NAME: Muzaffer Ali KhanSTUDENT ID: 214438025COURSE CODE: SEB 711SUBJECT: MANAGING AND DEVELOPING AND INNOVATIONASSIGNMNET NAME: ANALYSIS OF FIVE PORTER FORCESDUE DATE: 10/05/15

Introduction:

David Filo and Jerry Yang are the founders of Yahoo, it was started in February 1994 in a campus. In April 1995, it was funded by Sequoia Capital with an investment of about $2million and it went on public in April 1996, its headquarter is situated in Sunnyvale, CA. Yahoo! Main focus is on developing content, communication and community platform that delivers rich consumers experiences and advertising solutions across the screens of peoples live(Yahoo!, 2011). On the other hand, Googles focus is to gather universal data and make it easily available and applicable (Google, 2011).Yahoo! and Google both dominate the cyberspace with their different strategies.This report will perform analysis on yahoo using Michael Porters five forces framework. Porter five forces Framework:-

1) Rivalry among existing firms: Google, Microsoft, Bing and AOL etc are the main competitors in internet search engines of Yahoo!, there are other rivals also but they have negligible amount of traffic flow. Large industries may lead to decrease in profits, no customer switching cost between internet search engines enhances rivalry. Yahoo operates in the cyber world it deals with products, accommodation and content markets which are characterised by rapid change, conversing technologies and increasing competition. Yahoos main competition is Google and Microsoft. The amount of rivalry of Yahoo is Google with 82% and MSN (Bing today) with 6%.On the whole, there is a huge competition between Yahoo! and Google which keeps both these companies busy and force them to innovate, introduce new products to attract users and gain market share.

2) Bargaining power of suppliers:- There is a strong risk of forward integration as many browser may not work efficiently with new Microsoft or Apple programs. These organisation can create their own search portals to prevent other search browsers from performing well. Online search engines can purchase their Pcs and system administration devices from numerous suppliers, bringing down supplier power. Search engines depends on organisation to provide advertisements and on users to view promotions so as to make benefits. Subsequently, firms must maintain firm-supplier dealer relationship to keep force of suppliers low (Clarke, C, 2011).Overall, the bargaining power of suppliers is low as there are numerous available suppliers and a low exchanging cost. Nevertheless, this is constantly traded off by forward integration as Microsoft and Apple programming can take search engines out of business.3) Bargaining power of buyers: Various web users and no exchanging cost between search engines lowers power of buyers. Web users require and demand more complex internet search and additional services to stay loyal to a organization. Since, web engines are free many firm rely on the amount of streaming to receive money from advertising companies. Higher or lower activity traffic flow implies that promotion firms will pay more or less to search engines organisation respectively. Buyers are not very powerful but rather firm cannot increase price as there are numerous online search engines accessible to web users. As a result, customers have no other choice than using search engines due to this bargaining power is automatically lowered. However, companies must keep improving their search tool, provide additional services to gain customers and achieve market share.

4) Threat of subtitles:- The risk of subtitle is low as there are no genuine subtitle for internet search engines. Possible substitutes are encyclopaedias and online reference books. However, there are not a major risk to web engine industry. It is very difficult for customers to switch choices as encyclopaedias are expensive as there may be an extra charge for libraries. However, web search engines are. As a result, this shows that there is no major threat to online industry from subtitles.5) Threats of new entry: It is very difficult for new entrants to gain market share as present contenders have huge reputation in market as it is very hard to pull customers of Yahoo! and Google. Developing markets require more refined search algorithms. There is no perfect search engine, so there is always a chance of better search engines being introduced in the business. Yahoo! and Google gives users a extra service to establish a strategic lock-in that is Google and Yahoo! gives users email and social networking which holds users to their sites. As a result, there is a very low risk of new entry as internet users are addicted to Yahoo! and Google because of their extra service. Likewise, it is very difficult for new entrants to assemble enough information and gain users attraction quickly. On the other hand, it is important to note that when Google began in 1998, Yahoo!, Altavista and Excite were the leaders and still Google manage to overcome them (Viney, D, 2007).

Discussion:-After porter forces analysis Yahoo! needs to focus on developing a competitive advantage. Since, online searching is free hence it should differentiate its products and service from search engines like google to attract users yahoo should adopt a differentiation strategy. By adopting this type of strategy Yahoos business can achieve brand loyalty and rivals may have tough time to compete. By differentiating developed core competencies and products it can discourage the potentials of new entrants in industry and rivals would not be able to meet differentiated customer needs (Quick MBA, 2007), hence it may result in growing number of customers and gaining their loyalty.

Conclusion:To sum up, as internet market is growing day-by-day it is becoming more competitive. Yahoo! is better in delivering news than any other search engine and there are very productive in gaining their users to their website. Moreover, Yahoo! should be faster and innovative to gain their customers.

References:- Clancy, C 2011, How do search engines like google make money? , http://www.netregistry.com.au/blog/how-do-search-engines-like-google-make-money/, (Accessed: 9th May 2015). Corporate Strategy Forum, 2006, Google Inc Vs Yahoo! Inc- Stratgies-Summary of Case Studies, http://corporatestrategy-forum-blogspot.com/2006/05/google-inc-vs-Yahoo!-inc-strategies.html, (Accessed 7th May 2015) Internet Centre For Management and Business Administration, Inc, 2010, QuickMBA, www.quickmba.com, (Accessed: 8th May 2015). Ramey, K 2013, What is Technology-Meaning of Technology and Its Use, www.useof technology.com/what-is-technology/, (Accessed: 5th May 2015). Viney, D 2007, Search Engine History- Web Search Before Google, http://www.seo-expect-services-co.uk/blog/posts/search/-engine-history-%11-web-search-before-google-html, (Accessed: 7th May 2015). Yahoo, 2011, Company Info- Overview, http://pressroom.Yahoo!.net/pr/ycorp/overview.asprx, (Accessed: 9th May 2015).