Yahoo analysis report

1. Course: Strategic Management – BUS 444
Lecturer: Professor Thomas Bradley
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ANALYSIS REPORT
Group 7
NGUYỄN TRẦN QUỐC ANH – 295898
HỨA BẢO DUY – 295893
DIỆP QUANG HUY – 295888

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Table Of Contents
Introduction ---------------------------------------------------------------------------------------------------- 1
Yahoo’s proble ms------------------------------------------------------------------------------------------ 1
Mission statement--------------------------------------------------------------------------------------------- 2
Vision------------------------------------------------------------------------------------------------------------- 2
Objectives ------------------------------------------------------------------------------------------------------- 3
Strategies -------------------------------------------------------------------------------------------------------- 3
Services and Products --------------------------------------------------------------------------------------- 4
Financial Analysis -------------------------------------------------------------------------------------------- 7
Competition and Market condition---------------------------------------------------------------------- 8
S.W.O.T --------------------------------------------------------------------------------------------------------- 9
Strengths ---------------------------------------------------------------------------------------------------- 10
Weaknesses ------------------------------------------------------------------------------------------------- 11
Opportunities ---------------------------------------------------------------------------------------------- 11
Threats ------------------------------------------------------------------------------------------------------- 12
The Competitive Profile Matrix ------------------------------------------------------------------------- 13
The EFE Matrix---------------------------------------------------------------------------------------------- 15
The IFE Matrix----------------------------------------------------------------------------------------------- 17
Life cycle ------------------------------------------------------------------------------------------------------- 19
SPACE Matrix------------------------------------------------------------------------------------------------ 20

3. Inte rnal dimension --------------------------------------------------------------------------------------- 24
External dimension--------------------------------------------------------------------------------------- 25
Grand Matrix ------------------------------------------------------------------------------------------------- 27
Market development ------------------------------------------------------------------------------------- 27
Market penetration -------------------------------------------------------------------------------------- 28
Product development ------------------------------------------------------------------------------------ 29
Quantitative Strategic Planning Matrix--------------------------------------------------------------- 30
Recommendation strategies------------------------------------------------------------------------------- 32
Long term Objectives ------------------------------------------------------------------------------------ 32
Recommended Strategy --------------------------------------------------------------------------------- 32
Improving current service --------------------------------------------------------------------------- 33
Changing policy of service--------------------------------------------------------------------------- 33
Developing new product ----------------------------------------------------------------------------- 34
Pushing marketing campaign ---------------------------------------------------------------------- 34
Timetable------------------------------------------------------------------------------------------------------- 36
Financial Prediction----------------------------------------------------------------------------------------- 37
Conclusion ----------------------------------------------------------------------------------------------------- 39
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Introduction
Yahoo was formed by two Electrical Engineering PHD candidates from Stanford Univers it y,
David Filo and Jerry Yang in 1994. They started Yahoo for personnel interest with no intention
to developing it and to become a world recognized search engine.
The initial name founded by these 2 people was “Jerry and Yang’s guide to the world wide
web” and after which they identified a new name for Yahoo! which is an abbreviation for “Yet
another Hierarchical Officious Oracle”.
Yahoo is headquartered in Sunnyvale, California, and has offices in 25 countries, provinces,
and territories.
In this report the following methodology will be used to analyze the company’s competit ive
advantages among other Internet service providers and its potential in the industry.
There is no clear indication for Yahoo vision statement. However, our suggestion is to use
Yahoo’s strategy as a substitute for mission statement.
“Yahoo’s powers and delights our communities of users, advertisers, and publishers – all of us
united in creating indispensable experiences, and fueled by trust Yahoo! powers and delights”
Yahoo’s problems
Yahoo lost a large part of market share because of bad customer service, slow in recognizing,
changing technology and their concentration on mobile device services market. I led Yahoo’s
revenue to go down in recent years, and continuously changing in top leaders. As a result of it,
Yahoo lost its direction in development.

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Mission statement
ith the Yahoo!’s reputation, Yahoo! always go fast and provide the best service for
its customer. Yahoo! let its user lead the way of their development, it
W
offers the service that its customer expect. Its customer
can looking for what they want by any internet
connected device. Yahoo!’s employees are
rewarded for curiosity and celebrate explorers, relying on its
passionate and transformative talent to do what's right for its
users.
Vision
Yahoo! was one of top company in communication and information
technique services in the world. Yahoo! recognized that people
around the world want to connect each other as fast as
possible in everywhere. The smartphone world are
significantly developing, in order to follow that movement, Yahoo!
changes their focus in mobile device like as smartphone, tablet.
Yahoo! believe that they will strongly comeback to the competition with their
rivals as soon.

6. Basing on mission statement, vision; we can aware that Yahoo! want to improve itself to adapt
new trend. However, Yahoo! recognize the change of trend
too late, its rivals had gone away before they started to
change. It lead to the decrease of its revenue, reputation, and
many continual replace in top leader. As a result of that things, Yahoo! lost
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its direction in development and compete with its rivals.
Objectives
The objective of Yahoo! maintains development of company like how they can attract the
investment from other companies and what the benefit they will receive from advertiseme nt.
By this way, they focus on the demand of customers to create something new to compete with
some famous brands like Microsoft, Google…moreover, they want to expand more markets in
the world so they use the advertisement like the secret weapon to help them get closer with the
international customers easier. Hence, they promote technological development like make the
connection from internet easier, people can contact in many ways. Last but not least, the
objective of Yahoo! is that they want to become the best choice for the customers when using
the internet like searching the information, chatting, and sharing something to their familiars.
Strategies
As we mentioned above, Yahoo! built its business around its customers. Yahoo! put customer
in the center of products, services producing process. In addition, Yahoo! used efficiently its
resources to create the familiar to user daily needs by allow user customize Yahoo!’s products

