Yandex: Management Strategy Report - Business Development Module

This management strategy report provides a comprehensive analysis of Yandex, a Russian multinational corporation specializing in internet-related products and services. The report begins by outlining Yandex's value proposition and defining the technological industry in which it operates. It then delves into the external macro-environment using PEST analysis, assessing political, economic, social, and technological factors impacting the company. The report analyzes the competitive landscape, strategic priorities, and key capabilities of Yandex, including its dynamic capabilities and VRIN analysis. It also identifies capability gaps and offers strategic recommendations for Yandex to maintain its competitive edge, covering aspects like geo-targeting, strategic partnerships, and workforce diversification. The report concludes with an overview of strategy implementation to achieve Yandex's goals.

Running head: YANDEX: MANAGEMENT STRATEGY REPORT
YANDEX: MANAGEMENT STRATEGY REPORT
Name of the student
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Table of Contents
Introduction.................................................................................................................................................2
Discussion....................................................................................................................................................2
Overview of the company.......................................................................................................................2
Value proposition....................................................................................................................................3
Strategic priorities...................................................................................................................................5
Key Capabilities of Yandex.......................................................................................................................6
Capability gaps in Yandex........................................................................................................................7
Crafting a strategy for Yandex.................................................................................................................9
Strategy implementation.......................................................................................................................11
Conclusion.................................................................................................................................................13

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Introduction
The particular paper is a management strategy report of the Russian multinational
company Yandex that specializes in internet related products and services. The report covers
value proposition offered by Yandex, a detailed analysis of external macro-environment and
what can be the present and futuristic strategic position of the company. The key capabilities of
the company is also assessed along with gaps in capabilities, the new strategy and the
implementation of the company’s top management strategies are mentioned, explained and
evaluated in the respective article. The article also provides certain strategic recommendations at
the end of the paper thereafter.
Discussion
Overview of the company
Yandex is a Russian multinational corporation that specializes in internet based products
and services. The products and services include transportation, search and information services,
ecommerce, navigation, mobile applications and digital advertising appliances and services. The
company Yandex provides altogether of seventy services in different sectors that utilizes internet
and digital portals. Yandex has become a very popular multinational corporation throughout the
world. Yandex has been incorporated in the nation of Netherlands, however, the company
primarily serves the Russian countries and also the commonwealth of the independent states. The
company founder and the other team members are mostly located from Russia. There are
eighteen commercial offices of the respective company throughout the world. It is considered to
be a technology giant of Russia and the largest search engine on internet in Russian, and the
company has a market stand in Russia with over 52 per cent. It’s website is also considered to be

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the fourth most popular website in the Russian nation. The company is competent to handle the
different multidimensional and multifaceted needs and preferences of the cosmopolitan
population of Russia who are completely dependent on digital portals and services. Yandex has
also formed a technological laboratory in Silicon Valley in America (Yandex.com.2020).
Value proposition
Value proposition can be defined as the promise to deliver a particular, unique and
remarkable value of a product or service to customers that make a product/ service class apart
from other products/ services. The main value of Yandex to the customers is that its flagship
search, e-mail, news and video streaming services that are available free of charge. The
company provides a range of products and services to the customers and also enables them to
integrate their accounts and preferences across multiple channels (Yandex.com.2020).
Industry analysis
The industry in which the company is operating is the technological industry. The
company has been operating in many sub- fields in the technological industries as well, such as
search algorithms, Artificial Intelligence, analytics, web development, digital marketing, SEO
(Search Engine Optimization) and automation technologies as well. The company Yandex
operates in a giant global commercial technological industry and has managed to build a
complete empire in the field of technological appliances and services.
Porter’s five forces of technological industry in Russia with reference of Yandex:
Threat to new entrants: Yandex is a technological giant in Russia. The technological market of
Russia has not seen such a colossal undertaking. Therefore, Yandex is exclusive in Russian tech
industry.

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Threat to substitutes: Technological industry of Russia demands new and innovative products
with Russian authenticity and Yandex caters to such needs. Therefore, the substitute of Yandex,
such as Google, has tough time in Russian countries.
Bargaining power of customers: Technological industry is always customer centric and Russian
tech industry is always optimizing customer requirements. Yandex’s biggest capability is it
focuses on customer needs more than anything else. Therefore, the company gets influenced by
bargaining power of customers.
Bargaining power of suppliers: Russia is a big country with rugged terrains and unpredictable
climate. Therefore, for providing logistic support to the technological companies, suppliers play
an important role and therefore, the suppliers of Yandex influence the company by instilling their
bargaining power (Dobbs 2014).
External macro-environmental analysis
Macro- environmental analysis, which is also commonly known as PEST analysis, deals with
Political, Economic, Social and Technological analysis of a particular company or industry and
its environment. The PEST analysis of the respective company Yandex is provided hereafter.
Political: Political factors play a very significant role in determining the factors that can impact
the business operations and profitability of the company. Yandex offers internet services and
products to dime-a-dozen countries and is exposed to heterogeneous political system and
environment. Political stability is important for internet service providers. Factors such as risks
of military invasion, level of corruption in public and private sectors, legal framework and
statutes regarding privacy and cyber laws are factors that determine the success of the company.

