SWOT, Space and QSPM Matrices for Yahoo! Inc.

SWOT, SPACE and QSPM Matrices for YAHOO! Inc. Yahoo! Incorporated is a multinational internet corporation in the computer integrated system designs industry. Headquartered in Sunnyvale, California, the company was founded by Jerry Yang and David Filo in 1994 at a time they were students at Stanford University.

Initially the search engine started as a hobby for the two founders and it was referred to as 'Jerry and Yang's guide to the world wide web', after which the name was changed to Yahoo!, an abbreviation for 'Yet another Hierarchical Officious Oracle' (Yahoo! Inc., 2015). The company provides online properties and services to users and affiliates, and its major income generating activities are display and search advertising. The company's products include: communication, search, digital magazines, and video.

In communication, the main products are Yahoo Messenger, Yahoo Mail and Yahoo Groups, while search is made up of Yahoo Answers and Yahoo Search, both of which help consumers discover new information, share knowledge and navigate the internet (Yahoo! Inc., 2015). Video includes Yahoo Smart TV and Yahoo Screen, while My Yahoo, Yahoo Weather, and Yahoo Sports are some of the digital magazines. Yahoo! Inc. also operates Tumblr, which offers mobile applications and web service; and Flickr, used for sharing and storing photos.

The company's major competitors are Microsoft, Google, AOL, and Double Click Ad Exchange - and as of 2014, it reported a net income of $1,253,070,00 (in the last quarter of 2014), with an earnings per share of 0.173 (Yahoo! Inc., 2015). This text evaluates the performance of Yahoo! Inc. using three comprehensive matrices: the SWOT, SPACE and QSPM matrices.

The SWOT Analysis The SWOT analysis evaluates a company's internal business environment highlighted by its strengths and weaknesses, as well as its external environment, which is revealed by the opportunities in can exploit in the market and the threats that can affect its performance negatively (Bohm, 2009). The SWOT Matrix for Yahoo! Inc.

is as follows: Strengths S1)It is the second largest internet brand in the world S2) Revenues amounting to 1.2 billion in 2014 S3) Huge revenues from marketing S4)Has many products to offer S5) Has offices in more than 20 countries S6) Has partnerships with NSL, Visa and MLB Weaknesses W1) Lower revenues than competitors W2)Stock price is falling W3)Huge declines in advertising revenues W4)Outdone in search results by Google W5)Yearly Declines of Yahoo! Image search Opportunities O1) Falls in the price of broadband O2)Merger offers from Microsoft O3)Over 1 billion internet users globally O4) There is an increase in internet advertisement O5) A highly trafficked internet destination O6) Large number of consumers online O7) Internet business outperforms non-digital business SO Strategies SO1) Invite more companies to advertise on Yahoo! (S1,S3,O5,O6) SO2) Collaborate with social networks for more publicity and diversification (S2,S4,O5,06) SO3)Acquire small search engine companies to increase revenue (O5, O7,O2,S1,S2) SO4) Improving service marketing to increase market share (S1,S2,S3, O3,O6) WO Strategies WO1) Negotiate merger with Microsoft to improve revenues (O2,W1,W2,W4) WO2) Improved marketing strategies to increase advertising revenues (O1,O4,O6,W1, W4) WO3)Reduce service charges (O1,O5,W4,W3) WO4) Raise their public offering to gain more investors (O3,W4,W5) Threats T1) Slow economic growth in the U.S.

T2) Unstable economy affects Internet business T3)Reduced online growth T4) Competitors are too powerful T5) Numerous changes in legislation T6) Dynamic technological changes ST Strategies ST1) Increase research and development to come up with new products (T2, T3,T4,T6,SI, S2,S4 S6) ST2) Expand to third world countries (T2, S5,S6) ST3) Collaborate with smart phone manufactures to (T4,T6, S4,S6) ST4) Acquire smaller tech companies to increase market share (T4,T6, S1, S4, S6) WT Strategies WT1) Outsource some activities to concentrate more on the primary activities (T1,T2,T3,T4T6,W3,W4,W5) WT2) Consider Microsoft Merger to survive hard economic times (T1,T2,T3,T4,T6,W1,W2,W3,W4,W5) WT3) Improved marketing strategies (T3,T4,T5,T6, W1,W2,W3,W4) Yahoo! Inc.'s SWOT analysis reveals that its most predominant strength is its brand recognition.

This is particularly because it has more products, which enables it to get more revenues, establish strong partnerships and explore new territories. However, the revenues have been declining and it needs to emphasize on its strengths to be able to seize new opportunities and to deal with the imminent threats. The SPACE Matrix The Strategic Position and Action Evaluation (SPACE) matrix is used to evaluate different variables, which are given a score according to their importance in a given company (Thompson and Martin, 2010).

The internal and external environments of Yahoo! Inc. will be analyzed in four quadrants: financial strength (FS), environmental stability (ES), competitive advantage (CA), and industry strength (IS). The company will then be advised whether to follow conservative, defensive, aggressive, or competitive strategies. The SPACE Matrix for Yahoo! Inc.

is as follows Internal Strategic Position Ratings External Strategic Position Ratings Financial strength Had revenues totaling $1.2 billion in the last quarter of 2014 A current ratio of more than one at 2.14 Low asset turnover ratio at 0.12 Debt to equity ratio at 3.39 Earnings per share at 0.173 Growth ratio at 77.75 1 1 3 1 3 4 Environmental stability Internet products and services change rapidly and increase the competition High rates of inflation Increased unemployment rates Macroeconomic malaise High competition from Google -4 -3 -4 -3 -1 Total 13 Total -15 Competitive advantage Advertising services and access to internet users Product variety High traffic Offices in more than 24 countries Many visitors on yahoo site -2 -2 -1 -2 -2 Industry strength More time online by consumers Increased internet advertising in the U.S.

Lower broadband prices Legislation bars entry More than 1 billion internet users 5 4 4 3 7 Total -8 Total 23 Computations ES average is -15/5 = -5 IS average is 23/5 = 4.6 CA average is -8/5 = -1.17 FS average is 13/6 =2.17 X-axis -1.17 + 4.6 = 3.43 Y-axis -5+ 2.17 = -2.83 FS Conservative 3 Aggressive 2 1 0 CA IS -1 -2 -3-0 1-2 3 Defensive -2 Competitive -3 ES Since scores are higher in the X-axis, its competitive advantage and industry strength quadrants indicate that it should employ competitive strategies.

QSPM Matrix The quantitative strategic planning matrix (QSPM) is used for evaluating the strategies a particular company can apply. For Yahoo! Inc., some computations will be made and management techniques analyzed in order to select the best strategy objectively. The figures are classified into attractive scores (AS) and the total attractiveness scores (TAS): The QSPM matrix for Yahoo! Inc. is as follows: Major factors Weight Strategy One Strategy Two AS TAS AS TAS Strengths Brand recognition Variety of products Great online presence High revenues MLB and.