Amazon And Yahoo Building A Competitive Advantage

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Yahoo & Amazon: Building a Competitive Advantage

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Yahoo and Amazon- Building a Competitive Advantage

History of Amazon and Yahoo website

Yahoo was co founded by two Stanford phd candidates Jerry Yang and David Filo. Known as Jerry and David’s guide to the world wide web it was a way the two students kept track of their favourite internet websites. Working from their trailer the two would soon realize that the hiericharial list they had created had grown well beyond their expectations after it experienced its one million hit day. The two had the ideal situation as they had the most activity on their website in the internet without advertising. They then decided to turn their little online guide into a business(Santa Clara Valley Historical Association,2008).

The company was incorporated in 1995 and went public in 1996. Yahoo generates revenue from various forms of advrestisement both graphical and text based on its various wbesites and affilitaes such as Yahoo! Messenger, Yahoo! Mail, Yahoo! Groups, Connected TV , Flickr, and Yahoo! Answers. It also provides online properties through Yahoo! Properties and marketing services. (Reuters,2014). Yahoo! Properties can be divided into three sections, Search and Marketplaces,media and Communications and Communities. Yahoo! Is one of the most trafficked internet destinations today with over 500 million users, the largets network of integrated services and it has offices around the globe (Santa Clara Valley Historical Association,2008).

Amazon is one of the online retail company’s. launched in 1995 the company’s slogan then was that it was the largest bookstore on earth. However at the time it would actually place some orders from the publishers offices directly as they worked from Jeff Bezo’s garage who is the founder of Amazon. The first logo of Amazon showing the amazon river was liked by Bezo’s as he liked to relate the company to world’s longest river (Stone,2011). True to his ambition the company has grown to offer a wide selection of goods and services apart from its initial service of providing books. The company provides awide range of products and services available now such as music,movies,e book readers and even groceries currently (Capron & Pistre, 2012).

The company Amazon.com Inc was incorporated in 1996. The goal of the company in the 1990’s was to be Earth’s largest bookstore. The goal of the company now is to offer the largest selection on earth whilst ensuring that it is customer centric. Amazon believes on fulfilling the wishes of the customer first.The company’s core business is retail sales of numerous products and services. It also allows sellers to sell their products through their website. The company focuses on selection,convinince and price to ensure return customers to its services and this ahs helped it in its growth. The company operates on two fronts Amazon North America and Amazon international (Reuters,2014).

Key Strategic Differences that have Impacted the Relative Success of both Amazon.com and Yahoo.com

Amazon.com begaun as a web page that provided books to its customers in 1994. The company begaun its operations at Jeff Bezo’s the founder’s garage in Bellevue,Washington. With the help of Nick Hanauer of an initial investment of forty thousand dollars the company began shipping books to its customers though the company sis not have the books in stock than it would order the books from the publishers on behalf of ist customers. The company made changes to its website with the help of Tom Alburg to mnake it more user friendly. In 1998 the company launched a music store which helped the company to become one of the largest retailers in the internet. The reason for this was that Bezo’s wanted Amazon to become an online community something that has been achieved gradually over the years with the addition of new and varied products and services. He als added a feature that allowd clienbts to review books something that wasn’t available then (Zhu, 2004).

One of the ways that Amazon has been able to grow is by taking adavantage of promotional alliances and advertising, a good example of this si the partnership that amazon had with Yahoo! So as to increase the traffic on its site in the early days of the company. Yahoo! Searches would provide direct links to amazon book titles this was something that was not being fully utilized by competitors of the company such as Barnes and Noble. The visitors to Yahoo! Search would be advised to buy booksfrom Amazon that were related to the search topic. The adavantage of this strategy was that consumers became aware of Amazon’s services and products.Amazon also employed a pricing strategy that ensured that the products offered on their website were cost effective and this had the effect of increasing its sales volumes as customers would view a product at a store or a competitor and then order the same product from Amazon as it was cheaper.

Yahoo! has a vision of making the world’s daily habits to be more entertaining and inspiring. So as to achieve this vision the company has employed innovative employees. It has also focused on creating new products,acquiring new markets and industries such as Flickr. Initially Yahoo! was a web directory service, it then needed capital for expansion. The company then launched a variety of products such as content, e-mail, and ad space as it is one of the busiest sites online. Yahoo! then diversified its base after the burts of the interenet bubble to include services such as Flickr. The company also uses its producst such as Yahoo! finance and Sports to reach out to more consumers on the interenet. These products assist the company to be able to reach out to different segmnents of people who use the interenet. A good example would be Yahoo! Maktoub targeting users in the middle east and the arab world. The company has also worked towards making its products unique as searches on Yahoo! will bring up results that are slightly different from those of its competitors such as Google.

Comparing and Contrasting the Approaches to Strategic Planning

Yahoo has dominance in various areas in the internet. The first is Yahoo finance is a financial research and news website within the USA and recives more that thirty seven million unique visitors every month. The website offers several services such as financial reports, corporate press releases ,stock exchange rates and stock quotes. The site also has some financial management tools on offer to the consumers. The other service that has given Yahoo a competitive edge over its competitors is Yahoo sports.

