1
Case Study #23:
Is Yahoo!’s Business Model
Working in 2011 and Today?
BUS 189 - Prof. Larry Gee
Team # 5 - The A+ Students
Aimee Gohil - # 7260
Sean Luis - # 0283
PM - Karin Proven - # 7884
Krysta Sumabat - # 2199
Friday, December 4 2015
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Table of Contents
Appendix 1: History, Development, and Growth
……….………………………………………. 3
Appendix 2: Internal Strengths and Weakness
….………………………………………………. 8
Appendix 3: Nature of External Environment
…..……………………………………………... 11
Appendix 4: SWOT
Analysis…………….………….……………………………………
……. 12
Appendix 5: Corporate-Level Strategy
...………………………………………………………. 18
Appendix 6: Business- Level Strategy
…………………………………………………………. 20
Appendix 7: Company Structure and Control
Systems………...………………………………. 22
Appendix 8:
Recommendations...…………………………………………………
……………. 24
Case Question 1
……….………………………………………………………….…….
……… 25
Case Question 2
……….………………………………………………………………..
……… 29
Case Question 3
………………………………………………………………………..
………. 32
Case Question 4
……………………………………………………………………….
….……. 36
Conclusion
…………………………………………………………………………
….….……. 38
Bibliography………………………………….………………….…
…………………….….…. 40
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Appendix 1: The History, Development, and Growth
Yahoo! is a global technology company best known and
recognized for their search
engine, web portals, email services, and similar technologies.
Yahoo! is currently working hard
to stand out from competitors by executing several strategies,
including corporate level strategies
such as acquisitions, horizontal and vertical integration. It is
clear with the struggles Yahoo! has
faced over the past 7 years that they need to regain market
share, expand their demographics,
improve innovation, and build brand loyalty to be profitable.
The company’s past strategy of
acquisitions has been costly and has not produced the desired
result.
Yahoo! was founded by David Filo and Jerry Yang and the
company is based in the heart
of the Silicon Valley in Sunnyvale, California. (McCullough) In
1994, David and Jerry were
graduate students at Stanford University, studying to obtain
their Ph.D. in Electrical
Engineering. The World Wide Web was a tool they used, but
the user experience left them
extremely frustrated. Thousands of pages would appear which
were random and unorganized,
making the tool overly cumbersome and difficult to use
effectively. Realizing there was a better
way to organize the information, the pair found a way to
manage all these websites by specific
content. What David and Jerry provided was a hierarchically
organized index compared to an
index of pages. They named this organized hierarchy “David
and Jerry’s Guide to The World
Wide Web” and published it in 1994.
Initially their site was used mainly by their friends and for their
own personal
use. However, over time, more and more people came across
the time saving website, spreading
the word about “David and Jerry’s Guide to The World Wide
Web.” The attention pushed the
once personal organization space into the realm of a viral
website. As the number of visitors
4
consistently increased, David and Jerry realized they had a
valuable and unique commodity on
their hands. Both graduate students decided to put aside their
studies at Stanford in order to focus
on their search engine and build the business. They renamed
their website and company to
Yahoo! and it was incorporated in 1995. Yahoo! became the
first published web portal.
The team was then joined by the first CEO, Tim Koogle, who
worked vigorously in order
to develop the initial business strategies. After recruiting many
people in the marketing and
software engineering departments, Yahoo! grew a competent
team to accomplish their new
strategies. One of the company’s strategies was to attract and
retain various consumers and to
become more than just a search engine. With this goal in mind,
Yahoo!’s team created the
following portals: personal, government, cultural, corporate,
stock, and internet shopping
portals. Yahoo! benefitted from each of these portals in
different ways. The internet or
e-commerce portal brought in revenue through implementation
of user (seller and buyer)
transaction fees. In 1996, one year after being incorporated, the
company had revenue of $21.5
million. In 1998, after Koogle’s implementation of the new
business strategy and model, the
revenue had grown to $203 million. (Hill and Jones)
Over the years, Yahoo! wanted to become a “mega brand” for
all online users. (Hill and
Jones) Management put a huge focus on adding more content,
which led to adding Rocketmail,
Geocities, Broadcast.com, instant messaging, dating sites, and
more retail sites. Furthermore, an
extremely important factor of the new business strategy was the
use of a customization
feature. When having a customized website, customers’ needs
and wants are specifically
addressed. It’s an understood phenomenon called “switching
costs” that prevents customers
from moving to new providers. When people invest time into
customizing their profile with
Yahoo!, then it is less likely they will go elsewhere for the
same information, unless someone
5
else created a killer application. Attracting people with the
option for customization was
successful. We see this success in the early 2000’s when the
company’s market value was
approximately $220 billion, with about 15 million visitors a
day. (Hill and Jones) In 2015
however, due to no longer being in the dot-com era, increased
competition, and other companies
such as Google and Facebook who were offering killer
applications, Yahoo!’s market value has
decreased to about $33.02 billion. (Yahoo Finance)
Yahoo’s execute team saw several changes since it originated,
including two interim
CEOs Tim Morse (2011-2012) and Ross Levinsohn (2012).
Carol Bartz, Yahoo!’s CEO from
2009-2011, had the arduous task to recover from a steep decline
Yahoo! experienced in 2008.
(See Figure 1). Bartz had
begun to cut costs and
worked to improve margins.
It was stated Bartz changed
the “organizational
structure, replaced executives
and cut 5% of the workforce.” (Oreskovic) By looking at
Yahoo!’s revenue statement, it is
apparent that Bartz’s attempts to turn a profit were unsuccessful
as Yahoo! still saw a steep
decline all the way until 2011.
Scott Thompson took the helm in 2012, after the interim CEO
Tim Morse returned to his
position as the company’s Chief Financial Officer. Thompson
was Yahoo!’s CEO for less than a
year, yet he implemented the filing of 10 patent infringement
lawsuits against Facebook resulting
in a partnership between the pair for new advertising. (Yousouf)
After a resume scandal
involving Thompson, he was fired from Yahoo! only four
months after being hired. (Pepitone) In
Figure 1 Gale Business Insights: Essentials 2015 gale Company
Intelligence Database 2015
www.businessinsider.com
6
2012, Yahoo! brought Marissa Mayer, an ex-Google executive,
to the team to help Yahoo!
define their vision and stay current in the dynamic environment.
