Yandex Strategies: Macro Environment and Competitive Analysis

This report provides a comprehensive analysis of Yandex, a technology company, examining its existing strategies and future goals. It delves into the macro environment using PESTEL analysis and assesses the competitive landscape with Porter's Five Forces model. The report identifies key capabilities and strategic positioning, focusing on the company's strengths in the Russian market. It highlights changes in the strategic context and discusses the importance of adapting to technological, political, and legal factors. Furthermore, the report suggests new strategies for Yandex to gain a competitive advantage, particularly emphasizing its user-friendly interface and ability to meet consumer needs. It concludes with recommendations for strategic alignment and communication, emphasizing the importance of building strong consumer relationships and focusing on the company's mission to navigate the world online and offline.

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YANDEX AND ITS STRATEGIES
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Executive Summary
In this paper, the company Yandex is discussed. The existing strategies and the goals of the
company is discussed. The PESTEL analysis and Porter’s Five Force model is also
mentioned while analysing the Macro Environment of the company. The new strategies that
the company must use to have a competitive advantage and how the strategies can be
communicated with the people is also addressed in the paper.

2YANDEX AND ITS STRATEGIES
Table of Contents
Preamble.....................................................................................................................................3
Strategic Context........................................................................................................................3
External Macro Environment.................................................................................................3
Political..............................................................................................................................4
Economic............................................................................................................................4
Social..................................................................................................................................5
Technological.....................................................................................................................5
Environmental....................................................................................................................5
Legal...................................................................................................................................6
Competitive Landscape..........................................................................................................6
Bargaining Power of the Supplier......................................................................................6
Bargaining Power of the Buyers........................................................................................6
Threat of New Entrants......................................................................................................7
Threat of Substitutes..........................................................................................................7
Existing Competition in the Industry.................................................................................7
Strategic Position...................................................................................................................7
Changes in Strategic Context.................................................................................................8
Capability Context.....................................................................................................................8
Key Capabilities.....................................................................................................................8
Current Capabilities...............................................................................................................9

3YANDEX AND ITS STRATEGIES
Crafting Strategy........................................................................................................................9
Implementation of the Strategy................................................................................................10
Communication of Strategy.................................................................................................10
Strategic Map.......................................................................................................................11
Strategic Alignment.............................................................................................................12
Conclusion................................................................................................................................13
Recommendations....................................................................................................................13
References................................................................................................................................15

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Preamble
Yandex is a technology company that has products and services, which are powered
by the machine learning. The goal of the company is to help the consumers in navigating the
world both online and offline. The company was established in the year 1997; the company
has been relevant locally for search and information services. The company is also leading in
the on-demand transportation services, navigation, and mobile applications for people across
the world (About Yandex, 2020).
The value proposition the Yandex has is that it is a flagship search engine, new and
video streaming services, email and other services that are not chargeable. The range of
products that are offered by them to the consumers can be integrated with their accounts and
preferences across a medium of different channels. The value proposition Yandex offers to
business is the network portfolio of the services and the portals and details of the consumers
that can provide the businesses an opportunity to grow, and have more leads and reach
(Kokoulina and Ermolaeva 2016).
The industry in which the company works is the technological sector. In this sector,
the companies offer hardware and software or companies that provide the consumers with
services related to the internet or the internet service. The industry can be classified into
different sub segments that are descried by the core of the business (Dutta, Geiger and Lanvin
2015). The technology companies offer their services and products to both consumers and
other businesses. The main competitors of the company is Google, Yahoo and Mail.ru Group.