7. and services without any problem occur. Moreover, they focused on management and talent to
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attract new employees, reinforce its employee in order to expand its business scale.
With these strategy, Yahoo! offered its employee a long commitment to company, it created a
stability for the development of Yahoo! Furthermore, customers certainly get benefit by
received good products, and services.
Services and Products
To begin with, Flickr is the internet sites, where you can post pictures and your family, friends
as the public setting that they can see and you also can set your Flickr as the
private. According to Matt McGee (2012), there were around
three millions photo upload per day in March 2012 and the
numbers still increase in next months. Although the profits
that Flickr brings to Yahoo! is not high, Flickr still develops because it is
appear on Android app upgrade (McGee, M 2012).Next, Yahoo! answer is
extremely popular as Flickr, where people ask questions and get the
answers from many people. Yahoo! Answer could be seen as the online
librarian, where audiences can get any information at many fields. As detail,
people post their own question at any fields and the viewers will give them a lot
of useful informat ion in short time. Despite of the population of
Yahoo! Answer, it do not make money for Yahoo! and it also
less than Flickr. Because of many reasons such as Yah oo!
Answer do not provide the academic source that can help people get the
reliable information, Yahoo! Answer cannot brin g the benefits to Yahoo!. There are a lot of
candidates which created by Yahoo! namely Yahoo! Directory, Yahoo! Babel Fish and Yahoo!

8. Groups. Yahoo! Directory is the first offering of Yahoo! and it is a suggestion websites which
shows many fields such as health, education, or science and in each fields, there is a lot of detail
information related to it. The next candidates is the Yahoo!
Babel Fish, which has the uses like Google Translate,
but it do not have enough users engagement to
justify its existence. Lastly, the Yahoo! Group was the
same as Flickr and Yahoo! Answer (McGee, M
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2012), which have a huge number of users.
However, because Yahoo! Group did not make
money for Yahoo! so the company cannot keep Yahoo!
alive. On the other hand, in 2008
Yahoo! 3600 which means Yahoo! Blog that is very
popular in Asia like Facebook in recent day, the customers can share
their status, photos or somewhere on blog. In addition, many
famous people use the Blog to write their story or something new
about themselves on this, some events was organized to help the blogger can show their
creation about short sotries…

9. Organizational structure
Marissa Mayer David Filo Ken Goldman
Jacqueline D. Reses Kathy Savitt Adam Cahan
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Chief Executive Officer,
President& Director
Chief Financial Officer
Chief Development
Officer
Chief Marketing Officer Senior Vice President,
Mobile & Emerging Products
Co-founder &
Chief Yahoo

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Financial Analysis
6.32
Yahoo's Financial Condition
3.67
1.23
4.35
4.98
3.45
1.05
3.45
REVENUE GROSS INCOME PROFIT TOTAL CURRENT ASSETS
2010 2011
3
2.5
2
1.5
1
0.5
0
Unit: Billion
Yahoo's Financial Ratio
2010 2011
Current ratio Cash ratio Total debt ratio Profit margin Return of Assets Return of Equity
Unit: Billion

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Competition and Market condition
In 2002, Yahoo! faced to a few competitions since Terry Semel decided to make acquisit ions
that would help his site to offer more premium services that people were willing to pay for it.
The market changed with the acquisitions of Music match Inc., Flickr, and Del.icio.us that
create a theme park which customers pay a small fee to logged in Yahoo!’s site and used it
services. However, bogged down focusing on search engine, Yahoo! had been using Google to
provide these services, which mean that Yahoo! replied on Google’s services. Recognized this,
Yahoo! decided it should further develop its own search engine. In 2008, under operated by
Jerry Yang, Yahoo! faced to the biggest challenge on market. It was the offer of Microsoft to
buy Yahoo! for $33/ share (or approximately $47.5 billion), but Jang refuse to sell the company
for less than $37/ share, although the price of these shares at the time were only about $20/
share. This lead to the disappointed of shareholders because they lost about $20 million for that
rejection. After that time, Yahoo! tried to refocus on news, sports, and finance where the firm
had considerable strengths. Then, Yahoo! hand over its search engine operations to Microsoft
with a 10 years agreement that gave Microsoft access to search technologies. In return, Yahoo!
would receive 88% of search – related advertising revenue for the first 5 years. In 2012, Yahoo!
revamped its Web page, replaced low quality ads and irrelevant content with a Twitter – like
news feed and a stream of content recommended by user’s Facebook friends. Yahoo! also
revamped Yahoo!’s mail and Messenger services and redesigned other services like Flickr.
Moreover, Yahoo! determined to become a stronger firm on smartphone and tablets, this is the
result of the market trend that people transit form desktop to mobile devices. In 2013, Yahoo!
launched a series of acquisition for mobile phone apps such as Stamped, Alike, Jybe and
Summly.

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S.W.O.T
Strengths:
 One of the biggest internet brand in the
world.
 One of popular programs are used the
most in worldwide.
 Help the customer can easy to use the
internet in the daily life.
 Has offices in over 25 countries in the
world.
Weaknesses:
 Failed business deal with Microsoft.
 Orientation of each CEO wasn’t
consistent.
 Some technologies influenced by
competitor such as Google.
Opportunities:
 Potential revenue from developing mobile
apps.
 Interaction trend become more popular.
Threats:
 Competition.
 Face to license problems from its services.
 Difference in culture.

