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Strategic Management and Policy
In the growing world of technology we often see many advantages and disadvantages associated with the growing population of Internet companies with there advertising techniques and strong thresholds on the American society through innovation and design. In the case of Yahoo it is apparent that there is an emerging culture growing inside the walls of the technological structure that allows Yahoo to achieve and maintain a competitive advantage through Internet applications and services provided by the Internet giant.
Yahoo has a structure unlike any other internet provider in which they are able to maintain a strong barrier against new and emerging providers to enter the market world of technology and over throw the internet giant. Also, they have the sustainability to achieve a mass bargaining power through the buyer and seller who use the services of Yahoo to achieve an overwhelming curve in the market place. With the advantages that Yahoo holds with the products and services it allows a strong barrier to increase so that substitutes can not and will not grow within the walls of the technological structure. With this in mind Porter’s five forces was the best resource to improve on my analysis of the corporations’ growth and competitive advantage in the internet society.
The threat of new and emerging entrants in the internet society is very low in these circumstances because of the product differentiation, capital requirements, and the access to distribution channels (Strategic Management, 2007). Product differentiation under these circumstances would cause a new entrant who wants to publicize an internet publication on the World Wide Web to spend a fortune to achieve what Google and Yahoo have spent a decade achieving through product loyalty and customer satisfaction. A new entrant also does not have the capital needs to achieve there desired results because of the extreme overhead and production cost included with beginning a new and emerging service. Also, the availability of distribution channels needed to publicize the internet page owned by the new emergent would quite possibly be owned solely by there strong competitor Yahoo or Google and dominance could cause a crushing blow to the competitors’ technological advancements.
The bargaining power of buyers has made an everlasting impact on Yahoos’ financial stability and advantage on market growth because of the strong leadership shown by CEO Terry Semel. Terry has integrated the internet service to become a virtual shopping guide know to all man kind through smart acquisitions and also mergers with top communication leaders such as SBC global, Verizon communication and Overture Services. This has allowed for service providers to advertise there many products and services on the World Wide Web and gain the advantage that Yahoo has provided, as being the next step generation in technological advancements. This in return has allowed Yahoo to charge a fee accompanied with advertisements so that the firms financials statements will increase in value and also will look extremely enhancing to those looking to purchase Yahoos stocks on the exchange. These advantages have done nothing but encourage the advertisement industry to buy their advertisements with Yahoo because of the well known technique and broad market that it connects with, but also to gain the top market share price that every corporate executive is trying to achieve.
With the bargaining power of buyers in mind we will now turn to the suppliers bargaining power so that we may introduce some factors that encourage supplier power. In this cause the supplier for Yahoos’ internet access is the American public that continues to thread the needle that sews Yahoos’ financial stability and continued growth throughout the world. Suppliers in this instance would be similar to the buyer when they are looking for a service that can generate a market power for the products and service that are being advertised on the Yahoo site. It is extremely difficult for the supplier to gain and advantage in this instance because of the strong control and marketing capabilities that Yahoo has over other leading advertisers such as television and radio. But, since yahoo has been able to form acquisitions with SBC and Verizon it is able to communicate over a much more “mobile” coverage area than before and therefore will enhance the suppliers to use the services offered by Yahoo extensively for product and service development.
The threat for new or substitute products and services is extremely high for Yahoo because they have the competitors AOL and MSN to always compete with and trying to overturn any investment opportunities that Yahoo has been involved with. The one major advantage that Yahoo has acquired is that they have the capabilities and resources to expand there service realm across many divisions of the consumer wants. Yahoo has the virtual reality of diminishing AOL and MSN by overturning the technology through broad band communication at the tips of your fingers with the cell phone industry. And also by acquiring a major search engine component which allows many consumers to search multiple things and acquire a result plus a solution for there disrupted efforts of confusion. With this being the situation in all business efforts we will now turn to the intense rivalry within the industry.
In every business unit we will always have a rival picking at our feet to see what integrative tactics we have in store for the future. In this case the customer base has lead to believe that Yahoo and its executives are in a win – win situation because of the barriers it has created within the organization. Including the differentiation that Yahoo has created a commodity and not just a service it is something all Americans depend upon when they are travel so that when they get to there hotel they may pull up on the search engines on places to dine within the city that they are staying and get listings as well as suggestions. Also, they can use the service offered by the wireless internet on the mobile phones to get reservation for a room while the consumer is still in flight. In this situation Yahoo has gained an extraordinary advantage against MSN and AOL in the service aspect of the business unit.
