YAHOO CASE STUDY

Yahoo! An IFE Matrix Case Study

Yahoo! An IFE Matrix Case Study

Introduction

Yahoo! (Yahoo) is one of the leading global Internet businesses, providing Internet services to individuals and businesses worldwide. The company provides a range of services including search services, local offerings such as yellow pages, and market place offerings such as shopping, information, entertainment and communication. This paper will attempt to present an in depth analysis of the internal characteristics of Yahoo in order to develop an Internal Factor Evaluation Matrix for the company.

Discussion

In order to analyze Yahoo!, it is essential to acquire an understanding of the industry in which Yahoo operates and the manner in which Yahoo interacts with industry trends. Buyers include individual consumers, right through to large businesses. Brand awareness is high in this market, with companies such as Google Inc. being recognized worldwide. However, brand loyalty is unlikely to be a significant factor for commercial buyers, with quality and specification likely to be of higher importance. Success in this market requires skilled developers/programmers. Market players rely on the continued service of qualified employees, which contributes to strong supplier power.

Entry to the market requires a high level of technical expertise and may need significant investment in R&D activity. At present, the market is fragmented with a large number of companies of different sizes competing. However, there is a growing trend towards consolidation. Strong market growth in recent years alleviates rivalry to an extent. Buyers include individual consumers, right through to large businesses. A number of market players, such as Google Inc., generate the majority of their revenue from advertising. However, revenues from advertising are highly dependent on the volume of people using software and services. Market players have a wide variety of potential customers, weakening buyer power. Brand awareness is high in this market, with companies such as already mentioned Google Inc. being recognized worldwide.

While businesses placing online advertising may not be influenced directly by the Google brand, its popularity with Internet users will make it a more attractive proposition than a less widely-known search engine as a platform for advertising. Switching costs for buyers are dependent upon the software or service being used. For example, ISPs may supply Internet access through contracts of varying terms; companies offering URL registrations might charge up front for a customer to own the address for one year (Yahoo!, 2009). Software and services offered by market players are generally of medium to high importance to customers, and are critical for customers such as online retailers, thus weakening buyer power. Overall, there is a moderate degree of buyer power in this market. The Internet software and services market requires various inputs including employees, hardware such as servers, and software tools. Success in this market requires skilled developers/programmers.

Inputs such as hardware components are often purchased from sole suppliers. Such suppliers are often large companies offering differentiated products, resulting in significant supplier power, strengthened by theirs significant negotiating power. Furthermore, the quality (speed, reliability, energy efficiency) of hardware such as servers ...