5YANDEX AND ITS STRATEGIES
Strategic Context
External Macro Environment
To analyses, the external microenvironment of the company PESTEL analysis can be
used. PESTEL is the abbreviation for Political, Economic, Social, Technological,
Environmental and Legal. These factors affect the macro environment of the companies. The
change in the Macro environment creates an impact on the strategy and the competitive
landscape of a company (Ruff 2015). The factors can influence the firm’s profitability and
the competitive landscape.
Political
The political factors are one of the most significant factors that affect the macro
environment of the company. A company has to follow the guidelines that is set by the
government for that industry in every country they are operating in. Yandex’s profitability
can be impacted if the company does not follow the rules and the laws that are set by the
government. The company as is operating in different countries the company has to adhere to
the rules of all the countries (Sohel, Rahman and Uddin 2014). Different countries have
different rules for IT sectors and can vary from being liberal to rigid, for example in America
the rules for IT companies is liberal, whereas in China the rules are rigid and not a lot of
companies can enter the market.
Economic
The economy is one the major factors that affect the operations of the company. The
inflation rate, foreign exchange rate, savings rate and the interest rate affect the company.
Yandex must make sure that the country they are registering in has a stable economy and the
economy can be taken advantage of for the company to grow (Shatskaya, Samarina and
Nekhorosheva 2016). These factors can also be used to determine the need of industry in the

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market, the spending the consumers will have on the industry in general and the company in
specific. The company can analyse the economic factors and understand the growth
trajectory.
Social
The culture of the society and the system in which the society works creates an impact
on the culture of the company also in the environment. The company must understand the
culture and the system of the company in order to serve the consumers and the business of the
place in a more efficient manner (Menet 2016). The company as of now operates mainly in
Russia, Ukraine, Turkey, Kazakhstan, Belarus and Uzbekistan, thus it must be aware of the
society norms and the culture of these places, for it to provide the consumers what they want.
Technological
This factor affects the company most, as change in the technology means change in
the company. Yandex as a company has to cope-up with the change in the market to try to be
the best in the field of the IT Sector. The company heavily relies on the technology and any
change in this factor will have a huge impact on the company. The change in technology can
be seen a disruptor and must be used for an advantage, rather than it becoming a disadvantage
(Kauškale and Geipele 2017).
Environmental
The market for different industries have different environmental rules and guidelines
that must be followed by them. The laws and the rules differ within a country and the
company should be aware of them before entering into the market there. In the world of
today, the sustaining of the environment is a major concern and the countries are coming up
with laws that the companies must follow for a sustainable environment (Shatskaya,

7YANDEX AND ITS STRATEGIES
Samarina and Nekhorosheva 2016). Yandex as a company must use renewable energy for the
betterment of the environment.
Legal
The legal framework and the political factor can be seen to overlap with the political
factors, however they are different. These legal frameworks are used for the protection of the
Intellectual Property of the organisation. A company must ensure that the legal institutions of
the country are in place to protect the intellectual property rights (Menet 2016). Yandex as a
company must make sure that the market they are entering in protects their intellectual
property rights of the company and also the patents and the trademarks.
Competitive Landscape
The competitive landscape of a company can be measured by the using the Porter’s
Five Force Model. The Five Forces are Bargaining Power of the Suppliers, Bargaining Power
of the Buyer, Threat of Substitutes, Threat of New Entrants and Existing Competition.
Bargaining Power of the Supplier
It is the pressure that is applied by the suppliers on the company. The more the power
of the supplier the more the cost of the raw materials. It can also increase the competition in
the industry and lower the rate of growth and profit for the company (Dobbs 2014). As
Yandex is a technological firm the suppliers that the company has is less or none, thus the
bargaining power of the suppliers does not hold much effect on the company.
Bargaining Power of the Buyers
The buyers can exert pressure on the company to reduce the price of the service and
the products that the company offers. The buyers have the power to bargain and reduce the
profit margin of the company (Yunna and Yisheng 2014). Yandex as company offers services

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that are free of cost; therefore, the bargaining power of the buyers is of no use as the services
provided are free of cost.
Threat of New Entrants
The threat of new entrants in the sector that Yandex is in is low. The rules for new
entrant to enter the segment is rigid, and new companies do not want to enter the market as
the leading company has the most influence on the consumers and they do not wish to switch.
Threat of Substitutes
The more the substitutes in the market the more the consumers will be willing to
switch. The threat of substitutes of Yandex is huge as there are a many substitutes that are
there in the market. The threat is high if the substitutes offer more value proposition that is
different from the company.
Existing Competition in the Industry
There is a huge competition in the IT industry, the main competition that Yandex has
is Google. Google offers similar services to the consumer’s that are offered by Yandex and is
the leading company in that sector (Indiatsy, et. al 2014). Consumers tend to prefer Google to
Yandex as the interface and usage of Google is much easier to use by the consumers. The
businesses also prefer Google over Yandex as Google offers them more reach and penetration
into the market. Though the cost of advertisement in Google is higher than that of Yandex,
businesses prefer to use Google for the above mentioned reasons.
Strategic Position
Yandex can position itself in the minds of the people as a company that provides the
consumers what they are looking and meets their needs and expectations. The company must
develop strong relationship with the consumers. They should help the business in meeting
more leads. The company must focus on meeting the needs and expectations of the