Yahoo! showed 700 million
users per month, but the company still struggled with generating
revenue. (Perlroth) Since 2012
Marissa Mayer is the youngest person to ever be a CEO of a
fortune 500 company. (Leahey) The
mission statement used to be “To be the most essential Global
Internet Service for consumers
and businesses.” This has been updated in their 24th revised
mission statement that states
Yahoo! is a guide focused on making users’ digital habits
inspiring and entertaining.” (Le Ray)
Yahoo has made many notorious acquisitions and has received
the reputation that it “kills
startups”. (Pepitone) The World Public Library shows Yahoo!
has acquired nearly 90 different
companies globally since 1997. Per CNN Money, some of the
notable acquisitions include
Broadcast.com which was acquired in April 1999 for $5.7
billion and GeoCities for $3.6 billion.
Both were deemed unsuccessful with a hefty price tag
(Pepitone).
In 2003, under Terry Semel’s leadership, Yahoo! acquired
Overture Services for $1.63
billion. SEC records state Overture Services, Inc. was an online
advertising service that provided
a “Pay-For-Performance” search which is the main area of
Yahoo!’s generated revenue.
Yahoo!’s revenues show that this expensive acquisition was a
success because revenue continued
to climb for four more years (See Figure 1). The spending
continued under Semel. In July of
2004, Yahoo! acquired Oddpost to improve Yahoo!’s expertise
in email services. The cost of the
acquisition was $30 million.
In 2012, under Marissa Mayer’s leadership, Yahoo! acquired
Stamped. The Wall Street
Journal stated Stamped was a mobile application company. This
acquisition was right in line
toward improving Yahoo!’s mobile realm. In 2013, Mayer also
implemented the acquisition of
Tumblr for $1.1 billion which included the acquisition of
Tumblr’s founder, David Karp, as well.
7
This strategic move is seen more to obtain the talents of Karp
over what Tumbler and their users
have to offer. (O’Donnell) Most recently in July 2015, Yahoo!
has acquired Polyvore, a leader in
social shopping. This acquisition is intended to improve
“consumer and advertising offerings”.
(Business Wire)
Looking over Yahoo!’s history, we conclude this is a business
in constant flux. There has
been a revolving door of leadership and ideas that clearly has an
impact on the company’s health,
productivity and profitability. Most acquisitions should have a
positive impact on the bottom line
for a business, but it appears Yahoo! is still unable to
effectively utilize this realm. While Mayer
has made strides in slowing the decline and leveling off
revenues, it’s clear Yahoo! needs to
make headway to compete in the dynamic environment.
8
Appendix 2: Identification of Company’s Internal Strengths and
Weaknesses
Strengths
One of Yahoo!’s key strengths is their competitive advantage
provided by their
increasing user base. Within recent years, Yahoo! has made
numerous acquisitions ranging from
small startups, such as Summly, to popular websites, such as
Polyvore and Tumblr. According to
forbes.com, Tumblr is one of Yahoo!’s best acquisitions to date,
not only for the number of users
but also for its founder, David Karp. (O’Donnell) Through
acquisitions, Yahoo! has been able to
not only increase their user traffic, but also expand their
demographics to bloggers, photo
enthusiasts, the younger generation, and Millennials.
Another strength Yahoo! is focusing its attention on is the
mobile aspect of their
company. They have made great strides in the industry by
establishing a mobile presence
through their inorganic growth strategy. Part of the strategy is
to acquire smaller companies with
engineering talent and mobile computing specialists, such as
Stamped. (Efrati) By doing this,
Yahoo! has been able to broaden and strengthen their expertise
in the mobile segment as the
usage of mobile devices such as smartphones and tablets
continues to increase.
Weaknesses
While several of the acquisitions stated in “Strengths” have
improved Yahoo!’s ability to
compete in the dynamic market, some of the acquisitions have
taken billions from the bottom
line, hurting Yahoo!’s overall performance. Costly acquisitions,
such as Broadcast.com and
GeoCities have been shut down and the funds used have no
return on invested capital. These
9
acquisitions hurt Yahoo!’s overall profit margin. It is clear
Yahoo! is relatively weak compared
to its peers when comparing revenues of rival companies. While
their competitors, such as
Google and Microsoft, have been increasing their revenues at a
quick pace, Yahoo! is unable to
register growth (See Figure 2). The disparity between revenues
highlights Yahoo!’s competitive
disadvantage. This disadvantage has led to sluggish revenues.
Yahoo!’s small footprint in
the social media and social
networking segments is also a
weakness. Although the company
acquired Flickr and Tumblr to
develop a greater presence in the
social networking segment, they lack
significant presence compared to
their peers, Facebook and Google.
Figure 3 shows social login
preferences for Facebook was 45%
and Google was 35% while Yahoo!
trailing far behind with only 7%. This
discrepancy is very detrimental to
Yahoo!’s future success and needs to be corrected to achieve
profit.
Figure 3- Source: Olson, Michael. "Social Login Trends Across
the
Web for Q4 2014." Janrain. 2 Jan 2014. Web. 3 Nov 015
Figure 2- Source: Gale Business Insights: Essentials 2015 Gale
Company Intelligence
Database 2015
10
Yahoo! also needs to have stability in leadership. There have
been seven (7) Chief
Executive Officers leading Yahoo! over the past decade,
including two interim leaders, both in
2012. This constant change and shift leads to instability and a
lack in confidence from
consumers. Having an executive team that can build consumer
confidence will help Yahoo! to
achieve their goals.
11
Appendix 3: The nature of the external environment surrounding
the company
The external environment of Yahoo! is highly competitive with
several opportunities and
threats that exist in this environment that surrounds Yahoo!. An
opportunity that Yahoo! can take
advantage of is making business deals at regular intervals to
improve their business. By doing
this, Yahoo! can designate a revenue sharing agreement that
benefits them both.
A second emerging opportunity for Yahoo! is the strong growth
in display advertising
and mobile ad spending. Advertisers in the United States are
expected to spend on various
display ad formats served to desktops and laptops as well as
mobile phones, tablets, and other
devices. The rising spend will enable Yahoo! to boost their
revenues. As Yahoo! continues to
deliver products that cater to this market, they will be able to
enjoy benefits from the positive
trends in the industry.
For external threats, Yahoo! is competing with social platforms
that are major players in
the industry. Facebook, for example, although is not the fastest
growing social networking site, is
gaining the highest number of visits. It has the potential to
emerge as a medium that is cost
effective for advertisers and has been proven to have the
potential to emerge as an effective tool
to reach audiences. Yahoo! suffers against better-performing
social networking platforms in
terms of user time, engagement, and advertiser interest.
Another threat is the existence of stringent regulations. No
matter the level of business,
governments impose regulations and restrictions on companies
and Yahoo is no exception. When
the government passes new laws or makes changes, normal
business processes can be affected,
which can lead to legal ramifications, including fines and fees.
12
Appendix 4: A SWOT analysis
After evaluating Yahoo!, we identified strengths that give them
a competitive advantage
in their industry. Ever since being appointed CEO of the
company in 2012, Marissa Mayer has
implemented changes that have made a positive impact and has
allowed Yahoo! to gain some
leverage.
