9-3 Final

BUS 4993

Draft - Case Analysis

Greg Tavarez

Professor Hashmi

Capella University

11/19/17

TABLE OF CONTENTS

Abstract…………………………………………………………………………….3

Introduction……………………………………………………………………….4

Business overview…………………………………………………………………5

Problem statement………………………………………………………………….5

Company’s competencies………………………………………………………….7

Strategies followed by the CEO………………………………………………….…8

Board of director’s strategic intent and their effectiveness…………………………8

Recommendations…………………………………………………………………...9

References………………………………………………………………………….11

Abstract

The case talks about the Marissa Mayer initiatives taken at Yahoo, Inc. after joining as the CEO in 2012. It is clear that Yahoo had been having challenges and lost the increasing dominance, especially in internet services. The primary objectives assigned to Marissa Mayer, the former Google executive, was reviving the organizational fortunes. Marissa began to focus on changing the Yahoo culture as the primary strategy to turn around the company and put it back to the competitive position as soon as she took over the CEO. Over the times, Yahoo had taken back an awful reputation for being a company bearing bureaucratic culture which strangled creativity and expansion.

The CEO began several initiatives to ensure that the organization had become democratic. She began hiring many new individuals for essential posts with the aim to change the Yahoo culture (Thomas, David & Charles, 2017). Among the significant initiatives Mayer started, the most important one was PB&J program that encouraged individuals to render ideas on how to make Yahoo the most favorable organization to work. The PB&J program was not the sole influential initiative, Mayer also began efforts with the objective to lower bureaucracy at the group and introduce effective compensation initiatives.

Regarding the ability of the new enterprises to changing the company culture in a limited time, analysts bore mixed opinions on the issues. Some argued that it would not be easy to dismantle an organizational culture in a limited time, especially since the organization had seen a leadership difficulty with successive executives. The discussion will center on this case and how important or influential these decisions were of organizational culture.

Introduction

The entity, in this case, Yahoo Inc. is among the globe’s leading online networks incorporated services provider having a combined user base in more than five million. Yahoo offers a wide array of network services, however over its 17 years of existence, there has been the rise of entities providing similar services. It is clear that the current players assumed the specializing path in a given kind of service while others introduced a whole array of new services. Yahoo has been facing increased competition from dominant market players, such as Google. Technology advancement has become an essential aspect of human adaptation.

There are powerful forces that drive the globe to the cultural level ground, and it is critical to a company operating at this level to put all these into considerations. The force was developed and began as an individual website by both David Filo and Yang. These two had a dream of prospering income from the web directory by allowing businesses to have their commodities and services advertised in this online catalog. The creative idea caught many investors attention because of commodity preference moved from the origins to across the global divide.

Through technological channels that extended the growth of new markets in various sectors across the world, the popularity of the commodity grew instantly. Yahoo Inc. gained investors, as well as competitors once there was growth in the expansion. The competitors brought changes in a whole new way, and the company had to make changes on the objectives, business concept and both internal and outside environment and approach. The entity held on the likely return following vertical integration approach that would have accelerated the business performance and get hold of the lost bases to the main market leader. The decision to recruit Marissa Mayer indicates an exclusive understanding Yahoo faced a challenge posed by Google, as both the CEO and CFO know well the Google executive background before joining Yahoo.

Business overview

Yahoo! Was initially designed to offer form to various websites categories. It started with a navigational guide to the World Wide Web expansion. The entity became among the top providers in the World Wide Web search engines and competing for head-on with Google. The business later became to the leadership transition, which made the company direction to move towards advertising end for income. The change of CEOs came about following increased competition over internet advertising space. One of the China's most prominent company where Yahoo invested one billion dollars was the Alibaba group who received forty percent share of equity. Additionally, Alibaba also assumed the mandates to run the Yahoo China website. Yahoo reinvested half of its investment in Alibaba for 7.6 billion dollars since yahoo’s primary objective was maximizing the tax bill capital gains.

Problem statement

When the company regained the investment proceeds, a more significant challenge came along for Melissa Mayer. The CEO's first actions (essential acquisitions) went out of play following increased pressure from the shareholders. The pressure from the shareholders forms part of the reasons a business of this caliber was shut down from its exclusive potential and collapse. The shareholder's mindset prevented the fulfillment of the CEOs ideas. In the process of all this taking place, the business throughout period lost its market identity. On the other hand, Mayer’s additional difficulty fell under re-establishment of Yahoo as one of primary market competitors. There was a drastic change in the company’s revenue since it changed from being known as a professional corporation to more of a firm doing advertising. Mayer’s experience was in the technology field, and this transition became even more challenging. The newly appointed CEO had received the resources as a result of the investment, and she could use them on weak geographical locations of Yahoo, which resided in both Asia and Africa. In that case, it meant that with the direction the advertising and technical world is headed, Mayer would be expected to reason out the innovative strategies that will work.

