The coming of the Internet in the 20th century attracted several players who capitalized on the emerging industry. Amazon ad Yahoo pioneered some the leading e-commerce firms of the 21st century and have had to adopt various strategies and models in order to remain relevant. The distinct business strategies of each of these entities and the way the strategies resulted in comparative advantages are analyzed in this study.
Strategic Management of Amazon and Yahoo.com
The recent advancements in technology, computing, and Internet technologies have seen a rapid rise in the number of online businesses. Cases in point are the Amazon.com and Yahoo.com that took the globe by storm at the end of the 20th the century. Broadly speaking, e-commerce has become one of the most lucrative platforms to conduct businesses (Nabi, & Luthria, 2002). In this paper, two relating Amazon and Yahoo are reviewed. First, I seek to find out the source of Amazons success as a leading online retailer in 2011. The study will also establish whether Yahoo's business model functionally geared for success during the same year. In addition, the distinct business strategies of each of these entities and the way the strategies resulted in comparative advantages are also analyzed.
Amazon.com, the world's largest online retailer, is an American company that was established in 1995 by Jeff Bezos. The headquarters are in Washington DC. Having started as a book selling business, the company has grown exponentially over the last 17 years to incorporate several other products. These products include music, DVDs, video games, toys, software, and video among many other home improvements goods. As at the moment, this company boasts of customer base of 22.5 million across 150 different countries all over the world. On the other hand, Yahoo.com is a multinational Internet corporation based in Sunnyvale, California. It was set up by Jerry Yang and David Filo, who are both electrical engineering graduates from Stanford, in 1994 (Canzer, 2006). The corporation is largely known for its Web portal and search engine known as Yahoo Search. In addition, it offers several other related services such as Yahoo Directory, Yahoo Answers, Yahoo Mail, Advertising, Finance, and Yahoo News. Recently, Yahoo also ventured into social media services (Nabi, & Luthria, 2002).
Amazon strategic organization entailed a combination of informational elements such as a virtual storefront with physical elements (operations). Though Amazon has heavily ventured in information and technology, with strategic focus on software instead of hardware, its operations by that time were mostly limited to packing and shipping. The management key propositions for customers buying their products over the Internet include convenience, wide selection, fair prices, and enhanced customer service (Kasabov & Warlow, 2012). Its web store has always remained operational 24/7 and offers additional services, for instance book recommendations and reviews. Amazon has expanded its database and fortified it such that customers can use database such functionality to locate the out-of-print titles. This has been made possible by different search criteria employed. Furthermore, in Amazon's website, stock availability is clearly displayed for every product and, for those products yet to be released, customers are allowed to pre-order so that shipment can be made upon availability (Hitt, Hoskisson & Ireland, (2013).
Another strategic management technique employed by Amazon is "one-on-one" customer relations. In other words, Amazon puts "each customer at the centre of her own universe." Jeffrey Bezos, company's CEO, sums up company's personalization effort by submitting that: "if we have seventeen million customers, we should have seventeen million stores." One-2-one relationship has further been applied to the company's marketing strategy. From Amazon's web page, someone may notice that further recommendations of other products based on your previous purchases are made after a purchase has been made from the site. In addition, further recommendation of additional products based on other consumer who bought similar products to the one currently purchased are displayed (Nabi, & Luthria, 2002).
Concerning Yahoo Inc., it changed its mission statement from being just a "search portal" to "to focus on connecting people with their passion, communities, and world's knowledge." Essentially, Yahoo's mission statement points to the fact that the company targets to attain two key objectives. First is to offer digital touch to customers so that they keep on doing what they do like most in the web and to provide a unique way of advertisers to connect with potential consumers (Kasabov & Warlow, 2012).
Yahoo business model at its inception was largely based on its web portal and search engine. However, as the competition intensified, especially from other players such as Google (Gmail), the corporation adopted business strategy that is based on diversification. Besides the search engine and Yahoo Mail, the company has launched several other innovative services including Yahoo Directory, Yahoo Answers, Advertising, Finance, and Yahoo News. As it may be argued, this strategy has kept Yahoo competitive in the market despite the cutthroat competition from Google. In yet another strategic move, the company concentrated on building customer loyalty through enhanced relations and establishing social communities. Yahoo devised a special way of remembering customer's special dates like birthdays in their database and notifying them through e-mails (Hill & Jones, 2012).
Based on 2011 case studies, Amazon and Yahoo are considered relatively as successful businesses in e-commerce. Their success is largely attributed to a number of key competencies that each of them possess. For instance, both of them have heavily invested in the software industries. This implies that they are not only dealers in software products but also developers. These competencies have given them strategic advantages such that they have superior website platforms to conduct their businesses. For instance, Yahoo Web Portal is one of the most commonly utilized sites all over the world. Similarly, Amazon has developed its own search engine that is gaining prominence exponentially (Nabi, & Luthria, 2002).
The superiority of these platforms is what is increasingly giving these entities comparative advantage. However, it is worth noting that competitors are also on the watch out. A case in point is recent rise of Google. Google is a light web search platform that has found application even in inferior gadgets. This has made it widely used even in developing world where inferior Internet enabled gadgets are popular. Similarly, for Amazon.com and Yahoo.com to retain their competitive edge, it is necessary for them to capitalize on strategies that would ensure that their services are widely available to a wider market (Kasabov & Warlow, 2012).
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