Strategy and Governance at Yahoo Inc. Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Overview of the Company

Yahoo search engine was developed by two students, Jerry Yang and David Filo, who studied in Stanford University. At the initial stage, Yahoo was only used to be in contact with relatives and friends, as the time passes Yahoo introduced its search engine which played a major role in increasing the company’s strength. Afterwards it did not stayed within the walls of campus and the two owners decided to expand Yahoo publically.. As it launched in public it was free of cost.. Further, they started to put ads on their website to boost their revenue. The objective of the company was to develop a friendly user environment and the fastest search engine on the internet with refining the capabilities to make searching more exact and filtered for the users.. The Yahoo was legally established in the year 1998 with obtaining the ownership. Through the new divine concept Yahoo improved internet searching trend which helped many companies to provide large information to their stakeholders. Currently, the mission of the company is to provide the world with a single platform for gaining access to their desired information which will make it easy and eventually become essential for their users. Yahoo is even providing news for their users, which will help the users to be well aware regarding the hot topics around the world. It is now providing users with their bank data so it can become a multipurpose website.

The vision of the Yahoo incorporation is to ensure the current information of the people who will become the market leader in the future. These information will guide them according to their standards and their believe in the world`s culture and norms. This is basic information about the company, from where they started and now where want go in the future.

Problem Statement

The main problem faced by the company is lowering the price of the stock as mentioned in the letter of the Daniel Loeb. The price offered in the market is about $15 and investor does not know the actual worth of the company. The assessment that Daniel shows in his letter that the company’s worth is lower which is making the investors confused to buy the stocks or not.. To solve this problem, Yahoo uses the discounted cash flow techniques with evaluating the enterprise value with effect on the per share value. This technique resolves through certain assumptions which are necessary for solving the problems. These assumptions are based on the practical knowledge and current economic situation of the country.

Competitive Strategy

Yahoo incorporation has the competitive edge on its competitors through their strategy and their competent product in the market, which is well known by the user of the internet. Currently, Yahoo Incorporation has been following competitive advantage which is the part of its competitive strategy. These strategies relates to the position of the case in the year 2010:

Recent Partnership with Samsung Phone mobile company
Giving Response to Properties Dealer through Yahoo
Planning New Website which known as “who Knew”
Microsoft Search Deal that allows the Yahoo for the cloud space.
News Editorial sections which are excellent approach
Building of the Mobile Apps such like Flickr, Games, Food and Finance etc.
The Yahoo entertainment portion which is the best sections
Acquired Koprol by Yahoo incorporation which help in mobile strategy

These are competing strategies of Yahoo Incorporation which helps to build a strong logo of the company. The users of Yahoo feels free to use their web portal for each and every issue. Even after all the above advantages Yahoo would fail the agreement with Microsoft which was mentioned by Daniel Loeb in his letter..

Analysis

The analysis was done with respect to the given assumptions in the case material. In the analysis, it uses the discounted cash flow approach for evaluating it’s enterprise per share value by determining that the investor should buy stock on $15 or not. The analysis shows that the enterprise per share value is $15 which is less than what the market is offering. But in this the internal value is less than external which is quiet not satisfactory for the valuation. The investor should not purchase the shares because its values show the down position and the market showing the fake price which would decline soon as the market moves. The analysis is done with respect to certain assumptions which are, revenue will be growing from the minus three to one percent by 2011 to 2016. Further the EBIT has, followed by twenty one percent to twenty seven percent by 2011 to 2016. The earnings after tax is also calculated from 13.6% to 17.5% with respect to the same years......................

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Yahoo! faces a number of management and strategic objectives at the end of 2011 as it tries to compete with rivals such as Google and find ways to monetize their share and business links with Alibaba Group in China and Yahoo! Japan. The company is now valued at almost half the proposals that Microsoft has made in his bid in 2008. The depth of the problems underlined by frequent changes in CEO was, culminating in the recent shooting of the last general manager Carol Bartz. The case examines the successes and failures in Yahoo! and solutions now before the board, as he faces investor pressure to improve performance. "Hide
by Krishna G. Palepu, Suraj Srinivasan, David Lane, Ian McKown Cornell Source: Harvard Business School 33 pages. Publication Date: October 31, 2011. Prod. #: 112040-PDF-ENG