Yahoo Strategy Analysis Presentation Transcript 1.

. The evolution of strategy Vikram Jethwani Business Strategy International Ins titute of Foreign Trade (IIFT) International Institute of Foreign Trade (IIFT) 2. Yahoo s Yahoos strategy: To what extent it was planned In an unidentified mark etplace, Yahoos strategy was to have no Yahoo s strategy, to began with Flexibili ty the only strategy, per se, that worked for Yahoo initially y y gy, p , y It r ecruited out-of-the-box thinking employees And let the creative energies make its billion-dollar fortunes The essence was to create new market, new products, new industries , p , - being futuristic in real sense Products were launched quietly - without much fanfare Grant Thornton International. All rights reserved. 3. Yahoo s Yahoos strategy: To what extent it was planned Co-founded by Jerry Yan g and David Filo Grant Thornton International. All rights reserved. 4. Emergent response to unforeseen events Yahoo aimed at excelling in future mar kets and not just to grab its share in the existing market Its initial strategy was subtle and focused toward branding, gy g, innovation and a flexible work cul ture Innovation was fostered to the extent possible In a human intellect based i ndustry, it is critical that the product edge is not lost because of human resou rce attrition To tackle this, Yahoo ensured that every engineer work on every pr oject Grant Thornton International. All rights reserved. 5. Emergent response to unforeseen events Yahoo aimed at excelling in future mar kets and not just to grab its share in the existing market Its initial strategy was subtle and focused toward branding, gy g, innovation and a flexible work cul ture Innovation was fostered to the extent possible In a human intellect based i ndustry, it is critical that the product edge is not lost because of human resou rce attrition To tackle this, Yahoo ensured that every engineer work on every pr oject Grant Thornton International. All rights reserved. 6. Positioning for slowdown The company emphasized on collaboration, while many of the players were too big to be acquired Its how-to rules helped it to remain cl ear, focused and organised p , g thereby enabling to meet unforeseen business co nditions However, its dependence on advertising revenues from dot com companies resulted in substantial loss (US$84 million against the profit of US$169 million in the corresponding period of previous year) in the first nine months of 2001 courtesy: the dot com burst This was an eye opener Grant Thornton International. All rights reserved. 7. What could be done? More diversification was required to reduce dependence on one p q p particular type of industry dot com companies in this case Revenue st reams need to be broadened with the change in economic environment Sector that a re relatively less-affected by economic slowdown could be targeted; entertainmen t being one of them Country-specific services could also be promoted Search engi ne services were set backstage with major focus on direct revenue S h i i tb k t ith j f di t generating streams Google captured this vacuum fast Grant Thornton International. All rights reserved. 8. Source of potential long-term advantage Where does it come from? Enhanced glo bal reach by setting up operational bases in different countries g y g p p Targe t-advertising was need of the hour for advertisers seeking to measure results an d avoid mass-oriented vague advertising Yahoo strikes the right cord here Yahoo keeps enjoying the first mover advantage on the Internet Grant Thornton Internat ional. All rights reserved. 9. Koogles resignation: Role of a CEO in a public company Full accountability tow ards stakeholders on companys performance y p y p Responsibility of analysing ind ustry trends, strengths, weaknesses, opportunities and threats Being responsive ignorance is bliss, but for a while! Developing and re-aligning strategies in re sponse to near to long term re aligning business environment Grant Thornton Inte rnational. All rights reserved. 10. Thanks. Th k Grant Thornton International. All rights reserved.