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 Focus on diversification of related
business segments in Internet.
 Operate in one specific market.
Strengths
 According to the information of Yahoo! On the Internet, we have some strengths of
Yahoo!’s company. First, Yahoo! was one of the biggest internet brand in the world
and which was one of popular programs are used the most in worldwide, by this way
Yahoo! became a good market for the advertisement and investors if they want to show
and accost their products to the customers because when the customers use the internet
to do something like check news, studying, research something on Yahoo!, which mean
Yahoo! could help them to show their products on this.
 Second, Yahoo! just not only about Yahoo! Messenger, Yahoo! Search or Yahoo! News
but also about something new to help the customer can easy to use the internet in the
daily life such as Yahoo! Group, Yahoo! Aswer or some products to help customers
like Yahoo! Map, Yahoo! Local. Moreover, for the social network they created the
Yahoo! 3600 (blog) like the Facebook in today for the users can do everything on this
like chatting, share photos, status…
 On the other hand, Yahoo! have offices in over 25 countries in the world [1] so the reason
why Yahoo! have many offices in worldwide maybe they want to connect and show
their professional in the business to customers and other company, which mean they
will get the interaction and if they have some omission, the customers will help them
to know and fix it.
1 Yahoo! Company Information. Retrieved August 25, 2014, from https://info.yahoo.com/company

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Weaknesses
 To begin with, one of the important thing which make the Yahoo! had big trouble. In
2008, that is the opportunity from Microsoft about cooperate in business to the Yahoo!
but the CEO didn’t accept the offer. In addition, in 2009 the overall revenue of Yahoo!
decrease over 2% and the business of advertisement which decrease because some of
investors want to open the market so they join in with other brand. In 2000, the stock
increase over $100 [2] but in 2014, the stock of Yahoo! decrease the lowest number is
$37 [3]. Last but not least, the competition from insiders which influence about the
success of company and the changing of CEO that can’t get the solutions for Yahoo!
and that make more mistake in strategy of Yahoo! in the future.
Opportunities
 Focusing on mobile device is the huge opportunities for Yahoo! returning. The
development of mobile technologies creates a new trend of interaction of people. The
amount of people using mobile device significa ntl y
increases around the world that offers a large number of
potential customers for Yahoo! getting market share in
this areas can improve profit from advertising for Yahoo!
 Yahoo! had purchased Flickr. Hence, Yahoo! has huge potential in combining its
services with social media platforms. It can focus on diversification of related business
segments in Internet space. Yahoo! is an experiential force in Internet services, it has
2 Yahoo! Historical Prices. Retrieved August 25, 2014, from
http://finance.yahoo.com/q/hp?s=YHOO&a=03&b=12&c=2000&d=07&e=27&f=2001&g=m
3 Edwards, J. (2014, April 15). Yahoo Soars On Earnings Even Though Its Underlying Business Is Still
Stagnant. Retrieved August 25, 2014, from http://www.businessinsider.com/yahoo-q1-earnings-2014-4

15. enough abilities, talent employee to get advantages from its competitors in order to
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accomplish success in this market.
Threats
 The biggest threat for all web-based organization is competition. Huge profits attract
investors, innovators and entrepreneurs. The old opponents like Google, Facebook is
always a primary threat for Yahoo! Social network of Facebook and Gmail, search
engine of Google have a large market share at the
moment probably cause difficulties for Yahoo!’s
expanding plan. New services come from opponents
can attract attention from customer while Yahoo!
changes its mind will likely backward Yahoo!
 Yahoo! could face to license problems from its services like videos, pictures, etc. that
is the problem in which many internet service companies have to suffer today.
 Moreover, difference in culture is always another issue for multinational companies
like Yahoo! it may be make mistakes when it operate in a specific market in a country
that can lead to huge damage for Yahoo!

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The Competitive Profile Matrix
Yahoo! Google Facebook
Factor Weight Rating
Weighted
score
Rating
Weighted
score
Rating
Weighted
score
1.
Market
capital/
share
0.26 3 0.78 3 0.78 2 0.52
2.
Annual
growth
0.05 3 0.15 4 0.2 3 0.15
3.
Brand
reputation
0.2 3 0.6 4 0.8 3 0.6
4. Revenue 0.05 2 0.1 3 0.15 3 0.15
5.
Range of
product/
service
0.03 3 0.09 3 0.09 2 0.06
6.
Customer
loyalty
0.03 2 0.06 2 0.06 3 0.09
7.
R&D
spending
0.02 2 0.04 3 0.06 3 0.06
8.
Innovation
in products
and
services
0.06 1 0.06 3 0.18 3 0.18
9.
Variety of
products
0.1 2 0.2 2 0.2 2 0.2
10.
Customer
satisfaction
0.2 2 0.4 3 0.6 3 0.6
Total 1 - 2.48 - 3.12 - 2.61
Based on the CPM, it is clearly that Google was in the first position most preferred internet
services with rating 3.12, Facebook was in the second position with rating 2.61, Yahoo! was in
the last position with rating 2.48. Owned about equal of market share with Google, Yahoo!
took advantage before Google and Facebook, however, it was seem that Yahoo! didn’t know
how to use its resources and existing advantages to overwhelming both competitors. Yahoo!’s

17. strategies was effective but still not enough to equal with its resources and market share, the
rating of Annual growth, Brand reputation and Revenue of Yahoo! was just less than or equal
with Google’s and Facebook’s. This mean, although Yahoo! had strengths but its operations
and managements weren’t in the right direction. In the other hand, Google and Facebook was
smart in using its abilities to overcome disadvantage of market share to prove that they was
better than Yahoo! The rating of Range of product/service, Customer loyalty, R&D spending
of these three companies are relative the same, which mean they all had good moves in
investing and controlling their products and services. The rating Customer royalty of Yahoo!
was less than other two 2 companies because it had a bad customer services and that why many
its customers turnover with it, R&D spending was in the same rating because Yahoo! has been
develop some products with support from Google such as search engine, therefore Yahoo!
didn’t spend much to develop its own search engine. In the three last rating: Innovation in
products and services, Variety of products, and Customer satisfaction, Yahoo! was seem to be
weaker than the two others. Some products and services of Yahoo!’s is depend on Google’s
support so it had small rate in Innovation in products and services. Through changes of leaders
of Yahoo!, they didn’t have similarity in development direction so Yahoo! couldn’t create more
products or services. Low rate in Customer satisfaction in the result from bad customers
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services, and caused a lot of customers didn’t satisfied with Yahoo!