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consumers, rather than trying to compete with the competition (Johnson 2016). Yandex as a
company should market itself as a service that is user friendly and easy to use that meets the
needs of the consumers. The mission of the company is to help the consumers and the
businesses to navigate the world both online and offline in a much better way. The company
must focus on the mission to create a niche for themselves in the market.
Changes in Strategic Context
The changes in strategy can change how the industry will operate in the coming years.
The change in strategy can be based on different reasons, the major reasons why there will be
change in the strategy in the coming years is due to the advancement in the technological
sector, the political factors and the legal factors (Rothaermel, 2016). The change in these
factors will affect the position of the company in 10 years and also the value proposition that
the company can offer to the consumers and the businesses. These changes will affect the
whole industry and not just Yandex in specific.
Capability Context
Key Capabilities
Yandex is the leading company in the market in Russia. The major advantages that
Yandex has over Google is (Schwartz, 2014):
 Yandex is a Portal: The Company is the biggest destination in Russia for
media. The services that are offered by Yandex are similar to Google products,
in different parts of the world Google is the leading company in the segment,
however in Russia Yandex is still the leading and most preferred.
 Better for Russian Language: Yandex as was specifically designed for the
Russian language the portal is better suited to the search challenges of Russia
and Russian speaking countries. Google as is not apt and effective in

10YANDEX AND ITS STRATEGIES
managing the queries of people not speaking English, it is however much
more ineffective with the Russian language.
 Popular on Android: Google has the ability to use the android system for
market growth, as it is the stock search for Android; in Russia, the Android
market has the most share and Yandex has the most share in the Android
market.
 Yandex is Russian: The Russians have a fondness of products and services
that are made in Russia. During the Snowden/NSA scandal, the people of
Russia distrust Google more and prefer to use Yandex.
 Better Account of Spam: In Russia, the internet is filled with spam and con.
The algorithms of Yandex is much more suitable to understand the spam
messages from the actual messages. Yandex uses keyword method and user
experience to filter out the spam messages that people receive.
Current Capabilities
The company though has a many advantages over Google; however, they are mainly
in Russia and the countries that speak Russia. Google has a better competitive advantage than
Yandex globally. The company only caters to the needs of the Russians and is not that
successful in the market otherwise, though the user interface is almost similar to that of
Google. Yandex has a more local market reach where it is dominant (Gerbet, Kumar and
Lauradoux 2016). Yandex must focus on going more global by understanding the needs of
the people globally. It must use the features it has to grow more and expand its reach. The
company will take time to expand in the market globally and must start creating a niche for
itself now to gain an advantage over the upcoming years.

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Crafting Strategy
The company as mentioned above has a lot of capabilities that can be used for
maintaining the competitive advantage that the company has or also to increase the
competitive advantage for the next 10 years.
 The company can use the advantage it has in detecting the spam messages, and
use it to grow more in the whole world. The spamming problem is the one that
is faced by all the people around the world. Yandex by using the algorithms
that it has to filter the spams can use it as a competitive advantage today and
also in the coming years.
 Yandex as has more resources in solving the queries for the people who speak
Russian, it can use that to better understand the other languages that even
Google cannot solve effectively. This will help the company in getting a
competitive advantage throughout the whole world. It will create a niche for
itself among the non-English speaking people.
 Yandex can make the service more user-friendly for the consumers to want to
use it. The user interface of the service must be easy to understand and use by
the people. It can also create a platform where the advertisements have more
reach and can be used for the businesses to create more leads that can be
converted by them.
Implementation of the Strategy
Communication of Strategy
The mission statement of the company is to offer the consumers and business a better
opportunity to explore the world online and offline. The mission statement can be drawn out
from the strategies that the company uses. The strategies that the company will use to have a