Yahoo And Amazon Building A Competitive Advantage
Yahoo And Amazon Building A Competitive Advantagedue In
Review Case 21 “How Amazon.com became the leading online retailer by 2011,” and Case 23 “Is Yahoo!’s business model working in 2011?” located in the textbook to complete this assignment. Write a six to eight (6-8) page paper in which you: Describe, in brief, the histories of both Amazon.com and Yahoo.com, and determine the core business of each. Determine the key strategic differences that have impacted the relative success of both Amazon.com and Yahoo.com. Provide two (2) specific examples of such strategic differences to support the response. Compare and contrast the approach to strategic planning that each company has pursued in order to achieve a competitive advantage. Focus specifically on both intended and emergent strategies. Analyze the manner in which each company’s distinctive competencies help to shape the strategies that each company pursues. Provide a rationale to support the response. Recommend one (1) functional level strategy for each company which prescribes the essential ways in which each may achieve superior efficiency, quality, innovation, and customer responsiveness. Provide a rationale to support the response. Use at least three (3) quality references. Note: Wikipedia and other Websites do not qualify as academic resources. Your assignment must follow these formatting requirements: Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions. Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
Paper For Above instruction
Introduction
The rapid evolution of the internet has profoundly transformed the landscape of commerce, giving rise to giants like Amazon and Yahoo that pioneered different pathways towards capturing online market share. Despite their shared digital presence, these two companies have displayed distinct strategic orientations, core competencies, and business models that have contributed to their respective successes and challenges. This paper examines the histories of Amazon and Yahoo, compares their core business models, explores strategic differences, analyzes planning approaches and distinctive competencies, and recommends specific functional strategies to foster sustained competitive advantages.
Historical Overview and Core Business
Amazon.com was founded by Jeff Bezos in 1994 as an online bookstore, leveraging the burgeoning internet to establish an innovative e-commerce platform. Its commitment to customer-centricity, vast product selection, and logistics excellence soon propelled Amazon to dominate multiple retail sectors, evolving into a comprehensive online marketplace (Stone, 2013). Conversely, Yahoo was established in 1994 as a web directory and search engine, quickly developing into a comprehensive internet portal offering news, email, and advertising services. While Yahoo's initial success was rooted in its portal strategy, over time, it faced challenges adapting to the rapidly changing digital landscape (Liu, 2010).
Key Strategic Differences and Their Impact
One fundamental strategic difference between Amazon and Yahoo lies in their business focus: Amazon primarily pursued an e-commerce and supply chain integration strategy aimed at customer satisfaction and operational efficiency. In contrast, Yahoo initially relied heavily on advertising revenue derived from its portal services, with a focus on content provision and user engagement. Second, Amazon’s strategic emphasis on supply chain innovation and technological infrastructure allowed it to scale effectively and reduce costs, whereas Yahoo’s strategy was more centered on content and advertising, which became vulnerable as online advertising matured and dominant players like Google emerged (Huang & Rust, 2021).
Approaches to Strategic Planning and Competencies
Amazon employed a combination of intended and emergent strategies. Its intended strategy was to create a vast online store, but emergent strategies, such as expanding into cloud computing with Amazon Web Services (AWS), introduced new revenue streams and competitive advantages. Amazon’s core competencies in logistics, technology infrastructure, and customer data analysis have shaped its strategic agility (Johnson et al., 2020). Conversely, Yahoo’s approach originally was largely intended, focusing on becoming the premier internet portal. Over time, it exhibited less strategic flexibility, often reacting to competitors’ innovations. Yahoo’s core competencies included content curation and brand recognition, but its limited technological innovation hampered sustainable growth (Lin & Chiu, 2022).
Functional Level Strategies and Recommendations
For Amazon, a recommended functional strategy is investing further in technological innovation within its logistics and artificial intelligence capabilities—aimed at enhancing delivery efficiency and personalized customer experiences. Doing so would support superior efficiency and customer responsiveness, aligning with its core competencies (Kumar & Reinartz, 2016). Meanwhile, Yahoo should focus on developing a more customer-centric content personalization strategy, leveraging data analytics and engagement tools to improve content relevance and user retention, thus fostering better quality and customer responsiveness (Pera & Viglia, 2019). Both strategies harness their distinctive competencies and address current market challenges.
Conclusion
In summary, Amazon and Yahoo exemplify contrasting strategic paths shaped by their unique histories, core businesses, and competencies. Amazon’s focus on e-commerce, logistics, and technological innovation has secured its competitive advantage in retail and cloud services. Yahoo’s emphasis on portal content and advertising strategies faced limitations amid evolving digital dynamics. Future success for both companies hinges on leveraging their core competencies through innovative and customer-oriented functional strategies to sustain their market positions.
References
- Huang, M.-H., & Rust, R. T. (2021). Engaged to a Robot? The Role of AI in Service. Journal of Service Research, 24(1), 30–41.
- Johnson, M., Scholes, K., & Whittington, R. (2020). Exploring Corporate Strategy. Pearson.
- Kumar, V., & Reinartz, W. (2016). Creating Enduring Customer Value. Journal of Marketing, 80(6), 36–68.
- Lin, C., & Chiu, S. (2022). Evolution of Digital Media: The Case Study of Yahoo. Internet Research, 32(2), 545–560.
- Liu, R. (2010). The Rise and Fall of Yahoo! Inc. Journal of Internet Business, 7(3), 2–15.
- Pera, R., & Viglia, G. (2019). From Personalization to Contextualization. Journal of Business Research, 104, 379–386.
- Stone, B. (2013). The Everything Store: Jeff Bezos and the Age of Amazon. Little, Brown and Company.