Competition Analysis of Yahoo!

Competition Analysis of bumpkin hayseed CompetitionTodays society relies heavily on the internet. People offer spend hours a day on the internet, either for work or pleasure. With all the countless hours on the computer, what are people supposedly doing? chawbacon desires to be the location that people spend all their time. How will rube create and sustain hawkish advantage? What strategy will outgo serve Yahoo on the race to the top between the other steadfasts looking to have a digital theme park? To understand how Yahoo plans to keep up with the changing economy, the resource-based view strategic model leave alones the analysis of both the internal and external perspectives of the firm. To create and sustain a competitive advantage Yahoo should result for for divers(prenominal)iation and focalize to its service.The resource-based view analyzes how the conspicuous resources, intangible resources, and the organisational capabilities work together to form a competitive advantage. For Yahoo to have a competitive advantage against other companies with the same goal of the digital theme park, Yahoo must take advantage of their tangible and intangible resources.Yahoos tangible resources accept financial, physical, technological, and organizational sources. Yahoo started to turn around financially after Terry S. Semel took over as CEO. Semel brought structure and order to the spontaneity that drove the firms decision during its go-go days (Shamsie, 2007, p. 792). Yahoo relied heavily on advertising for revenues of the firm under the old management. After Semel took over, he did non feel soft on relying only on advertising. Semel and his Product Council allowed premium services to be offered at a low rate. These low rates and advertising raised the social clubs net assets.Yahoos physical tangible resources include the company headquarters. After Semel took over, he moved swiftly to chop down the 44 business unitsto 5 (Shamsie, 2007, p. 792). The cho pping down of cubicles also relates to the organizational tangible resources. Semel whole new order changed Yahoo as a whole. The care- devoid culture turned into a culture with more order and structure. Yahoos newly founded Product Council is made up of a group of managers. These managers have to make formal presentations to stick up their new ideas in weekly meetings (Shamsie, 2007, p.792).On the technological sector of the tangible resources, Yahoo has assay engine and other premium service technology. The search engine technology is from the company Inktomi. Analysts claim that in terms of technology, Inktomi offers a search engine that is better than most others (Shamsie, 2007, p. 796). The other premium services include job-hunting, personals, music, games, e-mail, and yellow pages. Yahoo acquired the job-hunting service from the buyout of HotJobs.com in 2002the addition of this premium service has provided a significant boost to the firms revenue (Shamsie, 2007, p.795). Yah oos technology is directly related to the financial market of Yahoo. As Yahoos technology increased, the revenue of the firm also increased. An advantage in the technological sector that Yahoo possess is Yahoos Yellow Pages, which provide them customers with the return addresses and driving maps when searching and typing in area computer code (Shamsie, 2007, p 797). Semel also made deals with SBC Communications and Verizon Communications to help move Yahoo into the broadband age.Yahoos intangible resources include human skills, innovation and creativity, and the firms reputation. Semel is the reason Yahoo turned around. Semel possess human skills that are not imit equal. Semel has also used the deal-making skills that made him a legend in the movie business to land crucial acquisitions and partnerships that would allow Yahoo to tap into new sources of advertising revenue (Shamsie, 2007, p. 793). Semel pushed through deals that the old CEOs could not get. Innovation and creativity sectors include Semels organizational views and the creativity that came to the Product Council meetings. The last of the intangible resources is Yahoos reputation. Yahoo has been around for years, it is known for its free e-mail service, search engine, and its instant messenger. People can pay a little extra for a premium e-mail service that has a larger storage space than the free e-mail. Yahoo is also known for its free financial pages called Yahoo Finance, which gives up-to-date information on stocks and bonds.Lastly, the resource-based view looks at the organizational capabilities which are the fightncies or skills that a firm employs to transform inputs into outputs (Dess, Lumkin, Eisner 2003, p.93). Yahoos organizational capabilities are the innovativeness of new and multiple services at one location. Yahoo is no longer just a search engine, it is a powerhouse of different features that all intertwine together to create this multi-cultural funhouse.For Yahoo to gain the co mpetitive edge against the other firms like Google, MSN, and AOL, Yahoo can focus on differentiation between its products. Porters three generic strategies involves overall bell leadership, differentiation, and focus. Overall cost leadership will not help Yahoo sustain competitive advantage, but the combination of differentiation and focus will allow Yahoo to outrun the other companies.Although most of the time, differentiation leads to failure but in Yahoos case with its different vex areas that are already occurring differentiation will lead to success. A differentiation strategy involves providing unique, high-quality products and services that promote a favorable reputation and strong brand identity and commonly command a premium price (Dess, Lumkin, Eisner 2003, p.209). Yahoo already exhibits a strong brand identity since almost everyone in the world would know what Yahoo is. Google has become one of the leading search engines in only four years because it can search millio ns of web-pages in milliseconds. Yahoo can now compete with Google when Yahoo made a deal with Inktomi for a new search engine. Inktomi offers a search engine that is better than most others (Shamsie, 2007, p.796).Yahoo has many areas of interest that pertain to all different types of people. Yahoo offers personal pages, email, financial pages, job-hunting service, etc. For the younger generation, Yahoo offers on-line games, chatting, and a messenger service. Yahoo already has place its products, but so have the competitors. Yahoo needs to obtain unique services that their competitors do not have. One thing that is unique for Yahoo is the oblation of music to its customers. Viewers can go on-line and watch music videos for free or for a fee, without commercial breaks. Yahoo also differentiates its look to go with the seasons, not all web-pages do this.Using the combination of differentiation and focus strategies, Yahoo will be able to focus individually on the different sectors of services. For companies that pursue focus strategies, the Internet offers new avenues in which to compete because they can access markets less expensively and provide more services and features (Dess, Lumkin, Eisner 2003, p.301). As Yahoo accesses their intangible and tangible resources, managers can figure out which services to differentiate and which services need have a narrower focus. The tangible technological resources are the services that managers need to distinguish as profitable and valuable, and which services are not helping the company succeed in the jump to digital theme park. Semel should allow more focus to the product council meetings, so that managers would be able to get different services recognized. For the digital economy, the combination strategy of differentiation and focus is the best to have.The companys resources all working together creates a successful business. Yahoo demonstrates how a company can use the strategies of the resource based view, differe ntiation, and focus to obtain a sustainable competitive advantage. As long as Yahoo uses their tangible and intangible resources efficiently and effectively they will be able to advance and compete with the other companies such as Google, MSN, and AOL.Tangible ResourcesFinancial- cut costs, advertising, premium servicesPhysical- CubiclesTechnological- Inktomi search engine, HotJobs, yellow pages, other featuresOrganizational- Product Council, structure impalpable ResourcesHuman- Semels deal making skillsInnovation and Creativity- meetingsReputation- free services, search engineOrganizational CapabilitiesMaking a digital theme parkDifferentiation and cerebrateServices offeredDesign/AppearanceBrand IdentityReputationReferencesDess, G. Gregory, Lumpkin, G.T., Eisner, B. Alan. (2007). Strategic Management 3e. modernistic York, NY McGraw-Hill.Shamsie, Jamal. Yahoo. Michigan State University. Strategic Management 3e. (792-797). New York, NY McGraw-Hill.