18. Weighed
score
1. Interaction trend become more popular 0.04 2 0.08
2.
0.06 2 0.12
0.06 4 0.24
0.45 3 1.35
5. Strong brand recognition 0.05 3 0.15
6. International markets 0.03 2 0.06
7. Business relationship 0.04 2 0.08
 Threats
0.03 3 0.09
0.04 3 0.12
3. License problem 0.03 1 0.03
4.
0.02 2 0.04
5. Culture differentiation: India, China 0.02 1 0.02
6. Google had higher search engine technologies 0.07 2 0.14
0.03 2 0.06
0.03 2 0.06
Total 1 2.64
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The EFE Matrix
 Opportunities
Factors Weights Rating
Advertisements revenue on Internet increase
strong
3.
Customers spend more online time on Internet
due to convenience
4.
The second leading global Internet brand and one
of the most trafficked Internet destination
worldwide
1.
Huge potential profit attract competitors:
Microsoft, Google…
2.
The expanding of social network prevent Yahoo!
scale: Facebook, Instagram…
Operate in one specific market could be problem
for multinational company like Yahoo!
7.
Yahoo! operate many products and services on
Internet lead to high financial costs and affected
to revenue
8.
Technologies of services provided lack of
consistency
The EFE Matrix has 7 opportunities that bring the benefits for Yahoo. Firstly, the interaction
trend became more popular and the rating for this opportunities is 2. Although the interaction
trend of Yahoo is became popular, it still be limited because the trend did not be advertised
widely. Secondly, the number of Internet users approximately increased, which helps the

19. advertisement get opportunity from the Internet and the Internet also get benefits from
advertisements. Thirdly, this opportunity has the highest rating because Yahoo gets benefits
from Internet users. The time customers spends on Internet increases that leads to the high
opportunity for Yahoo. Next, Yahoo had the benefit that it is the second leading global Internet
brand and one of the most trafficked Internet destination worldwide, and the rating for this
opportunity is 3. Yahoo was one of the strongest global social network and being recognized
the strong brand that helps Yahoo bring many benefits from that. Lastly, Yahoo builds
relationship with other businesses and get into the international markets, which helps Yahoo
maintained the strong brand recognition, as a consequence and the, According to the threats
from the EFF matrix of yahoo, the highest number of rating in matrix is 3, we have two factors
about this. First, the competitors of yahoo such as Microsoft, Google…which make the market
of yahoo on the international market which is more difficult because the customers will have
choice before they want to use an app like Yahoo! messengers or Google to do their job so
which mean the Yahoo must work hard more and more the get the best choice of customers.
On the other hand, the development of social network is more growing in the internationa l
market like Facebook or Instagram…that not well for the Yahoo! 3600 because the Yahoo!
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3600 doesn’t have enough features to competitive with others.

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The IFE Matrix
 Strengths
Factors Weights Rating
Weighted
score
1. One of the biggest Internet brand 0.1 3 0.3
2. Has services user use most 0.06 3 0.18
3. Good market for ads investments 0.04 3 0.12
4. Various of Yahoo! services 0.03 2 0.06
5. Provide services for 25 countries 0.04 3 0.12
6. One of the most trafficked internet destination worldwide 0.03 3 0.09
7.
First appeared in the customers’ mind when they need to
search/ research
0.04 4 0.16
 Weaknesses
1
Refuse the offer of Microsoft which lead to conflicts
between leaders and stakeholders
0.39 3 1.17
2. Overall revenue decrease 2% in 2009 0.03 2 0.06
3.
Price stock decrease from over $100 (2000) to $37
(2014)
0.04 3 0.12
4.
Strategic managements of each CEO didn’t
interactive
0.1 2 0.2
5. Search engine depend on Google to develop 0.1 2 0.2
Total 1 - 2.78
Yahoo has succeed because of these 7 factors. The first factor is that Yahoo is one of biggest
Internet brand, which decides the successful of Yahoo. Next, Yahoo has created a lot of
services, which are very useful and very convenient so that they attracts a huge number of
Internet users with the rating is 3. Because Yahoo has a lot of loyal customers so that it also
attracts the advertising investments and it leads to the advantages to help Yahoo become more
successful. Furthermore, Yahoo already created various useful services and they can apply in

21. 25 countries. Thus, Yahoo can reach into the international market, which is the tool that helps
Yahoo brings a lot of benefits and be more popular. Last but not least, Yahoo is one of the most
trafficked internet destination worldwide and the rating for this is 3. Lastly, because of various
useful services and many people use it so that Yahoo is the first appeared in the customers’
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mind when they need to search and the rating for this factor is 4.
Although there are a lot of strengths, Yahoo has various weakness because there are some
company such as Google appear in international market and become Yahoo’s competitor.
Because of the successful of Google and other competitors, the Yahoo’s price stock decrease
from above $100 (2000) to $37 (2014). Consequently, the revenue of Yahoo fall down 2% in
2009. In addition, other reason that make Yahoo weaker is that the strategic managements of
each CEO didn’t interactive, and the rate of this weakness is 2.

