Yahoo is one of the most respected IT companies. However, the organization is currently experiencing a decline in profits, a situation attributed to fierce competition from more established players such as Google and Facebook which all acquire significant portions of their revenues from advertisements. It is in light of this fact that I propose an aggressive strategic plan that fosters growth, increase the revenue base and also enhance efficiency in the company’s operations. Some of the proposed strategic plan to foster growth for yahoo includes:
Strengthening and Growing User Engagement
In 2016, the company’s monthly active user base stood at a billion customers, which is a good figure to convert into profits. However, converting the wide and geographically dispersed user base into profit is what is making the operations of the company difficult. To begin with, the company should prioritize on growing engagement of its enormous user base. The company should find a way to simplify its diverse product portfolio by distinguishing products that describe the company competitively. It is only through identification of mainstream products that the company will find it possible to restructure loss making units while revamping the already profitable segments. Besides, Yahoo should also upscale its pace of innovation including heralding an integrated company experience for the employees by facilitating metrics such as logged in users and page views. It is through the acquisition of such information that Yahoo can analyze information. Through the use of robust analytical tools the company acquires insightful information pertaining to marketing, sales, and other important aspects such as average revenue per customer (Kumar et al., 2016).
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Simplification of Business to Enhance Execution
Previously the company has channeled resources in several product segments to propel innovation and growth. It is now prudent for the organization to begin aligning resources towards proven and tested areas. For instance, the company should consolidate its online magazines portfolio into a single product. Besides, the company should abolish non-profit making legacy products such as Smart TV broadcasts and online video games. Instead, the organization should shift its allegiance towards simpler product portfolio focusing on company’s strength such as enhanced mobile user experiences (Akter et al., 2016).
Non-Strategic portfolio such as non-strategic patents including other non-core operations such as real estate business should be disposed. The money acquired from disposal of these assets can be channeled to other profitable and high potential business units such as search and advertisements (Ajagbe, 2016).
Efficiently Aligning of Resources
One of the principal goals of the company is to spend prudently, operate effectively, and generate returns to shareholders. However, for such a plan to materialize, the organization should execute several cost-saving initiatives. The organization should ensure that key business unit’s functions do not overlap. For instance, the company’s head of marketing must have clear roles and job responsibility. The person on charge of the company’s marketing effort must formulate clear policy that guides the company operations in any region, while the regional marketing managers should implement organization specific policies in relation to individual countries.
Besides, the company should also find a way of reducing its headcount especially in non-strategic regions. Reduction of the workforce number is likely to result into short-term savings in operating expenses (Stevens, Xie, Peng, 2016).
Courtesy of the three-point plan, the company is expected to shift back to increased growth. Through initiating the above steps the company will swiftly realize a positive impact on the trajectory of its corporate transformation.
References
Ajagbe, A. M., Inelo, F., Udo, E. E., UDUIMOH, A. A., & AKPAN, S. E. (2016). Business Strategy as a Contributor to Organizational Performance. International Journal of Advanced Academic Research , 2 (3), 1-19.
Akter, S., Wamba, S. F., Gunasekaran, A., Dubey, R., & Childe, S. J. (2016). How to improve firm performance using big data analytics capability and business strategy alignment?. International Journal of Production Economics , 182 , 113-131.
Kumar, J., Au, I., Stewart, M., Lefelt, T., & Dill, K. (2016, May). Design Leadership for Business Innovation. In Proceedings of the 2016 CHI Conference Extended Abstracts on Human Factors in Computing Systems (pp. 1043-1046). ACM.
Stevens, C. E., Xie, E., & Peng, M. W. (2016). Toward a legitimacy‐based view of political risk: The case of Google and Yahoo in China. Strategic Management Journal , 37 (5), 945-963.
