Question

Please conduct an external analysis of the company Yahoo. Use these methods to make the analysis: PESTEL, Industry Structure, Five Forces, Industry Dynamics, Strategic Groups, mobility barriers.

Answer 1

Yahoo has been one of the global platforms for sharing content of every genre through email. Yahoo is social networks where individuals not only share content but also interact with each other with the chat feature.

PESTLE ANALYSIS

Political Factors

The political factors include the rules and policies of the government in which Yahoo has been accessed. As Yahoo has been an open platform and everyone can share content with each other as per the policy, there are certain legal cyber rules that need to be followed by Yahoo.

Economic Factors

The economic factors include the Exchange rates of the state in which the platform has been accessed. The recession element is also one of the mainstream elements in the upbringing of the dynamic social network group like Yahoo. Apart from these attributes pertaining to the economic factors the Price which the individuals or the clients of a state in the state are ready to pay for the technological reforms also affect the business of Yahoo.

Social Factors

The social factors encompass the technical trends in the society. Certainly, the modern societies are more interested in the internet and social networking. The societies which have a sense of latest technology and are always eager to adopt the contemporary internet trends will always welcome the innovations by the websites like Yahoo.

Technological Factors

Technology has its ramifications in every sphere of life. Yahoo being purely technology oriented website, so technological factors are always the major ingredient for the business of social networking website like Yahoo.

Legal Factors

Yahoo has been one of the leading online social networking websites. It is always best to understand the external as well as the internal factors that affect the company as a whole. There have been many competitors to Yahoo now.

Environmental Factors

The environmental factors encompass various global environment safety laws that must abide by the global standards. The World has now taken the vow in making the planet a beautiful and pollution free. In this perspective, all the international organizations are playing their role in showing the support to the world.

INDUSTRY STRUCTURE

Yahoo is now part of Oath, a Verizon company; and the INDUSTRY structure being used is largely the same as many other tech companies; you’ve got the chief executive at the top providing the vision and direction for the organization, with a collection of C-level executives reporting to them; your CMO, CFO, CTO, COO, etc. Under those C-level executives, VPs that run the more specific functions for the company, handling sales, marketing, product development, platforms, internal technology, etc.

FIVE FORCES

First, Yahoo! analyzes the Threat of New Entrants coming into the Web industry.

The Threat of New Entrants refers to "the possibility that the profits of established firms in the industry may be eroded by new competitors"In Yahoo!'s industry, it is relatively easy for any firm to have an eye-catching website. A new entrant can be a firm in its beginning years who does not have a significantly large budget, but could better serve consumers wanting specific products or services because of new technology it owns.

Bargaining Power of Buyers in an industry. "Buyers threaten an industry by forcing down prices, bargaining for higher quality or more services, and playing competitors against each other" With Yahoo! expanding their search capabilities by adding new features like its alliance with SBC communications, adding WUF Networks Inc., and HotJobs.com, Semel is aiming to keep more of Yahoo!'s consumers within the Yahoo! website and prevent them from exiting to search on a competitor's sites.

The Bargaining Power of Suppliers

Yahoo! is an intermediary between some buyers (consumers) and sellers (advertisers) and is business-to-business oriented. Suppliers can make arrangements on the Internet to make searching and buying easier for consumers and prevent them from switching.

Any company in an industry needs to keep a watchful eye for the Threat of Substitute Products and Services. "Substitutes limit the potential returns of an industry by placing a ceiling on the prices that firms in that industry can profitably charge" A firm can research what products and services other firms are selling and make substitute products or services. This is the case for Yahoo!'s digital theme part Semel is pushing into effect.

Intensity of Rivalry Among Competitors in an Industry "Because the Internet creates more tools and means for competing, rivalry among competitors is likely to be more intense" Google is Yahoo!'s biggest competitor, and is regarded "as the most prominent search engine in most parts of the world" . Semel and his team have been dedicated to increase Yahoo!'s search engine capabilities to compete with competitors like Google, MSN, and AOL.