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Yahoo and Amazon: Building a Competitive Advantage Essay


Brief history of the companies

The Yahoo and the Amazon are online companies which also offer similar trading platforms across the globe. The Amazon.com was established in the year 1994. The company has been active in the online shopping platform. From its inception, the Amazon Company’s product line objective has been to provide quality products at the convenience of the clients.

The services offered by the company include online advertisement, online purchasing, and online consultancy. The Amazon has a product or service to any one, from a toddler to an old man. The company has expanded from the US to all other continents due to its customer-centricity business model.

On the other hand, the Yahoo Company also operates on the online platform and was founded in 1994 and has experienced rapid growth over the years. Yahoo offers series of online products such as broadband, Yahoo finance, games, online TV, and online shopping.

Yahoo expanded due to the various online platforms its offers to different customers across the globe due to its ‘good, better, best’ pricing strategy. As a result, the demand for its products and survives has continued to grow since the objective of this pricing strategy is to attract and retain customers who want affordable goods and services.

Key strategic differences

Customer-to-Customer verses Business-to-Business platforms

Amazon has employed the laggard activism strategy to not only capture the global market, but also leapfrog the dominant Yahoo Company. Unlike Yahoo which operates on the Customer-to-Customer (C2C) platform, the dynamic Amazon functions on the Business-to-Business (B2B) platform.

As a result, the Amazon has penetrated the global market due to a balance in factors such as the Western business style, global business approach, and flexible organizational structure (Kashmanian, Wells, & Keenan, 2011).

In order to penetrate the expanding global market, Amazon’s business platform was modified through introduction of services such as premium customer experience, compact support from the community, and low charges for small businesses. For instance, the Customer-to-Customer platform adopted by Yahoo has created and successfully implemented the marketing strategy to ensure customer loyalty and market expansion.

The company’s product multi-branding as a positioning strategy has enabled it to survive competition. For instance, the online shopping and Yahoo finance are tailed to address the individual customer needs. Besides, the company has managed to balance the elements of intangibility, inseparability, and heterogeneity in the 4Ps of its market mix due to improved product visibility for each target customer segment (Coulson-Thomas, 2013).

Open-system verses closed-system

The Yahoo Company’s business model is based on the C2C market. The attitude of the CEO towards localization is an indication of clear vision within the global market. The goal is to concentrate on the local market through use of an open-system business model. The strategy was meant to take advantage of the challenge of ‘smallness’.

On the other hand, the Amazon depends on the closed-system approach in execution of its business strategies. Unlike the Yahoo which developed a fixed entry strategy in the market that was characterized by overconfidence and inertia, the Amazon was packaged as a humble and flexible online technological trading platform.

As a result of the stable knowledge of the global market, Amazon jumpstarted operations through a flexible and rational business decision processes.

Basically, this strategy was helpful since changing would not be as costly as those companies that have fixed and mature formulas for doing business such as the Yahoo Company (Coulson-Thomas, 2013). It is apparent that the Amazon Company has more efficient knowledge and experience in uniqueness of products and services than the Yahoo Company.

Strategic planning: Comparative analysis

The main variables of the Amazon business operations are connected at the central point of strategic planning which encompasses costing, speed, quality, flexibility, and dependability to create a smooth continuous operation tracking model.

For instance, the company has been in a position to establish online business leadership position due to its appeal to the local customers, in terms of easy to use interface, free trials, and localized purchasing experience.

On the other hand, the major part of the success puzzle for the Yahoo business management delivery operates on the periphery of the soft skills involving the timeless vision of organizational principles, defining value of the business, determining requirements, and clarifying the vision.

Besides, the success puzzle is proactive in building teams, mitigating task, resolving issues, and providing direction as incorporated in the operations management system. The management of the Amazon Company realized that its success laid in the B2B strategy, which was modified to function on the customer satisfaction.

The corporate strategies of the Amazon Company were also based on the traditional marketing, localized human resource, and efficiency in the monitoring units. On the other hand, the Yahoo’s platform was not modified to guarantee the localized experience to its customers across the globe (Hill & Jones, 2013).

The Yahoo Company depends on the local means of production in running the business. The business model was to create a decentralized system in terms of a management line for the expansion within the global market. The approach adopted by the management was to ensure that decision making process is shortened thus, avoidance of excessive bureaucracy.

Furthermore, adoption of the decentralized system of management was meant to ensure direct contact with customers within the shortest time possible. The company heavily depended on the local resource to achieve a rational decision science. On the other hand, the Amazon Company established a hybrid system of integrating the western resources within its business market.