We have discussed all the forces that can and might drive an industry into an undesired state for which its products will not be desired and the business units will strongly fade away we as corporate leaders need to find a foundation of formulation. This will encourage our buyers and suppliers to continue to operate with our services and allow us at Yahoo to overcome the forces and achieve excellence within the market and service realm.
Formulation in this situation will increase the power that Yahoo has over the other competitors in the industry and it will also give them a stepping stone or building block to creating an implementation for their business strategy. First, would be the forming of the overall cost leadership within the firm to allow Yahoo to create that barrier between AOL and MSN. The issue of human resource management has lead me to realize that it would be in the best interest of Yahoo to continue to allow the casual dress for its employee base so that the employees are in a continual state of comfort while they are working and can provide the best and top quality service at an affordable rate. This statement may seem off the wall but just take for instance an employee who is always demanded of for service and top quality production at a high level industry, do you think that they are going to produce more under high pressure and uncomfortable atmospheres or are they going to perform under the most relaxing conditions imaginable. The structure of overhead costs has reduced a huge amount of dollars because there have not been a large number of administrators at Yahoos’ corporate level and this in return has gained the advantage over the competitors who have that large overhead expense involved with creating value for its customers. Along with the control of the organizations administrative cost, Yahoo should use the service realm to produce high quality technicians who are constantly monitoring progress or down time within the browser to ensure that all users are pleased with the experience they are receiving from Yahoo.
Along with the service that Yahoo delivers to there clients I that is so well known Yahoo also, delivers a unique parity to there clients with a speedy and creative innovation through there brand image which in turn will result in a powerful differentiation effort towards pleasing there customer base. Yahoos brand image that has attracted millions in my opinion is “with a click of a mouse you can have the world” and is very true to some aspects.
The main strategy of Yahoo is to create a “virtual Disney land”(Jamal Shamsie, 2007) says CEO Terry Semel by engaging in numerous links that any American can access through one web mail address which enhances the convenience sector and also enriches the dealers networks that have advertised with the world service provider Yahoo that has continually strived to bring success as well as an invisible feature of differentiated search engines that allows individuals to look for any piece of information around the world at a quick response rate and also receive a suggestive comment back as to the best possible choice for the convenience of the consumer.
And as we have discovered through the discussion of differentiation was that the focus strategy for Yahoo was simply to be above all the rest and capture the consumer eyes through technological, innovative, and brand image strategy to gain all competitive advantages in the market world. Yahoo has maintained a unique strategy of “being different” from all the rest by not concerning itself with profitable area but to allow its customers to have a service that produce more output than all the others combined.
Focus strategy in Yahoos’ case would be considered a differentiation focus that strives to targets a segment of the market world by allowing its users to choose from a wide variety of services from financial consulting to broad band internet access from the convenience of the cell phone. This gives the Yahoo firm the advantage it needs to gain and keep market shares increasing by dissolving the new entrant gap of trying to achieve the dominance factor to make an internet providers dream come true.
With this statement from the core of the analysis has concluded that the strategy that has been chosen to completely analyze and formulate the Yahoo firm has been done to establish a broad base on how the Yahoo firm can initialize a base mission and statement and keep turning the eyes of AOL and MSN so that Yahoo stands one step ahead of the competitor to achieve competitive advantage. The philosophy of Yahoo was to “work within a framework and if it is free for all we won’t take advantage of the strengths of our company”(Jamal Shamsie, 2007) says CEO Semel which allows the company to achieve great deeds on the weakness of the firm because we all know that one hundred percent of a strong company is a lot better than fifty percent of the strengths and fifty percent of the weaknesses. Meaning, fix the bad and leave the good alone because the good got there for a reason and they don’t need to be adjusted but the bad has issued needing to be addressed.
Dess, Lumpkin, and Eisnor (2007). Porter’s Five Forces, Business level Strategy, McGraw and Hill Strategic Management.
Shamsie, Jamal (2007). Yahoo Case, McGraw and Hill Strategic Management p. 792-797
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