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Life cycle
Life cycle of Yahoo! now is at the decline stage due to internal and external problems. With
such a potential profits from marketing, sale, and media services on the Internet, Yahoo! faced
to big competitors such as Google, Facebook and the appearance of these competitors is right
when Yahoo! profits fall down for years. The proof are in 2006, vice president of Yahoo!
started in the memo: “We lack of a focused, cohesive vision for our company.” Yahoo!’s
employees confused about the role of content in company’s strategy. In the early 2008, the
rejection of Microsoft’s offer cause conflicts between company’s leaders and stakeholders and
net income in 2008 was $ 424,298 million [4], which is 77% less than in 2006. Also, Yahoo!
lost 1% in rich media revenue, 1% in sponsorship in 2008. In the second quarter of 2009, the
firm’s overall revenue fell by 13%. After Marissa Mayer’s appointment, she applied harvesting
strategy to reduce the company’s cost, and she used consolidation strategy to recover its market
power. Yahoo sustains its services such as Yahoo mail, Flickr, a photo sharing application.
Moreover, Yahoo acquired a mobile application company to increase talent resource. On the
other hand, Yahoo maintains its organizational structure, Marissa Mayer focus on improving
employees’ motivation, created a good atmosphere in workplace; furthermore, flexible work
style also was encouraged, its employees could worked at home or any place they want. In my
opinion, Yahoo should try differentiation strategy to make its products and services more
unique in order to attract customers, and acquire market share, get and competitive advantage
as well.
4 Yahoo! Net Income 2008. (n.d.). Retrieved August 25, 2014, from
http://www.wikinvest.com/stock/Yahoo!_(YHOO)/Data/Net_Income/2008

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SPACE Matrix
Internal dimension:
Financial strength:
 Working capital 4
 Cash flow 3
 Earnings per share 2
 Current ratio 4
 Return on assets 2
 Profit margin 2
Competitive advantage:
 Product quality -1
 Customer loyalty -2
 Product life cycle -4
 Customer service -3
 Market share -3
External dimension:
Industry strength:
 Growth potential 3
 Profit potential 3
 Ease to entry into market 4

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 Financial stability 4
 Resource availability 4
Environmental stability:
 Technological strength -5
 Competitive pressure -3
 Demand variability -5
 Competitor’s price range -3
 Barrier to entry -2
 Ease to exit -1
Internal dimension:
Financial strength:
 Working capital 4
 Cash flow 3
 Earnings per share 2
 Current ratio 4
 Return on assets 2
 Profit margin 2
Competitive advantage:
 Product quality -2

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 Customer loyalty -4
 Product life cycle -4
 Customer service -3
 Market share -3
External dimension:
Industry strength:
 Growth potential 3
 Profit potential 3
 Ease to entry into market 4
 Financial stability 4
 Resource availability 4
Environmental stability:
 Technological strength -5
 Competitive pressure -3
 Demand variability -5
 Competitor’s price range -3
 Barrier to entry -2
 Ease to exit -1
Financial strength: 2.83
Competitive advantage: -3.2
Industry strength: 3.6
Environmental stability: -3.17

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x – Axis (-3.2 + 3.6) = 0.4
y – Axis (-3.17 + 2.83) = -0.33
Internal Strategic Position Internal Strategic Position
Competitive (CA) Industry (IS)
(-6 worst, -1 best) (+1 worst, +6 best)
-2
Product quality
3
Growth potential
-4
Customer loyalty
3
Profit potential
-4
Product life cycle
4
Ease to entry into market
-3
Customer service
4
Financial stability
-3
Market share
4
Resource availability
Average -3.2 Average +3.6
Total axis X score +0.4
Financial (FS) Environmental (ES)
(+1 worst, +6 best)
(-6 worst, -1 best)
4
Working capital
-5
Technological strength
3
Cash flow
-3
Competitive pressure
2
Earnings per share
-5
Demand variability
4
Current ratio
-3
Competitor’s price range
2
Return on assets
-2
Barrier to entry
2
Profit margin
-1
Ease to exit
Average +2.83 Average -3.17
Total axis Y score -0.33

27. Conservative Aggressive
 (0.4; -0.33)
Defensive Competitive
Industry
Strength
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Competitive
Advantage
Internal dimension
Financial Strength
0 
0.2 0.3 0.4
-0.2
-0.3
-0.4
Environmental Stability
Financial strength is consist of everything that refers to the financials of the company. Working
capital and Current ratio of Yahoo! is about 4 points because of its huge capital and strong
ability to pay short-term obligations, Yahoo! is a big company which a stable financia l

28. situation. Cash flow has 3 point for Yahoo!’s revenue or expense stream changes cash account
over a given period is considered acceptable. Earnings per share, Return on assets, and Profit
margin were nearly bad because it is seem that Yahoo!’s operation situation and profit making
ability of it are faced with problems. Although, Yahoo! had strong financial situation, however,
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this capital wasn’t use wisely to earn profit.
Competitive advantage are strength of Yahoo! to over its competitors. Product quality of
Yahoo! was nearly the best for rating. However, Customer loyalty and Product life was bad
because Yahoo! didn’t pay attention on customer services and also improve its products;
Yahoo! had a big step backward in these two things. Yahoo! might forget that creating product/
service and attracting customers are important, but more important is how to keep customers
and maintain those product/service always satisfied them is a different thing. Yahoo! accounted
for approximately equal of market share with Google, this make Yahoo! easily be passive with
fierce competition from Google.
External dimension
In the era of information technology, there are many potential profit and growth on the Internet,
and Yahoo! was taking that opportunities. Entry to this market is relative easy for Yahoo!,
unfortunately, this also apply for other companies but Yahoo! has advantage because it is one
of the earliest companies enter this market. Although Yahoo! doesn’t have much market share,
however in the other hand, Yahoo!’s financial situation was sustainable. Moreover, despite
some of Yahoo!’s technologies were still depend on Google, Yahoo!’s resources availabilit y
allow it to access to any kind of network market and operate for profitable goals.
Yahoo! had resources for this virtual market, but the problem was Yahoo! just had quantity but
not quality, this reflected in poor Technological strength and demand variability. For this