Firstly, as previously mentioned, Yahoo! enjoys a
strong customer base as well as a
significant reach. Various acquisitions contributed greatly to
this. For instance, the acquisition of
Flickr in 2005 allowed Yahoo to gain an entire online
community of photo researchers and
enthusiasts all around the world. Another example is the
acquisition of the blogging site, Tumblr,
which was made in 2013. Prior to this acquisition, Yahoo! had a
total amount of 800 million
monthly active users. Tumblr, which continues to grow faster
than any other social network,
increased Yahoo!’s monthly active user base to over 1 billion.
(Garner)
Also contributing to Yahoo!’s increased user base was the
company’s launch of the
refreshed Yahoo! Mail application for mobile phones and
tablets. Since the launch, the
application alone increased Yahoo! Mail’s daily active users to
110 million users globally, which
is an increase of more than 120%. (Nieva)
Secondly, Yahoo! has implemented the inorganic growth
strategy to keep up with the
continued growth of mobile usage all around the world. Out of
Yahoo!’s 1 billion users, 575
million of them are active on mobile. (Smith) These numbers go
to show just how important it is
for Yahoo! to keep their mobile segment strong. Part of their
inorganic growth strategy is to
acquire smaller companies with engineering talent and mobile
computing specialists. Over the
last 2 years, Yahoo! purchased more than 37 companies,
allowing them to become more
13
diversified and advanced in the fields of applications, mobile
phones, and tablets, which are
areas they had been lagging in compared to their peers.
Yahoo!’s strengths allow them to stay in the fight
against their competitors, but they
possess weaknesses that prevent them from being more
successful. One weakness is Yahoo!’s
relatively poor performance compared to their peers. As shown
in Figure 4, Yahoo! displays
stagnant growth rates compared to Google and Microsoft, who
have increasing revenues.
Yahoo!’s revenues declined by 1.3% in fiscal year 2014
compared to fiscal year 2013. Google,
on the other hand, had a revenue increase of 18.9%. Further,
Facebook’s revenue grew by 58%
during the same period.
Another weakness, as mentioned
earlier, is Yahoo!’s limited presence in
social media and networking. They have
always struggled to compete with their
peers in this segment, and therefore have
made various attempts to make a name for
themselves. For example, in 2005, Yahoo! announced Yahoo!
360º, a personal communication
portal that enabled users to create personal web sites, share
photos, and maintain blogs. After just
2 years of operation, global visits to the 360º site dropped
significantly. It never gained
popularity in the United States, so Yahoo! decided to stop
providing support for it. By 2009, the
entire service was officially closed. During its 4 years of
existence, it remained in its beta stage.
The ideology behind this move was for Yahoo! to find ways to
better-improve the service and
help it to become more popular, but they were never successful.
Today, Yahoo! still struggles to
Figure 4- Source:Gale Business Insights: Essentials 2015 Gale
Company Intelligence Database 2015
14
find solutions that enables them to closely compete with
Facebook and Google, who currently
hold the leadership positions.
Through the acquisition of Flickr and Tumblr, Yahoo! was able
to expand their presence
in the social networking segment. As shown above in Figure 3
(pg 9), they still sit far behind the
leaders, Google and Facebook, with only 7% market share
compared to Google’s 35% and
Facebook’s 45%. Video sharing is another part of the social
segment that Yahoo! lacks. In the
past, they announced plans of video sharing platforms similar to
YouTube, but they have yet to
mark their presence in this segment. Lack of presence in these
areas puts Yahoo! at a
disadvantage compared to their competitors.
Although Yahoo!’s weaknesses make it difficult for them to
compete, there are still
various opportunities that allow them to improve. One of these
opportunities exists in their recent
restructured partnership with Microsoft. In April 2015, the two
companies made a new search
deal that extends until 2020. According to Yahoo!’s
Corporation Information page on
Yahoo.com, the deal established a transformative relationship
between the two companies where
Microsoft exclusively provided paid and algorithmic search
services on PC to Yahoo!. In this
agreement, Microsoft pays Yahoo! a percentage of Bing Ads
revenue delivered from Yahoo!
searches. With the extension, Yahoo! is given the flexibility to
improve the user search
experience on both desktop and mobile devices. This agreement
doesn’t limit Yahoo! because
they still have the ability to use other back-end search
providers, such as Google or Ask.
A second opportunity Yahoo! can take advantage of is the
positive trend in smart device
usage. According to global statistics, smartphone shipment
volume is expected to reach 1,733.9
million units by 2017. This represents a compound annual
growth rate of 14% from the period of
15
2014 through 2017. By 2017, tablets and smartphones are
expected to account for 87% of the
overall smart connected devices around the world. (“Phablets
Will Start”)
Recently, it has been noted that Yahoo! has emphasized great
focus in the mobile
segment of their company. As previously mentioned, they
introduced a new version of their mail
product to capitalize on this growing trend. The new mail
product was released across four
platforms including desktop, iOS, Android, and Windows 8. In
May of this year, Yahoo!
released numerous updates to Flickr introducing additional
intelligent tool features that are more
user friendly, making it easier to access, organize, find, and
share photos and videos across
devices. Yahoo! is positioned to
benefit from their strong focus on
introducing products catered
specifically for smart devices.
It’s important to acknowledge
advertising spending is still on the rise,
and this is a revenue generator for Yahoo!. Figure 5 reveals that
there has been positive
momentum in the amount of advertising spent by companies and
is expected to continue
throughout 2018. The spending growth is an opportunity for
Yahoo! to generate a big portion of
revenues from display and mobile advertisements. According to
industry estimates, worldwide
mobile advertising generated $18 billion in 2014 compared to
$13.1 billion in 2013. (Yakowicz)
The increase was primarily due to the growth in smartphone and
tablet usage. With the influx of
spending, the mobile advertising space would be a key
growth/opportunity area for Yahoo!.
One last opportunity to mention is the increase in
search queries. Figure 6 shows the
constant upward trend of Internet users worldwide, reaching 3
billion users in 2014. Currently,
Figure 5 Source: "Total US Ad Spending to See Largest
Increase
Since 2004 - EMarketer." Total US Ad Spending to See Largest
Increase Since 2004 - EMarketer. Web. 1 Nov. 2015
16
there are 3.2 billion users, and by 2021, the industry estimates
there to be 3.8 billion users
worldwide. An increase in internet users leads to an increase in
the amount of internet searches.
This means that search queries on Yahoo! properties are also
expected to increase. Yahoo!’s
initiative to improve its
content will enhance user
experience, resulting in
greater market share in years
to come.
