This is the in-depth analysis of renowned search company named Yahoo. This porter analysis of Yahoo will discuss the important factors which is directly impacting the company.
An American multinational corporation, Yahoo, was founded by two electrical engineers Jerry Yang and David Filo. They initiated a website in 1994 called ‘Jerry and David’s guide to the World Wide Web’. In April 1994, it was renamed ‘Yahoo’ and its domain came into being in 1995. It grew exponentially in 1990s. In 2011, Yahoo was worth US$22.24 billion. Its headquarters is based in Sunnyvale, California in USA. (Singh, 2014)
Competition in The Industry
Since the advancement of the internet industry, Yahoo faces a lot of rivals in the market. The biggest competition is the local giant Google but internationally it competes with Baidu and AOL Inc. (Nguyễn, 2014) The competition is cut throat as all of these offer variety of internet products, advertisement services and technologies which are quite similar to Yahoo and the company has to invest in its R&D to offer unique and beneficial services to its consumers. (Singh, 2014)
Yahoo has a unique take on business news by providing its users with a finance page where the stock-rates and information regarding the companies are available. However compared to Google, Yahoo has a long way to go to attain the majority of the clientele. By going mobile and introducing a lot of phone applications Yahoo has managed to increase its users by 150 million. But they have to catch up in this development to surpass the competition. (Selvya)
Potential Of New Entrants into the Industry
The potential of new companies into the market is moderate since developing a website with the availability of huge investment and efficient workforce is not a hard job. The technology is easy to imitate and improve upon these days. Everyone is offering the same services with their own personal touch to them which makes them exclusive. However new entrants have to beat the existing competition and turn up with the distinctive strategies to attract the people. This makes the threat of new competition quite low. They need experience to enter the market and with considerable training, it is possible. (Selvya)
When Yahoo entered the market the cost to website development was quite low, their establishment was strong and inexpensive. But now times have changed.
Power of Suppliers
Yahoo is dependent upon other existing technologies to improve upon its own. This puts the suppliers higher in the power chain. For instance Yahoo procured Xobni in order to improve upon its email service so the users can have access to easy communication. (Selvya)
There are fewer choices of suppliers in the market so the companies make deals with the competitors in order to promote each other. Since Yahoo is looking forward to develop its mobile services, it is dependent on a lot of external technology to help its ideas turn into reality.
Power of Buyers
With so many search engines at disposal, the buyers have low switching costs and can choose to do whatever suits them best which makes the power of buyers moderate. Through Yahoo they have a platform to advertise themselves. This weakens the power of the buyer.By decreasing the cost of switching Yahoo has increased the buying power. Yahoo has to offer that exclusivity of its services to its users to make its users not switch. (Selvya)
Threat Of Substitute Products
The threat of the substitute in the form of TVs, newspaper and any other old encyclopedia is very low. Due to this reason the internet market is growing in relevance. Within the internet industry, Yahoo is easily replaced by Google, AOL and Baidu. However Yahoo has something significantly distinctive in the running. It is Tumblr which is a platform to share and create videos and re-blogging. This acquisition by yahoo is unchangeable with any other application. (Nguyễn, 2014)Yahoo invests in its employees and takes a lot of interviews to setup an intelligent team to satisfy the needs and demands of its consumers.
Conclusion
Since 2013, Yahoo is striving to move forward and up in the market chain and has acquired a lot of existing companies to develop new setups. For instance the Net Controls was acquired by Yahoo to be turned into Yahoo Search Engine. Tumblr was bought by Yahoo to increase its worth. (Selvya) Yahoo offers mail, messenger, shopping travel, web hosting and advertisements. (Singh, 2014) It earns its revenues from that.
Being a part of global culture Yahoo bears a responsibility to provide the safest and most functional services to the people. Being a part of global culture Yahoo bears a responsibility to provide the safest and most functional services to the people.
Bibliography
Nguyễn, E. (2014, April 23). Copy of Yahoo’s porter 5 forces. Retrieved from Prezi: https://prezi.com/d6maj3gjvunv/copy-of-yahoos-porter-5-forces/
Selvya, N. (n.d.). Yahoo Company Analaysis . Retrieved from WordPress: https://nancleyva.files.wordpress.com/2014/09/yahoo-final-version.docx
Singh, H. (2014, September 21). Business Analysis on Yahoo. Retrieved from Slideshare: https://www.slideshare.net/harnoor992/business-analysis-to-yahoo