However, the company maintained its centralized management system from the Silicon Valley. Besides, the company used international resources such as the management team and system support staff (Hill & Jones, 2013).

The ideal strategy for performance measurement should be aligned to the communication channel in the company. For implementation of the strategy, the management of the Yahoo Company does not balance the short term and long term consideration towards decision making since the resource allocation and use is centralized.

Management strategies that ensure long term obligations are fulfilled and consider mostly the role played by resources invested in technology, continued innovations in new products, and conducting intensive researchers in the market to identify fresh niches.

Unlike the costing system of the Amazon Company, which is internalized within the local market, the payment system of the Yahoo Company is externalized within other platforms (Hill & Jones, 2013).

Distinctive competencies

The Amazon Company has a very unique organization structure. The company exhibits distinctive and unique organization configuration that is shaped by the organization’s goals. In advancing organizational learning, the system helps the business to avoid learning disabilities besides being proactive in organization thinking.

The Yahoo organization exhibits flexibility in its organizational arrangement that enables jobs to be redesigned to facilitate work-based innovations.

The teamwork based organization structure actually identifies the hierarchy of the management in order to understand any complex network. In addition, the arrangement provides myriad illustrations of the persuasive importance of problem definition within communication contemporary context (Amit & Zott, 2012).

Unlike the Amazon Company, which depends on different functions such as the Asia regional office, the head office in Silicon Valley and intuitions of the branch managers, the Yahoo Company has a simple organizational structure model comprising of a single CEO, who is in a position to localize the business management strategies within the conservative and open markets.

The Yahoo organization exhibits flexibility in its organizational structure that facilitates work based innovations. The company has diversified its operations to merchant service and small business segments to ensure long term sustainability.

Generally, when all other factors are held constant, the Yahoo Company is in a better positioned to sustain its business within the market due to its unique services, wide appeal to customers, and relatively flexible management model.

Recommendations

Operational efficiency

Operational efficiency and market niche provide an indication of how well the company manages its resources, that is, how well it employs its assets to generate sales and income. It also shows the level of activity of the corporation as indicated by the turnover ratios. The level of activity for the Amazon Company has remained relatively stable despite threat of competition, constant change of taste, and varying preference.

In order to stay afloat, the company should streamline its operational costs and introduce freelance marketers paid on a commission. The marketers will operate from their homes to save the company daily expenses of running its business. Through implementing this proposal, the company will reduce its wage bill and seal cost loop holes (Amit & Zott, 2012).

Consumer Centricity

Properly designed online marketing and product distribution management facilitate the success and sustainability in online marketing. To increase credibility and maintain professionalism, the current channels of reaching the consumers at the Yahoo should be tailored to encompass processes and features that flawlessly facilitate a healthy and a lifetime relationship between the business and its clients.

The new development elements that the company should incorporate include trust, liability acceptance, distribution, fair retribution process, and passing accurate information to target audience in order to restore confidence within these networks.

Essentially, the success of e-marketing depends on proper alignment of a functional team that is responsible for the creation of flexible and quantifiable measurement tracking tools for periodically reviewing results (Hill & Jones, 2013). This strategy will ensure that the business is sustainable.

Conclusion

Reflectively, the Amazon and the Yahoo companies should introduce a functional team with the essential knowledge in social media and tools used in marketing. The two companies have three building blocks of learning such as a supportive learning environment, concrete learning processes, and practice leadership that reinforce innovation.

However, the companies differ in their operational strategy and organizational planning. The Yahoo Company operates within the Customer-to-Customer platform while the Amazon operates within the Business-to-Business model. The Amazon should adopt the operations efficiency strategy to sustain its market while the Yahoo should adopt the consumer centricity strategy to sustain its competitive advantage.

References

Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41-49.

Coulson-Thomas, C. (2013). Implementing strategies and policies. Strategic Direction, 29(3), 33-35. doi:10.1108/02580541311304643

Hill, C., & Jones, G. R. (2013). Strategic management: An integrated approach (10th ed.). Independence, KY: Cengage.

Kashmanian, R. M., Wells, R. P., & Keenan, C. (2011). Corporate environmental sustainability strategy. The Journal of Corporate Citizenship, 44, 107-130.

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IvyPanda. 2019. "Yahoo and Amazon: Building a Competitive Advantage." June 21, 2019. https://ivypanda.com/essays/yahoo-and-amazon-building-a-competitive-advantage/.

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IvyPanda. (2019) 'Yahoo and Amazon: Building a Competitive Advantage'. 21 June.

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