Lacking Growth At Yahoo! Inc. Essay

1142 words - 5 pages

The goal of a corporation is long-term success and growth. In order to meet this goal companies must be evaluating the market and environment constantly and be prepared for changes that will happen. Even a previously widely successful company can fail if the company does not manage change and have a strategic plan in place. By using environmental scanning a company can monitor trends that may affect performance and use this information to maintain and drive success. The purpose of this paper is to evaluate how Yahoo, Inc. could have used environmental scanning to improve performance and prevented the decline of the company.
Environmental scanning is the acquisition and use of information about events, trends and relationships in the organization’s external environment (Choo, 2001). This information can then be used in the planning of future actions for an organization. There are many variables that contribute to environmental scanning, including, natural, societal and task environments (Wheelen & Hunger, 2012). In the case of Yahoo, Inc. the following external factors had major influence in the struggle the company has faced recently: technology advancement, changing pace of life, and competitor analysis.
Technology Advancement
Technology continues to grow and change at an amazing rate. Companies come and go from the marketplace rapidly, and can be highly specialized. Historically, Yahoo had generated a large portion of its income from advertising revenue. As companies fail or leave the market, this affects Yahoo, by losing a customer who is no longer advertising (Indu & Gupta, 2007). By evaluating internet companies, and their life span, Yahoo could have recognized this issue more quickly and refocused efforts on retaining advertising or increasing revenue from advertising. Yahoo reacted to this issue far too late in 2005 by developing the new system “Panama.” By this time the competitor Google had already become more popular with advertisers (Indu & Gupta, 2007).
Yahoo struggled to deliver the Panama program in the time period identified and had to push back the debut multiple times. Continuing to delay this development not only further damaged ad revenues, but caused investors to lose faith in the company (Holahan, 2006). Yahoo has been able to use the customized pages such as Yahoo Finance and Yahoo Autos to attract specific advertisers with a target market unlike other sites (Indu & Gupta, 2007). The introduction of Panama for search-based advertising was effective in improving revenues, but Yahoo does not have the draw of social networking to expand on advertising.
Changing Pace of Life
Social networking sites such as Facebook, Google+, and LinkedIn have created new and constant modes of communication. People use smart phones not only for phones calls, but text messaging, checking status updates, and use of the internet. Being in constant connection with those around you provides an opportunity for...

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