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Economic: the macro- environmental factors such as inflation rate, savings rate, interest rate,
foreign exchange rate and the economic cycle of nations determine the total demand and
investment that can be done by a company in a particular economy. Government interventions
regarding free market, education level, labor cost and productivity of the country are certain
factors that the company should take into account before setting up its business in a country.
Other significant factors include unemployment rate, inflation rate and interest average rates in
the respective country that are needed to be considered by Yandex.
Social: The culture of the society, the way of doing things, shared beliefs and attitudes of the
population play a great role in impacting the culture of an organization. Factors such as the
dynamics of the demography, skill levels of the population, class structure, hierarchy and power
structure of a society determines the cultural adaptations of the company. The entrepreneurial
spirits and ethics in the society, attitudes and general interests of the different communities play
an important role in profitability and strategic business objectives of the respective company.
Technological: Technology is fast disrupting various industries across the globe. A firm should
understand where they are standing in the technological sphere of the industry which would
determine the company’s ultimate success through proper infrastructural development. Factors
such as recent technological developments and trends in the market, digital impact on product
offering, rate of technological diffusion and impact on value chain structure in technology sector
are factors that need to be considered by the company (Gupta 2013).
Stakeholder analysis
The stakeholder analysis of the company Yandex is presented hereafter by utilizing the Salience
model.

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1. Discretionary stakeholders: The discretionary stakeholders of Yandex who have little
power on the company are the suppliers, the logistics assistants.
2. Dormant stakeholders: Dormant stakeholders have a lot of power but no legitimacy or
urgency and so, they are not heavily involved. For instance, the potential customers, the
outsourcing employees, suppliers.
3. Demanding stakeholders: Demanding stakeholders have a considerable amount of
interest in the company and can demand for change in products/ services but does not
have legitimacy. For instance, customers are the most important demanding stakeholders
of the company.
Strategic priorities
The company Yandex is a technological giant in the Russian countries and it should try to
focus on brining certain changes in their products and services or organizational structure that
would enable them with a particular competitive advantage not only in national but also
international technological market. Certain areas where the company can prioritize are
enumerated hereafter.
1. Yandex prioritizes user behavior: Google and Yandex are the most famous search
engines across the globe and both of them respect quality contents. However, Yandex
understands the needs and preferences of the users and therefore, to play in the market,
prioritizes popularity in contents which would be liked by the users. Yandex, therefore,
provides the users with most popular and entertaining contents in the digital portals,
thereby, keeping itself apart from the other conventional search engines.
2. Yandex prioritizes geo- targeting: Yandex is a company that hires eminent
anthropologists and ethnographers who learns and dissects different cultural patterns of

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Russian countries. With the help of the information and insights they gather, the company
makes business operations that cater to the needs and preferences of various cultures and
geopolitical dynamics.
3. Yandex prioritizes strategic partnership: with the help of intelligent and judicial strategic
partnership, the company has been able to carry out its business operations more
profoundly and expand its empire. A strong and loyal collaboration with different
technological companies have also provided the corporation with strategic innovative
ideas that has led to a competitive edge for the products and services it offers.
Key Capabilities of Yandex
Yandex has managed itself to become one of the most influential technological multinational
company in the Russian countries because of certain premium and exclusive capabilities it
possess. The capabilities of the company have been enumerated hereafter.
Dynamic Capabilities
1. Yandex is a capable portal: Yandex is the largest internet portal in Russia and it has
managed to become the largest media destination of the Russian countries. The respective
factor of the company has made it capable enough in the technological and internet genre.
Yandex is as popular as Google in Russia as it possess similar capabilities.
2. Yandex caters to the needs for Russian language search: Yandex has been specifically
made for the Russian population. It has been equipped well in order to better handle only
the Russian search challenges. In general, Google is not that useful when it comes to
linguistic variations. In that case, Yandex has played its card by being exclusively
linguistically motivated internet portal.

