Case Study Description of Yahoo! Inc.: Marissa Mayer's Challenge
In July 2012, Marissa Mayer was appointed chief executive officer (CEO) of Yahoo! Inc. and was tasked by Yahoo's board of directors with turning around the company's performance. Mayer's ascension to the top position came with a number of challenges. Yahoo had seen seven CEOs come and go in its 18-year existence, five of whom had left within the last five years. In addition, Yahoo faced a number of corporate governance challenges, including the disgraceful exit of its former CEO amid charges that he had falsified his resumA?, and the demands of an activist investor who was seeking four board seats to influence the company's strategic direction. Mayer also had to decide on how best to use the proceeds from the partial sale of the company's investment in the Alibaba Group, a Chinese Internet company. Mayer had to confront these issues prior to presenting her strategic plan to the company's board in mid-September. Author Ram Subramanian is affiliated with Montclair State University
Swot Analysis of "Yahoo! Inc.: Marissa Mayer's Challenge" written by Ram Subramanian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Yahoo Mayer facing as an external strategic factors. Some of the topics covered in Yahoo! Inc.: Marissa Mayer's Challenge case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Yahoo! Inc.: Marissa Mayer's Challenge casestudy better are - – there is backlash against globalization, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing,
technology disruption, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Yahoo! Inc.: Marissa Mayer's Challenge
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Yahoo! Inc.: Marissa Mayer's Challenge case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yahoo Mayer, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yahoo Mayer operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Yahoo! Inc.: Marissa Mayer's Challenge can be done for the following purposes –
1. Strategic planning using facts provided in Yahoo! Inc.: Marissa Mayer's Challenge case study
2. Improving business portfolio management of Yahoo Mayer
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Yahoo Mayer
Strengths Yahoo! Inc.: Marissa Mayer's Challenge | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yahoo Mayer in Yahoo! Inc.: Marissa Mayer's Challenge Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Yahoo! Inc.: Marissa Mayer's Challenge Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– Yahoo Mayer has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Yahoo! Inc.: Marissa Mayer's Challenge - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Yahoo Mayer
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Yahoo Mayer does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Yahoo Mayer is one of the leading recruiters in the industry. Managers in the Yahoo! Inc.: Marissa Mayer's Challenge are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Yahoo Mayer is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Yahoo Mayer is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Yahoo! Inc.: Marissa Mayer's Challenge Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Yahoo Mayer in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Leadership & Managing People field
– Yahoo Mayer is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Yahoo Mayer in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Yahoo Mayer in the sector have low bargaining power. Yahoo! Inc.: Marissa Mayer's Challenge has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Yahoo Mayer to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Yahoo Mayer has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Yahoo! Inc.: Marissa Mayer's Challenge Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Yahoo Mayer has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Strong track record of project management
– Yahoo Mayer is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Yahoo Mayer digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Yahoo Mayer has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Yahoo! Inc.: Marissa Mayer's Challenge | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Yahoo! Inc.: Marissa Mayer's Challenge are -
Slow to strategic competitive environment developments
– As Yahoo! Inc.: Marissa Mayer's Challenge HBR case study mentions - Yahoo Mayer takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High bargaining power of channel partners
– Because of the regulatory requirements, Ram Subramanian suggests that, Yahoo Mayer is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow decision making process
– As mentioned earlier in the report, Yahoo Mayer has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Yahoo Mayer even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Yahoo Mayer supply chain. Even after few cautionary changes mentioned in the HBR case study - Yahoo! Inc.: Marissa Mayer's Challenge, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Yahoo Mayer vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Yahoo Mayer is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Yahoo Mayer needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Yahoo Mayer to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Yahoo Mayer has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Products dominated business model
– Even though Yahoo Mayer has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Yahoo! Inc.: Marissa Mayer's Challenge should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Yahoo Mayer has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Aligning sales with marketing
– It come across in the case study Yahoo! Inc.: Marissa Mayer's Challenge that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Yahoo! Inc.: Marissa Mayer's Challenge can leverage the sales team experience to cultivate customer relationships as Yahoo Mayer is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Yahoo! Inc.: Marissa Mayer's Challenge has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Yahoo Mayer 's lucrative customers.
High cash cycle compare to competitors
Yahoo Mayer has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Yahoo! Inc.: Marissa Mayer's Challenge | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Yahoo! Inc.: Marissa Mayer's Challenge are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Yahoo Mayer to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Low interest rates
– Even though inflation is raising its head in most developed economies, Yahoo Mayer can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Building a culture of innovation
– managers at Yahoo Mayer can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Yahoo Mayer can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Yahoo Mayer can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Yahoo Mayer to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Manufacturing automation
– Yahoo Mayer can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Loyalty marketing
– Yahoo Mayer has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Yahoo Mayer in the consumer business. Now Yahoo Mayer can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Yahoo Mayer can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Yahoo! Inc.: Marissa Mayer's Challenge suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Leveraging digital technologies
– Yahoo Mayer can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Yahoo Mayer can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Yahoo! Inc.: Marissa Mayer's Challenge, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Yahoo Mayer has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Yahoo! Inc.: Marissa Mayer's Challenge - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Yahoo Mayer to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Yahoo! Inc.: Marissa Mayer's Challenge External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Yahoo! Inc.: Marissa Mayer's Challenge are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Yahoo! Inc.: Marissa Mayer's Challenge, Yahoo Mayer may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Shortening product life cycle
– it is one of the major threat that Yahoo Mayer is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Yahoo Mayer in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Yahoo Mayer has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Yahoo Mayer needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Yahoo Mayer with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Yahoo Mayer can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Yahoo Mayer business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Yahoo Mayer can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High dependence on third party suppliers
– Yahoo Mayer high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Yahoo Mayer.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Yahoo Mayer in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Yahoo! Inc.: Marissa Mayer's Challenge Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Yahoo! Inc.: Marissa Mayer's Challenge needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Yahoo! Inc.: Marissa Mayer's Challenge is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Yahoo! Inc.: Marissa Mayer's Challenge is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Yahoo! Inc.: Marissa Mayer's Challenge is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Yahoo Mayer needs to make to build a sustainable competitive advantage.