Reviewing the
struggles Yahoo! has faced since its inception, it’s clear to see
there are many threats in this segment of industry. There are
several things Yahoo! executives who are forming strategies
must be aware of for them to succeed. It is important to
remember, Yahoo! is a content portal and competing with
social platforms already offered by industry leaders
is very difficult but vital. While the social network
market is rapidly growing, Facebook is gaining the majority of
the visits. As shown in Figure 7,
the total amount of current social network users is 179.7 million
users. Of that amount, 156.5
million of them are Facebook users. (Fleischmann) Although
Yahoo! did acquire Tumblr, they
still sit far behind with 19.1 million users. Tumblr has not made
a huge impact in the social
networking segment and the platform did not offer a high
barrier to entry for competitors
because its model can be easily replicated. Tumblr has a very
small spread of demographics,
Figure 6 - Source: "Internet Users" Number of (2015). Web. 3
Nov 2015
Figure 7- Source: "Infographic: Who's Really Using Facebook,
Twitter, Pinterest, Tumblr and Instagram in 2015"
17
attracting mainly the youth and young adults and having
absolutely no presence in the senior
community. Facebook, who is the leader, is gaining much more
share visits than any other social
networking site, making it difficult for Yahoo! to compete.
Another threat is government regulations. Yahoo! is subject to
numerous laws, which can
and often do, vary from state to state or country to country.
There are different federal, state, and
international laws regarding privacy and protection of user data
that Yahoo! is required to
comply with. Yahoo! has already established their methods and
procedures on how to run their
business, so when new laws are put into place, it forces them to
adjust, which can lead to
expensive future compliance costs. Changes in practices can
also impact business and hamper
user engagement, putting the company at a big risk.
Examining Yahoo!’s SWOT analysis, we believe that although
Yahoo! is competing in
an industry with fierce competition, they still have a fighting
chance and they have not
completely lost the battle. As long as they capitalize on their
strengths and take the opportunities
presented to them, they can overpower many of the weaknesses
they possess and challenge the
threats that they encounter. While Yahoo! may have extreme
difficulty surpassing their powerful
peers, they still have plenty of room to grow and become a more
ferocious contender in their
industry.
Appendix 5: The kind of corporate-level strategy that the
company is pursuing.
Corporate level strategies focus on how to maximize the long
run profitability. Some of the
corporate level strategies we have seen Yahoo! implement are
acquisitions, horizontal integration
18
and vertical integration. In the early years of the growth, we
saw a large number of acquisitions.
Between its start and 2008, Yahoo! acquired or merged with
over 50 companies. Today we are
seeing horizontal integration with the example of Katie Couric
being added to Yahoo!’s news
team. Katie Couric became Yahoo!’s “Global Anchor” in 2014
with the strategic hope she’d
expand Yahoo!’s market shares and build credibility to Yahoo!
news.
Mayer’s vertical integration strategy can be seen by the many
brand extensions Yahoo! has
experienced. This included Yahoo! Magazines, which derived
from the acquisition of Tumblr.
Looking at the …
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ExampleProject / presentation topic:Project Management
Overview - SkyFallCreator's nameJames BondTeam
#007Answer & ReferenceQuestion#QuestionAns: A - Textbook
p. 301What is are the triple constraints of a projectaBudget,
schedule and qualitybSchedule, budget, scopecScope, quality,
budgetdQuality, schedule, and budgetenone of aboveAns: C -
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part of a projectbIt is not applied to a projectcIt is used in
majority of all projectsdThe correct name is risk
analysiseCompleted in Phase 2Ans: E (p. 4)3The Globalization
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approach to manage the Polaris missile project.eBegan after
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with almost anyone in any place at any time.Ans: A (p.
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technologiescLack of interest by the customerdShortage of
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(SME)Ans: E (p. 11)5The benefits, described in the text, of
using a project management approach to developing information
systems include all of the following except:aproviding a
common set of tools and controls which provides a common
language to compare projects throughout the organizationbthe
ability to better estimate and control costs and schedules which
leads to a more effective conservation of company
resourcescimproved communication and status reports leads
giving the developers the ability to manage expectations of
stakeholdersdcompetitive advantage for internal developers
whose work might have to be outsourced if the quality and cost
of their work can be bettered by outside competitionAns: A (p.
19)6Initiating processes:aSignal the beginning of the project or
phase.bRequires an organization to make a commitment of time
and resources.cAre part of the project management processes
and ITPM phases.dall of the aboveenone of the aboveAns: C (p.
42)7Things that must go right in order for the project plan to be
completed are
called:aPhasesbConstraintscAssumptionsdMetricseEssentialsAn
s: b (p. 67)8The documenting and archiving of all project
documents and evaluating the project in terms of MOV is the
definition of:aContract closurebAdministrative closurecEnd
phase evaluationdProject historyeFinal phase managementAns:
A (p. 61)9The project charteraand the project plan should be
developed together.band the project plan are the same
document.cand the project plan are developed in the scope
document.dis summarized in the project plan.eis developed by
the project sponsor.Ans: E (p. 33)10A communication plan, a
quality management plan, and change management plan are all
associated with which part of the project charter?:aProject
ResourcesbProject ScopecProject DescriptiondProject
ReferenceseProject AdministrationAns: B (p. 38)11Which of
the following statements are true?:aMilestones are logical units
of work.bBaseline plans are approved project plans.cAll tasks
are linear, i.e. have to be completed in a particular
sequence.dThe kick-off meeting typically begins the planning
phase of a project.eMOV are readily changed through change
control processes.Ans: E (p. 45)12Many organizations have a
kick-off meeting becauseaIt brings closure to the planning
phase of the projectbIt signals the initiation of the next phase of
the IT project methodologycIt communicates to everyone what
the project is aboutdIt can energize the stakeholders and get
everyone excited about working on the projecteAll of the above
Sheet3

1 Case Study #23 Is Yahoo!’s Business Model .docx

  • 1.
    1 Case Study #23: IsYahoo!’s Business Model Working in 2011 and Today? BUS 189 - Prof. Larry Gee Team # 5 - The A+ Students Aimee Gohil - # 7260 Sean Luis - # 0283 PM - Karin Proven - # 7884 Krysta Sumabat - # 2199 Friday, December 4 2015
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    2 Table of Contents Appendix1: History, Development, and Growth ……….………………………………………. 3 Appendix 2: Internal Strengths and Weakness ….………………………………………………. 8 Appendix 3: Nature of External Environment …..……………………………………………... 11 Appendix 4: SWOT Analysis…………….………….…………………………………… ……. 12 Appendix 5: Corporate-Level Strategy ...………………………………………………………. 18 Appendix 6: Business- Level Strategy …………………………………………………………. 20 Appendix 7: Company Structure and Control Systems………...………………………………. 22 Appendix 8: Recommendations...………………………………………………… ……………. 24 Case Question 1 ……….………………………………………………………….…….