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3. Yandex serves better in android: In the Russian countries, Yandex has over 70 per cent of
Russian mobile market. However, Yandex in Russia has still 52 per cent of the search
market specifically in the devices that have android.
4. Yandex security algorithm keeps away spam: Yandex is an internet service that has a
strong algorithm that better handles spam. Yandex, through its smart algorithmic
programs, detects spam better than other services such as Google and tries to filter them
out for better service (Yandex.com.2020).
VRIN Analysis of Yandex
Valuable: Yandex is a technological giant of Russia, therefore, the products/services it provides
are premium and therefore, valuable.
Rare: Yandex is well equipped in terms of security and the level of optimization it provides is
rare while comparing the other technological companies in Russia.
Imperfectly Imitable: Products and services provided by Yandex is exclusive and cannot be
imitated at all. The service they provide are remarkably unique and premium and plagiarizing
such services is difficult for the other organizations.
Non- sustainable: products and services of Yandex are sustainable and eco- friendly in nature as
the company is concerned about environmental issues and ecological matters (Gander 2017).
Capability gaps in Yandex
Yandex has been performing quite well in the genre of technology and internet services till
now. Yandex is considered to be a technological giant in the Russian countries. However,

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there are certain areas where Yandex can improve itself. The capability gaps in Yandex can
be enumerated thereafter.
1. Delivery of internet services in remote areas: The remote areas of Russia are famous for
its rugged terrains and extreme climate. In such situation, consumers living in remote
areas have less expectations regarding the delivery of such internet services. In this case,
the foreign retailers have an opportunity to compete more effectively and diminish the
popularity of the respective company. Therefore, the company can take strict and solemn
actions regarding its popularity not even in towns and suburban areas, but also in the
remotest of the areas of Russian geographical region.
2. Diversification of the workforce: The workforce of Yandex company is highly
concentrated on the local workers mostly. The workers and employees are mostly
Russian. There is less diversification in the workforce. Lack of diversification of
workforce makes it difficult for the employees from different racial backgrounds to adjust
at the workplace, which has led to a loss of talent. Diversification of workforce might
enable the company with different perspectives, approaches and ideas and help the
company achieve its strategic business goals and objectives (Martin 2014).
3. High employee turnover rates: Apart from the organizational culture issues, it has been
noticed that the company Yandex sometimes fails to retain its employees. Yandex has a
higher amount of employee turnover rates which means that more people are leaving
their jobs and as a result, the company is spending more financial funds unnecessarily on
the areas of training and development and employee engagement as the employees keep
on coming and leaving. The organizational culture and dynamics of the company might
be having certain serious issues by which employees do not stay there for long. Or, the

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other reason could be that, the employees who are employed are young students who join
the company for professional experience and leave after they have successfully
completed their degrees or certifications thereafter. Therefore, the company should take a
keen watch on the reason behind such issues and try to solve the problems with the usage
of various strategies and tactics (Azanza, Moriano and Molero 2013).
4. Lack of morale: The company Yandex is successful in business while it is getting issues
in terms of employee engagement and human resource management. The company
Yandex has an organizational culture that does not motivate an employee to do good or
show his/her best for the organization. The organizational culture of the company does
not have adequate motivation and morale instincts and therefore, the organizational
culture of the company is relatively low and inadequate. This also can be the reason
behind the lack of employee loyalty within the organization that has led to high employee
turnover. Performance appraisal of the employees is not adequately provided by the
company. Employees are often not appraised for their performance. Such issues have led
to a complete lack of motivation within the organization (Yandex.com.2020).
Crafting a strategy for Yandex
Need for strategy
Strategies are important because it helps an organization to achieve its operational and
business goals. Strategies are the life line of an organization that helps it to get at the pinnacle of
success, and sometimes, also failure. In case of Yandex, the company should take up a strategy
in the area of organizational culture that would help the company increase its productivity and
profitability.

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Yandex has an organizational culture which is frigid in case of the employees. Yandex has an
organizational culture that does not motivate an employee to do good or show his/her best for the
organization. The organizational culture of the company does not have adequate motivation and
morale instincts and therefore, the organizational culture of the company is relatively low and
inadequate. This also can be the reason behind the lack of employee loyalty within the
organization that has led to high employee turnover. Performance appraisal of the employees is
not adequately provided by the company. Employees are often not appraised for their
performance. This reduces the efficiency of the work and operations carried out by the
departments. The tasks become too time consuming and monotonous for the employees if they
are not appraised or motivated properly (Alvesson and Sveningsson 2015).
The strategy
The strategy that the organization can take up under the canopy of employee engagement
is inclusion of diversity and a better performance appraisal system (both monetary and non
monetary) for the betterment of the employees of the organization. As it is already explained
earlier that the company has been facing issues such as ethnocentrism, low employee retention
and lack of morale among the employees, therefore, the respective strategy is indeed needed
(Awadh and Alyahya 2013). The respective strategy would ensure that the ethnocentric attitude
of the management of the company is diminished by allowing candidates from other races and
nationalities to take part in the workplace. The strategy would also ensure that the employees of
the company are engaged in a proper and scientific manner so that they tend to stick to the
organization and does not leave the organization very often. The company should make sure,
through proper implementation of the strategy, that the respective issues and areas are met with