29. problem, Yahoo! had no choice but to be influenced by some Google’s support, led to Yahoo!
lost the initiative on the market and strategies of the company is affected by technology of
Google. Technology put a lot of pressure on Yahoo! because if Yahoo! want to perform R&D
investment, operations, and marketing and sale stage, Yahoo! must already had suitable
technologies that could match with company’s development direction. Price competition was
also a result from poor technology, because Yahoo! had to buy/ rent technology from Google
and pay them a fee, production cost of it would rise. While the fixed cost and price for
customers to use Yahoo’s product/ service were high, Google’s were low because they use
their own technologies so that they can they can reduced the costs mentioned above. This make
Competitor’s price range of Yahoo! even farther. Barrier to entry and exit of this market was
easy, so other companies can join this market for huge potential profits, however, as the
example of Yahoo, if they already have everything required so their operations will be
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smoothly, otherwise, they will encounter the same difficulties of Yahoo!
With all the factors above, Yahoo! was facing a competitive market with total axis X score
+0.4, and total axis Y score -0.33. This isn’t surprising because we already analyzed everything
about Yahoo! and other external factors. Face with big potential competitors, Yahoo! must has
right strategies and stable in its direction in order to overcome rivalry and take as much market
share as it can.

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Grand Matrix
Yahoo! since the first time it appear are services on the Internet. Throughout a long time grow
and mature, Yahoo! uses the advantages of Internet in order to maximize profits and develop
its services more to satisfy its customers. Until now, Yahoo!’s strategies have proved that
Internet is truly a virtual market with a growth rate increase year by year, unfortunately, Yahoo!
is not the only company note about that, many competitors attracted by that huge potential
profit try to capture market share by fields that similar and different with Yahoo!’s. Since that,
Yahoo! is now facing with a strong competitive market on rapid growth virtual market, Yahoo!
need a new strategies which can help it not only maintain its position but outstanding from
others companies.
Market development
Yahoo! should enter new segments of market in order to create new groups of customer using
Yahoo!’s products and services. For example, Yahoo! should use Flickr as a photo site not only
for their personal, family, friend’s photo, and landscape images but also for people who have
similarly favorite. Yahoo! should create clubs in Flickr that for people want to share photos of
their pets, landscapes, arts, historic arts, houses, cars, hand drawings, so that people who share
the same fields can join in and discuss, comment, improve and develop their skills, knowledge,
awareness. Moreover, Yahoo! can add some functions for the website like: suggest, high
appreciate, top photo, top meaning, invite people, benefit for positive member who discuss,
comment, most or high value comment.
Second, we suggest that Yahoo! should create campaign to attract customers to use its products
and services. Yahoo! should apply plans that promote both its existed and new products and
services. For instance, Yahoo! will establish trial campaign for both its customers and potential

31. customers. The campaign will include programs that if customers try and use its new services,
they will receive attractive gifts and gain benefits for services that they had and using. And so
on, if they join trial for existing products or services they can get benefits for new services that
Yahoo! is promoting. Furthermore, customers are able to participate in both campaigns parallel
and they can obviously gain benefits for existing and new products and services. This strategy
is aim to attract as many as possible customers to try and use Yahoo!’s services, and in order
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to use word of mouth marketing plan to expand the scale in market of Yahoo!
Finally, today the market of social network market is very competitive between some hill
brands in the world like Yahoo, Facebook, Google, etc. we need some strategy like extra
components to attract the amount of users to increase usage of users. We success some plans:
Add the message apps on Flickr like customers can chat or send pictures on this. For example,
if we use the flicker without the message apps, we just share the photo or post your status on
this but if we create the message app on Flickr, the users will spend more time to chat with
friends or send photo easier.
In the Yahoo Mail, we can use the voice mail to chat or send a file on this which can help the
users can simplify to send a mail easier than write a mail. In addition, follow the common
manner if we want to send mails to others. We must write it by word office or type. Now, by
using the voice mail we just record the voice and send others, which will save your time and
your conducts.
Market penetration
Yahoo! should open plan that in a period of time, it will promote new products/ services with
many aspects. In order to increase market share, Yahoo! can invest resources to improve and
develop functions that superior than competitor’s i.e. increase the capacity of voice mail higher

32. than text mail. Advertisements are essential, by put ads on banners, other websites, set up
contests and/ or mini games for customers who will get a lot of gifts and benefits when they
join. Decrease of cost to gain extra benefit when they pay to become senior member. Creating
sale off programs which in that times, customers can buy promotional packs to become senior
member or VIP member, that can gain more benefits than before with a longer time effect. For
example, if a new customer first use Yahoo!’s services so they are new member, then they buy
packs of benefit to become junior member but because they buy in sale off programs so they
become senior member which high than junior member, and this is also similar to silver, gold,
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premium and VIP members.
Product development
Today, the market of social network market is very competitive between some hill brands in
the world like Yahoo, Facebook, Google, etc. we need some strategy like create something to
competitive with other in business. In 2014, we will show a main product which is a social
network. In addition, that product is not like Facebook, Yahoo! 360 or Badoo. Hence, we create
this social network that not only help the customers can share photo, status or chat on this,
advertisement but also that can help the users can do everything on this about business, news
or stock market. Which name of this product is Yahoo Pro which mean that can be a great
resources. For example, the users can have many choices when they access on yahoo pro like
check news, update friend’s status, or they can research about the stock market.