The company will exclusively take this direction, and in future, Yahoo will largely depend on the resources reinvestment patterns. If Mayer reached on a decision to focus on the mobile in line with industry demands, she would have to introduce or improve Yahoo current mobile standards. Additionally, Mayer can pay attention to enhancing the geographic regions that the business is presently weak by developing and implementing underlying investments or acquisitions. It is also vital for the CEO to decide on the path to assume which will be accepted by the shareholders and this will start to change the corporation image as well as the reputation.

The company’s reputation had also been damaged following the falsification of the CEO Scott Thompson resume. It was necessary to improve all the business aspects the work culture and productivity did not meet the required standards according to Mayer. To gain better productivity, it was essential for the management and hiring of employees to improve exclusively. The services offered by Yahoo required to move towards where the global technology was headed. For improvement to be seen in coming years, the company finances needed to be structured, and the burden was on Mayer’s shoulders to resolve.

Figure 1

Company’s core competencies

It appears as if the company is better poised on its internal environment than external environment primarily based on the above description and the company’s forecasted analysis. The business requires improvisation on the assets and brands to raise market share and efficiency. The beginning of the new approach of refocusing the company towards its competencies came with laying off fourteen percent of its employees. The move was for the sake of innovation implementation, and also it would give the management a simpler leverage upon the workers. It is evident as the CEO Mayer took the initiative immediately and offered workers free lunch, technological equipment change as well as making it upon herself in reviewing every single recruit.

The operation move will assist the corporation in achieving the intimate surrounding of the business and also impact the commodity portfolio (Goodman, 2017). Yahoo leads in the sector concerning the services and commodities they provide. In turn, this offers the chance for the entity for vertical integration, and the core competency comes in handy with innovation ability in designing redefined value adding traits for several services.

The effectiveness of Yahoo marketing services and its potential to attract clients and publishers is another core competency. The original business structure depended on contextual marketing and providing a premium search engine for the World Wide Web. In that case, it is a clear illustration of Yahoo's ability strength and its capabilities they can implement.

Strategies to be followed by the CEO

Creating a reliable system and improving the services to develop a mobile-friendly globe are the two main strategies that will help in redefining Yahoo. Yahoo will globally dominate in the services they offer as a result of creating a well-balanced geographic structure. In turn, the company will record increased income and popularity across the world. With a strong base, Yahoo will collect acquisition and innovative ideas opportunities they can offer for specific areas. Global client satisfaction will result to yahoo’s improved image and help the company re-enter as a primary competitor. Yahoo needs to focus on integrating their services to become mobile friendly especially for regions that are up to date in the technological globe. It is also essential for the entity to introduce services that are mobile-specific whether it concerns media, storage or any other.

Board of director’s strategic intent and their effectiveness.

There has been a rapid growth of internet sector, and with minimum challenges to entry and reduced switching fees, technological factors mostly impact yahoo. The board of directors’ currents faces the challenge of establishing Yahoo’s identity which is a strategic intent. The company’s primary source of revenue was advertisement since it began as a technology entity. Instead of leaning towards media, the company needs to work on advertising to gain a competitive advantage against the leading competitors.

Assuming this strategy will see the company take its first step to redefining the technological image. The policy would not satisfy the competitors because running a technology-based entity an individual will require having a clear understanding of the features aspects, though the board of directors earlier was against having CEO bearing a technological background. To raise the growth within the technology arena, it is essential to have an individual who understands the sector and the demands.

Recommendations

The internal core competencies and management of the workers are the keys to a great business. Motivated employees will help an organization to improve productivity and achieve consumer satisfaction. Mayer’s initial plan is an excellent approach, and it is the best recommendation for the business (Wunder, 2016). It is essential for the management to ensure that employees remain motivated and also the CEO need to have core competencies listed for every employee. For instance, the organization can have a monthly award for the best employee in line with performance. Another thing that needs to be present in a group is effective communication, and this helps in seeing the employees’ needs through improvement of internal communication.

Motivate

Deliver

Google has been a top rival for Yahoo, and it is vital to ensure they develop strategies to ensure they are better than them or doing things differently (2015). In that case, it would be recommended that the company pays attention to commodity innovation and lean towards increased energy efficient commodities and services. The recommendation will see the business strengthen the connection with clients and businesses that need increased storage, applications, and others.

References:

Pearce, J. A., & Robinson, R. B. (2015). Strategic management (14th ed.). New York, NY: McGraw Hill. ISBN: 9780077862510.

Strategic Management: Competitiveness & Globalization: Concepts, 11th Edition. (2015). ProtoView,

Thomas L., W., J. David, H., Alan N., H., & Charles E., B. (2017). Concepts in Strategic Management and Business Policy: Globalization, Innovation and Sustainability, Global Edition. Harlow, United Kingdom: Pearson.

Goodman, M. (2017). Creativity and Strategic Innovation Management: Directions for Future Value in Changing Times. Abingdon, Oxon: Routledge.

Wunder, T. (2016). Essentials of Strategic Management: Effective Formulation and Execution of Strategy. Stuttgart: Schäffer Poeschel.

http://www.businessinsider.com/how-marissa-mayer-changed-yahoo-charts-2016-7?IR=T

EMPLOYEES’

COMPANY