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    ……… 25 Case Question2 ……….……………………………………………………………….. ……… 29 Case Question 3 ……………………………………………………………………….. ………. 32 Case Question 4 ………………………………………………………………………. ….……. 36 Conclusion ………………………………………………………………………… ….….……. 38 Bibliography………………………………….………………….… …………………….….…. 40 3 Appendix 1: The History, Development, and Growth
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    Yahoo! is aglobal technology company best known and recognized for their search engine, web portals, email services, and similar technologies. Yahoo! is currently working hard to stand out from competitors by executing several strategies, including corporate level strategies such as acquisitions, horizontal and vertical integration. It is clear with the struggles Yahoo! has faced over the past 7 years that they need to regain market share, expand their demographics, improve innovation, and build brand loyalty to be profitable. The company’s past strategy of acquisitions has been costly and has not produced the desired result. Yahoo! was founded by David Filo and Jerry Yang and the company is based in the heart of the Silicon Valley in Sunnyvale, California. (McCullough) In 1994, David and Jerry were graduate students at Stanford University, studying to obtain their Ph.D. in Electrical Engineering. The World Wide Web was a tool they used, but the user experience left them extremely frustrated. Thousands of pages would appear which were random and unorganized,
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    making the tooloverly cumbersome and difficult to use effectively. Realizing there was a better way to organize the information, the pair found a way to manage all these websites by specific content. What David and Jerry provided was a hierarchically organized index compared to an index of pages. They named this organized hierarchy “David and Jerry’s Guide to The World Wide Web” and published it in 1994. Initially their site was used mainly by their friends and for their own personal use. However, over time, more and more people came across the time saving website, spreading the word about “David and Jerry’s Guide to The World Wide Web.” The attention pushed the once personal organization space into the realm of a viral website. As the number of visitors 4 consistently increased, David and Jerry realized they had a valuable and unique commodity on their hands. Both graduate students decided to put aside their studies at Stanford in order to focus
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    on their searchengine and build the business. They renamed their website and company to Yahoo! and it was incorporated in 1995. Yahoo! became the first published web portal. The team was then joined by the first CEO, Tim Koogle, who worked vigorously in order to develop the initial business strategies. After recruiting many people in the marketing and software engineering departments, Yahoo! grew a competent team to accomplish their new strategies. One of the company’s strategies was to attract and retain various consumers and to become more than just a search engine. With this goal in mind, Yahoo!’s team created the following portals: personal, government, cultural, corporate, stock, and internet shopping portals. Yahoo! benefitted from each of these portals in different ways. The internet or e-commerce portal brought in revenue through implementation of user (seller and buyer) transaction fees. In 1996, one year after being incorporated, the company had revenue of $21.5 million. In 1998, after Koogle’s implementation of the new business strategy and model, the
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    revenue had grownto $203 million. (Hill and Jones) Over the years, Yahoo! wanted to become a “mega brand” for all online users. (Hill and Jones) Management put a huge focus on adding more content, which led to adding Rocketmail, Geocities, Broadcast.com, instant messaging, dating sites, and more retail sites. Furthermore, an extremely important factor of the new business strategy was the use of a customization feature. When having a customized website, customers’ needs and wants are specifically addressed. It’s an understood phenomenon called “switching costs” that prevents customers from moving to new providers. When people invest time into customizing their profile with Yahoo!, then it is less likely they will go elsewhere for the same information, unless someone 5 else created a killer application. Attracting people with the option for customization was successful. We see this success in the early 2000’s when the company’s market value was
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    approximately $220 billion,with about 15 million visitors a day. (Hill and Jones) In 2015 however, due to no longer being in the dot-com era, increased competition, and other companies such as Google and Facebook who were offering killer applications, Yahoo!’s market value has decreased to about $33.02 billion. (Yahoo Finance) Yahoo’s execute team saw several changes since it originated, including two interim CEOs Tim Morse (2011-2012) and Ross Levinsohn (2012). Carol Bartz, Yahoo!’s CEO from 2009-2011, had the arduous task to recover from a steep decline Yahoo! experienced in 2008. (See Figure 1). Bartz had begun to cut costs and worked to improve margins. It was stated Bartz changed the “organizational structure, replaced executives and cut 5% of the workforce.” (Oreskovic) By looking at Yahoo!’s revenue statement, it is
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    apparent that Bartz’sattempts to turn a profit were unsuccessful as Yahoo! still saw a steep decline all the way until 2011. Scott Thompson took the helm in 2012, after the interim CEO Tim Morse returned to his position as the company’s Chief Financial Officer. Thompson was Yahoo!’s CEO for less than a year, yet he implemented the filing of 10 patent infringement lawsuits against Facebook resulting in a partnership between the pair for new advertising. (Yousouf) After a resume scandal involving Thompson, he was fired from Yahoo! only four months after being hired. (Pepitone) In Figure 1 Gale Business Insights: Essentials 2015 gale Company Intelligence Database 2015 www.businessinsider.com 6 2012, Yahoo! brought Marissa Mayer, an ex-Google executive, to the team to help Yahoo! define their vision and stay current in the dynamic environment. Yahoo! showed 700 million users per month, but the company still struggled with generating revenue. (Perlroth) Since 2012
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    Marissa Mayer isthe youngest person to ever be a CEO of a fortune 500 company. (Leahey) The mission statement used to be “To be the most essential Global Internet Service for consumers and businesses.” This has been updated in their 24th revised mission statement that states Yahoo! is a guide focused on making users’ digital habits inspiring and entertaining.” (Le Ray) Yahoo has made many notorious acquisitions and has received the reputation that it “kills startups”. (Pepitone) The World Public Library shows Yahoo! has acquired nearly 90 different companies globally since 1997. Per CNN Money, some of the notable acquisitions include Broadcast.com which was acquired in April 1999 for $5.7 billion and GeoCities for $3.6 billion. Both were deemed unsuccessful with a hefty price tag (Pepitone). In 2003, under Terry Semel’s leadership, Yahoo! acquired Overture Services for $1.63 billion. SEC records state Overture Services, Inc. was an online advertising service that provided a “Pay-For-Performance” search which is the main area of Yahoo!’s generated revenue.