33. Quantitative Strategic Planning Matrix
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Problem: Decrease in revenue, change in leadership cause lost direction.
Market
Development
Market
penetration
Products
Development
Internal Factors Weights AS TAS AS TAS AS TAS
 Strengths
1.
One of the biggest
Internet brands
0.1 4 0.4 4 0.4 3 0.3
2.
Has services user use
most
0.06 2 0.12 1 0.06 2 0.12
3.
Good market for ads
investments
0.04 3 0.12 2 0.08 2 0.08
4.
Various of Yahoo!
services
0.03 2 0.06 2 0.06 1 0.03
5.
Provide services for
25 countries
0.04 3 0.12 4 0.16 2 0.08
6.
One of the most
trafficked internet
destination worldwide
0.03 3 0.09 4 0.12 2 0.06
7.
First appeared in the
customers’ mind when
they need to search/
research
0.04 4 0.16 2 0.08 1 0.04
 Weaknesses
1.
Refuse the offer of
Microsoft which
lead to conflicts
between leaders and
stakeholders
0.39 - - - - - -
2.
Overall revenue
decrease 2% in 2009
0.03 2 0.06 2 0.06 2 0.09
3.
Price stock decrease
from over $100
(2000) to $37 (2014)
0.04 3 0.12 3 0.12 2 0.08
4.
Strategic
managements of
each CEO weren’t
interactive
0.1 - - - - - -
5.
Search engine
depend on Google to
develop
0.1 1 0.1 1 0.1 4 0.4
Total 1

34. 31 | P a g e
External Factors Weights
 Opportunities
1.
Interaction trend
become more
popular
0.04 4 0.16 4 0.16 2 0.08
2.
Advertisements
revenue on Internet
increase strong
0.06 2 0.12 2 0.12 1 0.06
3.
Customers spend
more online time on
Internet due to
convenience
0.06 3 0.18 3 0.18 1 0.06
4.
The second leading
global Internet brand
and one of the most
trafficked Internet
destination
worldwide
0.45 4 1.8 4 1.8 2 0.9
5.
Strong brand
recognition
0.05 3 0.15 4 0.2 2 0.1
6. International markets 0.03 2 0.06 3 0.09 1 0.03
7. Business relationship 0.04 1 0.04 2 0.08 1 0.04
 Threats
1.
Huge potential profit
attract competitors:
Microsoft, Google…
0.03 2 0.06 2 0.06 3 0.09
2.
The expanding of
social network
prevent Yahoo!
scale: Facebook,
Instagram, etc.
0.04 3 0.12 2 0.08 2 0.08
3. License problem 0.03 1 0.03 2 0.06 3 0.09
4.
Operate in one
specific market
could be problem for
multinational
company like
Yahoo!
0.02 2 0.04 4 0.08 3 0.06
5.
Culture
differentiation:
India, China
0.02 - - - - - -
6.
Google had higher
search engine
technologies
0.07 2 0.14 3 0.21 3 0.21
7.
Yahoo! operate
many products and
0.03 2 0.06 1 0.03 4 0.12

35. 32 | P a g e
services on Internet
lead to high financial
costs and affected to
revenue
8.
Technologies of
services provided
lack of consistency
0.03 2 0.06 2 0.06 3 0.09
Total 1
Total sum of attractiveness Score 4.37 4.45 3.29
Recommendation strategies
Long term Objectives
Our objective is put Yahoo comeback to a company that acquire the largest market share in
internet service area and become the biggest rival of Google, Facebook, etc.
Recommended Strategy
In order to achieve the long term goal we suggest Yahoo conduct the market penetration
strategy, including improving current service, changing policy, developing new product or
adding more new function into existed service, launch new stronger marketing campaigns.

36. 33 | P a g e
Improving current service
One of the main reasons that causes Yahoo lost their market share in internet service is bad
service. Hence, we need to improve Yahoo service at first. Firstly, we have to increase the
number of servers to refine service speed. We need to
pay more attention in customer’s feedbacks
and response them as soon as possible. In detail, we
upgrade the Yahoo search engine more powerful,
link to more organizations, other websites,
and improve more filter function. Furthermore, user interface is also a problem of Yahoo,
we need make it friendlier, simpler and more impressive for customer, in order to do that
we must improve graphic user interface. An excellence interface can attract more attention
from customers and keep them spend long time for Yahoo service websites.
Changing policy of service
At the moment, Google is changing their policy about customer private information, they
control the content of what their user do in their services, which can lead to a negative
effect for Google. Yahoo should recognize this situation like an
opportunity to get the customer back to Yahoo services. Yahoo
should interact more to its customer and push
marketing campaigns stronger parallel with improve
current service. Yahoo should give customer freedom in
their action when they use Yahoo services, it make customer more comfortable with Yahoo.

