , the net income of Yahoo has been dropped by more than 20% while net Income for Google in same period multiplied 12 times. In these report, three major external factors are identified that were impacting Yahoo performance during the period . These external factors are listed below.
External competition is the key threat that Yahoo faces presently, and has been an impediment in the past too. As stated before, Yahoo’s services consist of multi-business units that are not only hard to differentiate on the internet space, but are also rivaled by other similar providers. Google provides email service, online advertising and search engine services among many more others, while Facebook, on the other hand, provides social media online advertisement and eats substantially into Yahoo’s user numbers. Spencer (2012) also provides that by Yahoo choosing g to venture into the mobile web business, it has effectively exposed itself to two marketing fronts that must be simultaneously articulated. This will or might prove hard to do, considering the fact that some of its rivals such as Google have set aside billons for such strategies. With Yahoo’s current market and financial position, it is impossible to match the financial power of both Facebook and Google. In terms of expansion into foreign markets, Yahoo faces the issue of cross-cultural complications. It should be noted that some conservative countries such as Chia have crated and adopted their own search engines that reflect their needs and wants and as such, there is bound to be little need for Yahoo in these markets. Therefore, the formulation of strategic partnerships and alliances is the key to successful expansion into foreign international markets, as opposed to direct entry.
Google’s internal structure stability can be influenced by external factors. To ensure the right decisions made, they must complete external and internal analysis. Google’s must contend with external environment influences, which are political, economical, and a technological. Day after day must be able to understand how the external environment influences can provide advantages to obtaining opportunities but on the downside expose the threats that Google has to overcome to be successful. For Google to maximize the market opportunities, Google must recognize its internal value, rarity, and organization. To exploit the company’s strength and weakness, Google must comprise an SWOT analysis. When Google accomplishes the SWOT analysis, they will understand the company’s strengths and weaknesses. It will also demonstrate the environmental opportunities and the threats that are facing in this competitive market. Once this analysis completed, Google can plan strategic plan to utilize their strengths, improve upon their weaknesses, maximize their opportunities, and eliminate threats that can endanger their growth as a company.
Instead, it is because they have for the most part perceived that satisfied clients and long-term connections are vital to building practical achievement and benefitting after some time. Numerous organizations utilize client relationship management, an information-driven business advertising process whereby organizations gather information on clients for more focused on and proficient showcasing and deals endeavors. Stakeholders don't have coordinate contact with their customers however the organization affects the organization treatment of
Stefanovic, I. & Milosevic, D. 2012, "On conceptual differentiation and integration of strategy and business model*", Zbornik Radova Ekonomski Fakultet u Rijeka, vol. 30, no. 1, pp. 141-161.
After interpreting both the internal and external analysis, it is clearly states that Yahoo has lack of effective strategy in the market as we can see in the VRIO analysis, which is also the key competitive advantage and the need to grow in this industry. While for the driving forces, which explain the social trend and technology are affecting the industry based on the online user’s willingness to spend their time on social media. Therefore, Yahoo is now moving to the mobile app service. This issue which is also leads to the Porter’s Five Forces where the availability for substitution is high in the industry. For the strategic profile, they have to build more good relationship with other market in order to develop a strong brand.
Yahoo was an early success due to a combination of factors such as timing, hard work, and a good understanding of Web surfer’s tastes and needs.. In early 1995, Net mania was just flowering. It was a great time to be a young entrepreneur with an Internet idea. Dave Faldo and Jerry Yang saw a consumer need for classifying and differentiating web sights. Resting the urge to automate this process, Yahoo’s founders instead chose to manually perform this search, reviewing and classifying roughly 1000 sights a day. This approach combined with their decision to offer a free service lead to early success.
Sergey Brin and Larry Page met in spring 1995 at a gathering in Stanford University. Between January 1996 and December 1997, they created "BackRub", the precursor of Google search engine. The objective was to better organize and huge amount of data on the Internet. Eventually the name was changed to "Google" to signify the immense amount of information that resided on the Internet. Google is transformed from the word googol, referring to 1 followed by 100 zeros.
Even though this Internet market is relatively new, more so in Japan, the stocks for these Internet companies are soaring to heights no one could have predicted. NTT Docomo, a Japanese communications company put out a handset that would allow cellular phone users to connect to the Internet. Today, their stocks have risen 300%. This increase is even unexciting when posted next to those of Softbank whose stock rose four times that much with an astounding 1250% increase. Yahoo Japan is the one that is doing the best, of all these, its increase was 4200%
Economic Factors :- Existing economic conditions have a great impact on the management practices of an organization. These economic factors include recession, stock market fluctuations, change in interest rates etc. These factors affect the profitability and success of an organization.