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    Yahoo!’s revenues showthat this expensive acquisition was a success because revenue continued to climb for four more years (See Figure 1). The spending continued under Semel. In July of 2004, Yahoo! acquired Oddpost to improve Yahoo!’s expertise in email services. The cost of the acquisition was $30 million. In 2012, under Marissa Mayer’s leadership, Yahoo! acquired Stamped. The Wall Street Journal stated Stamped was a mobile application company. This acquisition was right in line toward improving Yahoo!’s mobile realm. In 2013, Mayer also implemented the acquisition of Tumblr for $1.1 billion which included the acquisition of Tumblr’s founder, David Karp, as well. 7 This strategic move is seen more to obtain the talents of Karp over what Tumbler and their users have to offer. (O’Donnell) Most recently in July 2015, Yahoo! has acquired Polyvore, a leader in
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    social shopping. Thisacquisition is intended to improve “consumer and advertising offerings”. (Business Wire) Looking over Yahoo!’s history, we conclude this is a business in constant flux. There has been a revolving door of leadership and ideas that clearly has an impact on the company’s health, productivity and profitability. Most acquisitions should have a positive impact on the bottom line for a business, but it appears Yahoo! is still unable to effectively utilize this realm. While Mayer has made strides in slowing the decline and leveling off revenues, it’s clear Yahoo! needs to make headway to compete in the dynamic environment.
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    8 Appendix 2: Identificationof Company’s Internal Strengths and Weaknesses Strengths One of Yahoo!’s key strengths is their competitive advantage provided by their increasing user base. Within recent years, Yahoo! has made numerous acquisitions ranging from small startups, such as Summly, to popular websites, such as Polyvore and Tumblr. According to forbes.com, Tumblr is one of Yahoo!’s best acquisitions to date, not only for the number of users but also for its founder, David Karp. (O’Donnell) Through acquisitions, Yahoo! has been able to not only increase their user traffic, but also expand their demographics to bloggers, photo enthusiasts, the younger generation, and Millennials. Another strength Yahoo! is focusing its attention on is the mobile aspect of their company. They have made great strides in the industry by establishing a mobile presence
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    through their inorganicgrowth strategy. Part of the strategy is to acquire smaller companies with engineering talent and mobile computing specialists, such as Stamped. (Efrati) By doing this, Yahoo! has been able to broaden and strengthen their expertise in the mobile segment as the usage of mobile devices such as smartphones and tablets continues to increase. Weaknesses While several of the acquisitions stated in “Strengths” have improved Yahoo!’s ability to compete in the dynamic market, some of the acquisitions have taken billions from the bottom line, hurting Yahoo!’s overall performance. Costly acquisitions, such as Broadcast.com and GeoCities have been shut down and the funds used have no return on invested capital. These 9 acquisitions hurt Yahoo!’s overall profit margin. It is clear Yahoo! is relatively weak compared to its peers when comparing revenues of rival companies. While
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    their competitors, suchas Google and Microsoft, have been increasing their revenues at a quick pace, Yahoo! is unable to register growth (See Figure 2). The disparity between revenues highlights Yahoo!’s competitive disadvantage. This disadvantage has led to sluggish revenues. Yahoo!’s small footprint in the social media and social networking segments is also a weakness. Although the company acquired Flickr and Tumblr to develop a greater presence in the social networking segment, they lack significant presence compared to their peers, Facebook and Google. Figure 3 shows social login preferences for Facebook was 45% and Google was 35% while Yahoo!
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    trailing far behindwith only 7%. This discrepancy is very detrimental to Yahoo!’s future success and needs to be corrected to achieve profit. Figure 3- Source: Olson, Michael. "Social Login Trends Across the Web for Q4 2014." Janrain. 2 Jan 2014. Web. 3 Nov 015 Figure 2- Source: Gale Business Insights: Essentials 2015 Gale Company Intelligence Database 2015 10 Yahoo! also needs to have stability in leadership. There have been seven (7) Chief Executive Officers leading Yahoo! over the past decade, including two interim leaders, both in 2012. This constant change and shift leads to instability and a lack in confidence from consumers. Having an executive team that can build consumer confidence will help Yahoo! to achieve their goals.
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    11 Appendix 3: Thenature of the external environment surrounding the company The external environment of Yahoo! is highly competitive with several opportunities and threats that exist in this environment that surrounds Yahoo!. An opportunity that Yahoo! can take advantage of is making business deals at regular intervals to improve their business. By doing this, Yahoo! can designate a revenue sharing agreement that
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    benefits them both. Asecond emerging opportunity for Yahoo! is the strong growth in display advertising and mobile ad spending. Advertisers in the United States are expected to spend on various display ad formats served to desktops and laptops as well as mobile phones, tablets, and other devices. The rising spend will enable Yahoo! to boost their revenues. As Yahoo! continues to deliver products that cater to this market, they will be able to enjoy benefits from the positive trends in the industry. For external threats, Yahoo! is competing with social platforms that are major players in the industry. Facebook, for example, although is not the fastest growing social networking site, is gaining the highest number of visits. It has the potential to emerge as a medium that is cost effective for advertisers and has been proven to have the potential to emerge as an effective tool to reach audiences. Yahoo! suffers against better-performing social networking platforms in terms of user time, engagement, and advertiser interest.