37. 34 | P a g e
Developing new product
Social network is the most using service in around the world, Yahoo have to build their
own social network. However, they cannot do the same way with Facebook, they should
have a different one. Yahoo should focus on build its network through
application form rather than
use webpage like a main way to
access to social network because
using web browser is slower speed than application
software, and it depend on the supporting of each browser brand. On the other hand, mobile
device is always a good market for Yahoo, so Yahoo concentrates on developing the mobile
form for every services or products that they have. Moreover, Yahoo need to develop some
exclusive products to highlight its brand like game for computer and mobile. A corporation
between social network, chatting messenger, news, other services of Yahoo with impleme nt
products of other brand will create a completely package to compete with Yahoo’s main
opponents in internet service industry.
Pushing marketing campaign
Yahoo have to launch new marketing to remind its brand to customer and address what
new things which Yahoo offers to customers. For
example, it can put Yahoo’s banner in cooperation
websites, organizing community events or supporting to
society activities. Moreover, Yahoo should have an impressive
advertisement that focus on freedom in private
information, Yahoo must expand its customer

38. segments consisting every ages, social classes, Yahoo services and products are for both
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business and entertainment.
Key factors
Improving current
service
Changing policy of
service
Developing new
product
Weight AS TAS Weight AS TAS Weight AS TAS
Strengths
Quality 0.2 3 0.6 0.1 2 0.2 0.3 4 1.2
Resources
0.2 4 0.8 0.1 2 0.2 0.2 4 0.8
availability
Skilled
labor
0.13 4 0.52 0.05 3 0.15 0.1 3 0.3
Learn from
rivals
0.14 4 0.56 0.4 4 1.6 0.05 2 0.1
Weaknesses
Lack of
trust
0.1 2 0.2 0.2 3 0.6 0.1 3 0.3
Poor
technology
0.13 3 0.39 0.05 2 0.1 0.15 2 0.3
Time-consuming
0.1 3 0.3 0.1 1 0.2 0.1 3 0.3
1 1 1
Opportunities
Re-aim
goals
0.15 1 0.15 0.2 1 0.2 0.1 2 0.2
Customer
loyalty
0.3 4 1.2 0.3 3 0.9 0.2 2 0.4
Acquisition 0.15 3 0.45 0.2 2 0.4 0.3 3 0.9
Threats
Price
0.15 2 0.3 0.1 1 0.2 0.2 3 0.6
competitive
Step
backward
to restart
0.13 3 0.39 0.1 1 0.2 0.1 1 0.1
New rival’s
entry
0.12 2 0.24 0.1 1 0.2 0.1 1 0.1
1 1 1
Sum TAS 6.1 5.15 5.6

39. 36 | P a g e
Timetable
Actions Time Table
1st quarter 2nd quarter 3rd quarter 4th quarter 1st quarter 2nd quarter 3rd quarter 4th quarter
Improving current service
Increase the number of servers
Pay attention in customer’s feedbacks and response
Upgrade search engine
Re-design user interface
Changing policy of service
Developing new product
Cooperation websites
Post ads on media websites
Organizing community events
Support schoolarship Health protecting
Supporting to society activities Sponsor Sponsor Sponsor Sponsor
Create video ads
Put banner in:
Impressive advertisement
2012 2013
Interact more to its customer
Push marketing campaigns stronger
Build network through application form
Develop services for mobile form
Develop exclusive products
Pushing marketing campaign

40. 37 | P a g e
Financial Prediction
Minimum financial prediction Maximum financial prediction
Years 2012 2013 2012 2013
Revenue 5.0B 5.5B 5.15B 6.2B
Income 3.6B 3.4B 4.2B 2.3B
Profit 3.97B 1.54B 4.3B 3.3B
Profit Margin 0.8B 0.32B 0.82B 0.4B
According to the data of Yahoo! Income statement in 2010 and 2011, we can guest the finance
of Yahoo in 2012 and 2013, the profit will be decrease. In detail, the revenue decrease over $2
billion, the Gross income is over $0.2 billion, the profit is $0.2 billion and the profit margin is
$0.02 billion. That is the reason we suggest Yahoo use the recommendation strategy. However,
the minimum financial prediction which increase the amount not so much because when we
show the new products and new services to customers that do not more much effect to
customers and Yahoo Cannot get more much profit for company. Yahoo is going to rising up
the profit to 2.3%, besides that, the revenue and income of Yahoo also rise up to 21.3%. On
the other hand, after the couple time conducting the recommendation strategy , it will get the

41. income with increase more 2% and that increase the profit and the profit margin will going up
2.3% on this. Firstly, we will develop and invest in new products and new services such as
social network and customers’ services to get attention by customers. The demand of Internet
users is very high; they want the products and services which are creative, useful and
convenient and we know how to satisfy the audiences. In addition, the new products will be
developed by our engineering department and products will become new social networks of
Yahoo and we are confident that new product of Yahoo will become the competitor of
Facebook and Instagram. Moreover, the special and useful of new social network of Yahoo
will be different with Yahoo and Facebook, which will help Yahoo increase the number of
users and be more successful. Secondly, we also focus on developing Yahoo services, such as
customers’ services. This service will receive all customers’ feedbacks and we have the
professional team to answers all of customers questions. After that, through all of customers’
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feedbacks, we will keep developing and completing Yahoo product.

42. 39 | P a g e
Conclusion
Yahoo have potential to growth if they use the new implementing strategies as mention
previously although they are in the competitive industry. Moreover based on the case study
given, they are the second most preferred Internet search engine after Google and in America,
they are the most popular Internet site. Yahoo was having financial difficulties during 2008 to
2011 was due to slow global economic growth. Moreover in 2008, Yahoo recorded lowest net
income ever since 2006, because they right of Goodwill impairment charges $ 487 million
despite slow economy growth. Otherwise, they would have recorded a better net income
compared the past two years. Market penetration, product development and market
development become three main elements which Yahoo! need to focus to further attract more
customers, generate more profits and expand the business. Overall, Yahoo! is in a strategic
position to maintain its market share and position in the U.S and International markets. Further
innovations are to further sustain in the market as one of the major player in the industry.