Yahoo sports receives over forty five million unique visitors to its site in a month. One of the reasons for this is the prescence of fantasy sports, Yahoo sports is the most popular fantasy sports website. The reason for this is that the website is user friendly, easy to use and because of the integrated content. Another thriving service by the company is Yahoo weather which is a mobile offering. Yahoo weather is the power behind Apple’s iOS native weather app, this provides them with a very large user base in the mobile market. Yahoo is also responsible for powering Apple’s iOS native finance app. The company has also been able create a well reviewd and popular weather application that is stand alone setting new standards within this field. It is available on both Android and iOS (Amir Efrati, 2012).

Amazon like other start ups that have grown to become large organsiations has had a vision that it follows religiously. As the company has grown it has changed the vision from being earths largerst bookstore to offering earths largest selection. The reason fo this is so that the company can be able maximize on profitabilityinternal and external cutomer concerns and andy international challenges.

Distinctive Competencies to Shape the Strategies

Yahoo has been charged with not being in tune with their customers. In this age most individuals own a cell or mobile phone. The company needs to re evaluate what most people use their cell phones for. The growth in the mobile phone applications, has seen mobile phones cross over from just being communication tools to having smart and user friendly applications as an addon feature. The Iphone app store in july 2008 whenthe first I phone was launched had only 800apps, fast forward to may 2010 and the iphone app store had 200,000 apps available and in june 2013 the number of apps in the store had leaped to 900,000 apps. The app store has helped build buisnessse that did not exist prior and changed the way maobile users interact with their mobile phones. The advantage of the mobile phone apps is that every business that is web based ought to be able to develop a mobile app that allows its users tpo reach them on the go. This is especially true fror the businesses tha create media content that is web based.

Mobile phone apps have become a daily routine for mobile phone users and has become aan expectation and part of the routine of mobile phone users. Yahoo however has fallen behind in this field over the past couple of years. Amazon’s corporate gorvenance and mission states that it is committed to excellence to its stakeholders , employees,the customer,vendors,the international market and contratctors. The priority of the company is to improve on customer trust and reliability. The company faces a challenge in the current ongoing litigations as they may interfere with the company’s focus on achieveing this golas. As they can affect profitability which will be detrimental to the stakeholders of the company.

Functional Level Strategy for Amazon.com and Yahoo.com

Yahoo oughto be focusing on advancing and improving its mobile phones and their applications area in marketing. The focus should not only be on the applications but also on the creation of software for the mobile phones. Google was able to penetrate the mobile phoine market successfully using its android platform and google mobile phones. The company would definitely make waves and increase its popularity by entering the mobile phone market. the company can lso create its own social media networking site such as Google+ from google.Yahoo empoloys some of the most creative developers in the globe and if the company wouyld put the skills of this employees towards this two goals as the results would likey be spectacular.

Amazon has been a pace setter in its innovations in technology advancements ( Rumelt,1994). The initiatives undertyaken by the company include the deployment and building of some of the most efficient devises and software in the market. Amazon has also been able to launch the Amazon Web Server System. This is a system which provides technology services that give developers of both big and small ventrures. The acces to technological infrastructure has helped empower many forms of business. Amazon needs to balance its technological advancements and initiatives in a way that it limits its exposure to litigations and lawsuits. The company’s future may be dependsnat on how well it will be able to respond to any future and pending lawsuits (Sutcliffe,2013)

References

Amir Efrati, (2012). Yahoo CEO’s Letter to Employees About Layoffs. Retrieved from http://blogs.wsj.com/digits/2012/04/04/read-yahoo-ceos-letter-to-employees-about-layoffs/ on January 15, 2015.

Capron L., Pistre N. (2002). When do acquirer earn abnormal returns? Strategic Management Journal 23(9): 781–794

Hill, C., & Jones, G. R. (2013). Strategic management: An integrated approach (10th ed.). Independence, KY: Cengage

Reuters (2014). Profile:Amazon.com Inc (AMZN.O)Retrieved from http://www.reuters.com/finance/stocks/companyProfile?symbol=AMZN.O

Reuters (2014). Profile: Yahoo! Inc (YHOO.O). Retrieved from http://www.reuters.com/finance/stocks/companyProfile?symbol=YHOO.O

Rumeelt, R.P. (1994).Toward a strategic theory of the firm. In Competitive Strategic Management, Lamb R (ed). Prentice Hall: Engle-wood Cliffs, NJ; 556 to 570

Santa Clara Valley Historical Association (2008). Yahoo! Inc. Retrieved from http://www.siliconvalleyhistorical.org/#!yahoo-inc/cr1p

Stone, B. (2011). Amazon, the Company That Ate the World. Retrieved from http://www.businessweek.com/magazine/the-omnivore-09282011.html#p1

Sut cliffe K,M. (2013). What executives notice: accurate perceptions in top management teams? Academy of Management Journal (5): 1360–1378

Z-hu, K. (2004). The complementarity of information –technology- infrastructure and e-commerce capability: a resource-based assess.ment of their business value. Journal of Management Information Systems, 21(1), 167-202.