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    Another threat isthe existence of stringent regulations. No matter the level of business, governments impose regulations and restrictions on companies and Yahoo is no exception. When the government passes new laws or makes changes, normal business processes can be affected, which can lead to legal ramifications, including fines and fees. 12 Appendix 4: A SWOT analysis After evaluating Yahoo!, we identified strengths that give them a competitive advantage in their industry. Ever since being appointed CEO of the company in 2012, Marissa Mayer has implemented changes that have made a positive impact and has allowed Yahoo! to gain some leverage. Firstly, as previously mentioned, Yahoo! enjoys a strong customer base as well as a significant reach. Various acquisitions contributed greatly to
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    this. For instance,the acquisition of Flickr in 2005 allowed Yahoo to gain an entire online community of photo researchers and enthusiasts all around the world. Another example is the acquisition of the blogging site, Tumblr, which was made in 2013. Prior to this acquisition, Yahoo! had a total amount of 800 million monthly active users. Tumblr, which continues to grow faster than any other social network, increased Yahoo!’s monthly active user base to over 1 billion. (Garner) Also contributing to Yahoo!’s increased user base was the company’s launch of the refreshed Yahoo! Mail application for mobile phones and tablets. Since the launch, the application alone increased Yahoo! Mail’s daily active users to 110 million users globally, which is an increase of more than 120%. (Nieva) Secondly, Yahoo! has implemented the inorganic growth strategy to keep up with the continued growth of mobile usage all around the world. Out of Yahoo!’s 1 billion users, 575 million of them are active on mobile. (Smith) These numbers go to show just how important it is
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    for Yahoo! tokeep their mobile segment strong. Part of their inorganic growth strategy is to acquire smaller companies with engineering talent and mobile computing specialists. Over the last 2 years, Yahoo! purchased more than 37 companies, allowing them to become more 13 diversified and advanced in the fields of applications, mobile phones, and tablets, which are areas they had been lagging in compared to their peers. Yahoo!’s strengths allow them to stay in the fight against their competitors, but they possess weaknesses that prevent them from being more successful. One weakness is Yahoo!’s relatively poor performance compared to their peers. As shown in Figure 4, Yahoo! displays stagnant growth rates compared to Google and Microsoft, who have increasing revenues. Yahoo!’s revenues declined by 1.3% in fiscal year 2014 compared to fiscal year 2013. Google, on the other hand, had a revenue increase of 18.9%. Further, Facebook’s revenue grew by 58%
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    during the sameperiod. Another weakness, as mentioned earlier, is Yahoo!’s limited presence in social media and networking. They have always struggled to compete with their peers in this segment, and therefore have made various attempts to make a name for themselves. For example, in 2005, Yahoo! announced Yahoo! 360º, a personal communication portal that enabled users to create personal web sites, share photos, and maintain blogs. After just 2 years of operation, global visits to the 360º site dropped significantly. It never gained popularity in the United States, so Yahoo! decided to stop providing support for it. By 2009, the entire service was officially closed. During its 4 years of existence, it remained in its beta stage. The ideology behind this move was for Yahoo! to find ways to better-improve the service and help it to become more popular, but they were never successful. Today, Yahoo! still struggles to
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    Figure 4- Source:GaleBusiness Insights: Essentials 2015 Gale Company Intelligence Database 2015 14 find solutions that enables them to closely compete with Facebook and Google, who currently hold the leadership positions. Through the acquisition of Flickr and Tumblr, Yahoo! was able to expand their presence in the social networking segment. As shown above in Figure 3 (pg 9), they still sit far behind the leaders, Google and Facebook, with only 7% market share compared to Google’s 35% and Facebook’s 45%. Video sharing is another part of the social segment that Yahoo! lacks. In the past, they announced plans of video sharing platforms similar to YouTube, but they have yet to mark their presence in this segment. Lack of presence in these areas puts Yahoo! at a disadvantage compared to their competitors. Although Yahoo!’s weaknesses make it difficult for them to compete, there are still various opportunities that allow them to improve. One of these
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    opportunities exists intheir recent restructured partnership with Microsoft. In April 2015, the two companies made a new search deal that extends until 2020. According to Yahoo!’s Corporation Information page on Yahoo.com, the deal established a transformative relationship between the two companies where Microsoft exclusively provided paid and algorithmic search services on PC to Yahoo!. In this agreement, Microsoft pays Yahoo! a percentage of Bing Ads revenue delivered from Yahoo! searches. With the extension, Yahoo! is given the flexibility to improve the user search experience on both desktop and mobile devices. This agreement doesn’t limit Yahoo! because they still have the ability to use other back-end search providers, such as Google or Ask. A second opportunity Yahoo! can take advantage of is the positive trend in smart device usage. According to global statistics, smartphone shipment volume is expected to reach 1,733.9 million units by 2017. This represents a compound annual growth rate of 14% from the period of
  • 25.
    15 2014 through 2017.By 2017, tablets and smartphones are expected to account for 87% of the overall smart connected devices around the world. (“Phablets Will Start”) Recently, it has been noted that Yahoo! has emphasized great focus in the mobile segment of their company. As previously mentioned, they introduced a new version of their mail product to capitalize on this growing trend. The new mail product was released across four platforms including desktop, iOS, Android, and Windows 8. In May of this year, Yahoo! released numerous updates to Flickr introducing additional intelligent tool features that are more user friendly, making it easier to access, organize, find, and share photos and videos across devices. Yahoo! is positioned to benefit from their strong focus on introducing products catered specifically for smart devices. It’s important to acknowledge
  • 26.
    advertising spending isstill on the rise, and this is a revenue generator for Yahoo!. Figure 5 reveals that there has been positive momentum in the amount of advertising spent by companies and is expected to continue throughout 2018. The spending growth is an opportunity for Yahoo! to generate a big portion of revenues from display and mobile advertisements. According to industry estimates, worldwide mobile advertising generated $18 billion in 2014 compared to $13.1 billion in 2013. (Yakowicz) The increase was primarily due to the growth in smartphone and tablet usage. With the influx of spending, the mobile advertising space would be a key growth/opportunity area for Yahoo!. One last opportunity to mention is the increase in search queries. Figure 6 shows the constant upward trend of Internet users worldwide, reaching 3 billion users in 2014. Currently, Figure 5 Source: "Total US Ad Spending to See Largest Increase Since 2004 - EMarketer." Total US Ad Spending to See Largest Increase Since 2004 - EMarketer. Web. 1 Nov. 2015
  • 27.
    16 there are 3.2billion users, and by 2021, the industry estimates there to be 3.8 billion users worldwide. An increase in internet users leads to an increase in the amount of internet searches. This means that search queries on Yahoo! properties are also expected to increase. Yahoo!’s initiative to improve its content will enhance user experience, resulting in greater market share in years to come. Reviewing the struggles Yahoo! has faced since its inception, it’s clear to see there are many threats in this segment of industry. There are several things Yahoo! executives who are forming strategies must be aware of for them to succeed. It is important to remember, Yahoo! is a content portal and competing with social platforms already offered by industry leaders
  • 28.
    is very difficultbut vital. While the social network market is rapidly growing, Facebook is gaining the majority of the visits. As shown in Figure 7, the total amount of current social network users is 179.7 million users. Of that amount, 156.5 million of them are Facebook users. (Fleischmann) Although Yahoo! did acquire Tumblr, they still sit far behind with 19.1 million users. Tumblr has not made a huge impact in the social networking segment and the platform did not offer a high barrier to entry for competitors because its model can be easily replicated. Tumblr has a very small spread of demographics, Figure 6 - Source: "Internet Users" Number of (2015). Web. 3 Nov 2015 Figure 7- Source: "Infographic: Who's Really Using Facebook, Twitter, Pinterest, Tumblr and Instagram in 2015" 17 attracting mainly the youth and young adults and having absolutely no presence in the senior community. Facebook, who is the leader, is gaining much more share visits than any other social
  • 29.
