Yahoo's Strategic Dilemma: SWOT, Options, and Recommendations

This case study provides an in-depth analysis of Yahoo's strategic challenges, particularly during Marissa Mayer's tenure, and explores potential strategic options for the company's future. The report begins with an overview of Yahoo's history and the competitive landscape it faced, highlighting challenges from Google and Microsoft. A SWOT analysis is conducted to assess Yahoo's strengths, weaknesses, opportunities, and threats, leading to the identification of strategic options such as expanding into emerging markets, partnering with local websites to enhance content, and pursuing mergers with e-commerce companies. The report recommends focusing on collaborations with local advertising platforms and portals to generate diverse content and promote local businesses, ultimately suggesting that this approach can help Yahoo regain its market position and contribute to economic development. Desklib offers a range of study tools and solved assignments to support students in understanding complex business strategies.

Running head: YAHOO!
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Name of the Student
Name of the University
Author Note

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Executive Summary
The business environment is very dynamic in nature and it is due to this that it becomes considerably
important for all the businesses present in this domain to take into consideration the factors present in the
external business environment and make strategies as per those factors. The main aim of the report is to
highlight the different factors as present in the strategic environment of Yahoo as well as the internal
factors which led to this consequence and recommended certain strategic options for it. The report
highlighted an overview of the case study named `Yahoo! Inc.: Marissa Mayer's Challenge` which was
then followed by the SWOT analysis and presentation of the strategic options. Certain recommendations
along with a conclusion has also been provided.

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Table of Contents
Introduction/ Overview of the Case.............................................................................................................. 3
Assessment of opportunities and challenges using SWOT Analysis...........................................................3
Strengths.................................................................................................................................................. 3
Weaknesses............................................................................................................................................ 4
Opportunities............................................................................................................................................ 5
Threats..................................................................................................................................................... 6
Strategic Options......................................................................................................................................... 7
Recommendations....................................................................................................................................... 8
Conclusion................................................................................................................................................... 9
References................................................................................................................................................ 10
Appendices................................................................................................................................................ 11

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Introduction/ Overview of the Case
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:

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 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.
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
0
0.5
1
1.5
2
2.5
3
3.5
4
1.024 1.147 1.367 1.547 1.729 1.991 2.184 2.424 2.631 2.88 3.15 3.385 3.578
The Internet Usage around the Globe
Figure 1: The Internet Usage around the globe
(Source: As created by the author, Appendix 1)
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.

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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.
Jan 1, 2012 Jan 1, 2013 Jan 1, 2014 Jan 1, 2015 Jan 1, 2016
-6,000,000
-4,000,000
-2,000,000
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
The Profitability of Yahoo
Axis Title
Figure 2: The Profitability of Yahoo
(Source: As made by the author, Data retrieved from Yahoo.com (2018).
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:

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 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.

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Figure 3: The US market share of Yahoo is under fierce competition
(Source: Statcounter.com, 2018).
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

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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

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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.

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References
Icmrindia.org (2018). Case studies. [Online]. Available at:
http://www.icmrindia.org/casestudies/catalogue/Human%20Resource%20and%20Organization
%20Behavior/HROB154.htm (Retrieved on: 17 Nov. 2018).
Johnson, G. (2016). Exploring strategy: text and cases. Pearson Education.
Lasserre, P (2017). Global strategic management. Palgrave.
Merat, A. & Bo, D. (2013). Strategic analysis of knowledge firms: The links between knowledge
management and leadership. Journal of Knowledge Management, 17(1), pp.3-15.
Morschett, D., Schramm-Klein, H. & Zentes, J. (2015). Strategic international management (pp. 978-
3658078836). Springer.
Moutinho, L. & Vargas-Sanchez, A. eds. (2018). Strategic Management in Tourism, CABI Tourism Texts.
Cabi.
Rothaermel, F.T. (2015). Strategic management. McGraw-Hill Education.
Slack, N. (2015). Operations strategy. John Wiley & Sons, Ltd.
Statcounter.com (2018). Yahoo further gains [online]. Available at: http://gs.statcounter.com/press/yahoo-
gains-further (Retrieved on: 17 Nov. 2018).
Stead, J.G. & Stead, W.E. (2013). Sustainable strategic management. ME Sharpe.
Vogel, R. & Güttel, W.H. (2013). The dynamic capability view in strategic management: A bibliometric
review. International Journal of Management Reviews, 15(4), pp.426-446.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. & Bamford, C.E. (2017). Strategic management and business
policy. Pearson.
Williamson, D., Cooke, P., Jenkins, W. & Moreton, K.M. (2013). Strategic management and business
analysis. Routledge.
Yahoo.com (2018). Yahoo. [Online]. Available at: https://in.yahoo.com/ (Retrieved on: 17 Nov. 2018).
Zott, C. & Amit, R. (2013). The business model: A theoretically anchored robust construct for strategic
analysis. Strategic Organization, 11(4), pp.403-411.

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