The evolution of strategy

Vikram Jethwani
BusinessStrategy InternationalInstituteofForeignTrade(IIFT)

Yahoos Yahoo s strategy: To what extent it was planned

In an unidentified marketplace, Yahoos Yahoo s strategy was to have no strategy, to began with Flexibility y the only y strategy, gy, p per se, , that worked for Yahoo initially y It recruited out-of-the-box thinking employees And let the creative energies make its billion-dollar fortunes The essence was to create new market, , new products, p , new industries - being futuristic in real sense Products were launched quietly - without much fanfare

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Yahoos Yahoo s strategy: To what extent it was planned

Co-founded by Jerry Yang and David Filo

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Emergent response to unforeseen events

Yahoo aimed at excelling in future markets and not just to grab its share in the existing market Its initial strategy gy was subtle and focused toward branding, g, innovation and a flexible work culture Innovation was fostered to the extent possible In a human intellect based industry, it is critical that the product edge is not lost because of human resource attrition To tackle this, Yahoo ensured that every engineer work on every project

Grant Thornton International. All rights reserved.

Emergent response to unforeseen events

Yahoo aimed at excelling in future markets and not just to grab its share in the existing market Its initial strategy gy was subtle and focused toward branding, g, innovation and a flexible work culture Innovation was fostered to the extent possible In a human intellect based industry, it is critical that the product edge is not lost because of human resource attrition To tackle this, Yahoo ensured that every engineer work on every project

Grant Thornton International. All rights reserved.

Positioning for slowdown

The company emphasized on collaboration, while many of the players were too big to be acquired Its how-to rules helped p it to remain clear, , focused and organised g thereby enabling to meet unforeseen business conditions However, its dependence on advertising revenues from dot com companies resulted in substantial loss (US$84 million against the profit of US$169 million in the corresponding period of previous year) in the first nine months of 2001 courtesy: the dot com burst This was an eye opener

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What could be done?

More diversification was required q to reduce dependence p on one p particular type of industry dot com companies in this case Revenue streams need to be broadened with the change in economic environment Sector that are relatively less-affected by economic slowdown could be targeted; entertainment being one of them Country-specific services could also be promoted Search S h engine i services i were set t backstage b k t with ith major j focus f on direct di t revenue generating streams Google captured this vacuum fast

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Source of potential long-term advantage

Where does it come from?

Enhanced g global reach by y setting g up p operational p bases in different countries Target-advertising was need of the hour for advertisers seeking to measure results and avoid mass-oriented vague advertising Yahoo strikes the right cord here Yahoo keeps enjoying the first mover advantage on the Internet

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Koogles resignation: Role of a CEO in a public company

Full accountability y towards stakeholders on companys p y performance p Responsibility of analysing industry trends, strengths, weaknesses, opportunities and threats Being responsive ignorance is bliss, but for a while! Developing and re re-aligning aligning strategies in response to near to long term business environment

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Th k Thanks.

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