    networking site, makingit difficult for Yahoo! to compete. Another threat is government regulations. Yahoo! is subject to numerous laws, which can and often do, vary from state to state or country to country. There are different federal, state, and international laws regarding privacy and protection of user data that Yahoo! is required to comply with. Yahoo! has already established their methods and procedures on how to run their business, so when new laws are put into place, it forces them to adjust, which can lead to expensive future compliance costs. Changes in practices can also impact business and hamper user engagement, putting the company at a big risk. Examining Yahoo!’s SWOT analysis, we believe that although Yahoo! is competing in an industry with fierce competition, they still have a fighting chance and they have not completely lost the battle. As long as they capitalize on their strengths and take the opportunities presented to them, they can overpower many of the weaknesses they possess and challenge the threats that they encounter. While Yahoo! may have extreme difficulty surpassing their powerful
  • 30.
    peers, they stillhave plenty of room to grow and become a more ferocious contender in their industry. Appendix 5: The kind of corporate-level strategy that the company is pursuing. Corporate level strategies focus on how to maximize the long run profitability. Some of the corporate level strategies we have seen Yahoo! implement are acquisitions, horizontal integration 18 and vertical integration. In the early years of the growth, we saw a large number of acquisitions. Between its start and 2008, Yahoo! acquired or merged with over 50 companies. Today we are seeing horizontal integration with the example of Katie Couric being added to Yahoo!’s news team. Katie Couric became Yahoo!’s “Global Anchor” in 2014 with the strategic hope she’d expand Yahoo!’s market shares and build credibility to Yahoo!
  • 31.
    news. Mayer’s vertical integrationstrategy can be seen by the many brand extensions Yahoo! has experienced. This included Yahoo! Magazines, which derived from the acquisition of Tumblr. Looking at the … TemplateInstructions:Use template as is. Do not change or alter format. Type over each row and provide correct answer.Submit questions per assignment instructions.Multiple choice questions only. Difficulty level: Moderate.Note: If anyone challenges your answer and prove that your answer is incorrect then your overall earned score is automatically reduced by 50%.Project / presentation topic:xxCreator's name:xxTeam#xxAnswer & ReferenceQuestion#Questionx1<Type question here>a<Possible answer here>b<Possible answer here>c<Possible answer here>d<Possible answer here>e<Possible answer here>x2<Type question here>a<Possible answer here>b<Possible answer here>c<Possible answer here>d<Possible answer here>e<Possible answer here>x3<Type question here>a<Possible answer here>b<Possible answer here>c<Possible answer here>d<Possible answer here>e<Possible answer here>x4<Type question here>a<Possible answer here>b<Possible answer here>c<Possible answer here>d<Possible answer here>e<Possible answer here>x5<Type question here>a<Possible answer here>b<Possible answer here>c<Possible answer here>d<Possible answer here>e<Possible answer here>x6<Type question here>a<Possible answer here>b<Possible answer here>c<Possible answer here>d<Possible answer here>e<Possible answer here>x7<Type question here>a<Possible answer here>b<Possible answer
  • 32.
    here>c<Possible answer here>d<Possibleanswer here>e<Possible answer here>x8<Type question here>a<Possible answer here>b<Possible answer here>c<Possible answer here>d<Possible answer here>e<Possible answer here>x9<Type question here>a<Possible answer here>b<Possible answer here>c<Possible answer here>d<Possible answer here>e<Possible answer here>x10<Type question here>a<Possible answer here>b<Possible answer here>c<Possible answer here>d<Possible answer here>e<Possible answer here>x11<Type question here>a<Possible answer here>b<Possible answer here>c<Possible answer here>d<Possible answer here>e<Possible answer here>x12<Type question here>a<Possible answer here>b<Possible answer here>c<Possible answer here>d<Possible answer here>e<Possible answer here> ExampleProject / presentation topic:Project Management Overview - SkyFallCreator's nameJames BondTeam #007Answer & ReferenceQuestion#QuestionAns: A - Textbook p. 301What is are the triple constraints of a projectaBudget, schedule and qualitybSchedule, budget, scopecScope, quality, budgetdQuality, schedule, and budgetenone of aboveAns: C - Slides p. 42How is risk management applied to a project?aIs the part of a projectbIt is not applied to a projectcIt is used in majority of all projectsdThe correct name is risk analysiseCompleted in Phase 2Ans: E (p. 4)3The Globalization eraaBegan in the early 1980s with the personal computerbBegan in the 1960s when large organizations first purchased a centralized mainframe or minicomputer.cBegan in the 1990s when many organizations sought to regain control of the IT deparment and hired a Chief Data Processing OfficerdIs credited to the U.S. Navy when it used a project management approach to manage the Polaris missile project.eBegan after Y2K with the combination of technology and political barriers flattening the world so that people and organizations can work
  • 33.
    with almost anyonein any place at any time.Ans: A (p. 7)4According to the CHAOS studies, which of the following factors tend to be most prevelant for challenged or failed projects?aLack of user input and incomplete requirementsbNew technologiescLack of interest by the customerdShortage of highly trained technical expertseLack of subject matter experts (SME)Ans: E (p. 11)5The benefits, described in the text, of using a project management approach to developing information systems include all of the following except:aproviding a common set of tools and controls which provides a common language to compare projects throughout the organizationbthe ability to better estimate and control costs and schedules which leads to a more effective conservation of company resourcescimproved communication and status reports leads giving the developers the ability to manage expectations of stakeholdersdcompetitive advantage for internal developers whose work might have to be outsourced if the quality and cost of their work can be bettered by outside competitionAns: A (p. 19)6Initiating processes:aSignal the beginning of the project or phase.bRequires an organization to make a commitment of time and resources.cAre part of the project management processes and ITPM phases.dall of the aboveenone of the aboveAns: C (p. 42)7Things that must go right in order for the project plan to be completed are called:aPhasesbConstraintscAssumptionsdMetricseEssentialsAn s: b (p. 67)8The documenting and archiving of all project documents and evaluating the project in terms of MOV is the definition of:aContract closurebAdministrative closurecEnd phase evaluationdProject historyeFinal phase managementAns: A (p. 61)9The project charteraand the project plan should be developed together.band the project plan are the same document.cand the project plan are developed in the scope document.dis summarized in the project plan.eis developed by the project sponsor.Ans: E (p. 33)10A communication plan, a quality management plan, and change management plan are all associated with which part of the project charter?:aProject
  • 34.
    ResourcesbProject ScopecProject DescriptiondProject ReferenceseProjectAdministrationAns: B (p. 38)11Which of the following statements are true?:aMilestones are logical units of work.bBaseline plans are approved project plans.cAll tasks are linear, i.e. have to be completed in a particular sequence.dThe kick-off meeting typically begins the planning phase of a project.eMOV are readily changed through change control processes.Ans: E (p. 45)12Many organizations have a kick-off meeting becauseaIt brings closure to the planning phase of the projectbIt signals the initiation of the next phase of the IT project methodologycIt communicates to everyone what the project is aboutdIt can energize the stakeholders and get everyone excited about working on the projecteAll of the above Sheet3