Yahoo: Relationship Crisis with Alibaba in China Description
In October 2005, Yahoo! Inc. ("Yahoo") formed a partnership with Alibaba Group Holding Limited ("Alibaba"), the country's biggest e-commerce firm. The company invested US$1 billion in Alibaba for a 40% stake and transferred the ownership of Yahoo! China ("Yahoo China") to Alibaba. However, some media outlets have described the two companies' relationship since 2005 as being anywhere from rocky to downright ugly. Yahoo's decision in mid-2009 to switch to Microsoft's Bing search technology has prompted Alibaba to adopt a search engine from Yahoo's local competitor Sohu.com. Then Alibaba collaborates with eBay Inc. instead of Yahoo in entering the US business-to-business market. Meanwhile, Yahoo directly competes with Yahoo! China for advertisers by soliciting companies in southern China to advertise on Yahoo's Hong Kong website. Alibaba has been taking a loss in its operations since 2006, and the search revenue share of Yahoo! China has dropped from 27% in 2005 to an insignificant level in 2010. But Yahoo! has turned down Alibaba's offer to buy back its stake because it would like to wait for the IPOs of Alibaba's two major subsidiaries before any exit. In light of growing tension with Alibaba, Yahoo's board would like to review its approach to managing this partnership and figure out what should be done to mend the ties.
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Case Analysis of Yahoo: Relationship Crisis with Alibaba in China
Yahoo: Relationship Crisis with Alibaba in China is a Harvard Business (HBR) Case Study on Communication , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Yahoo: Relationship Crisis with Alibaba in China is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Yahoo: Relationship Crisis with Alibaba in China case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Yahoo: Relationship Crisis with Alibaba in China will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.
Case Study Solutions Background Work
Yahoo: Relationship Crisis with Alibaba in China
case study solution
is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Communication, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Yahoo: Relationship Crisis with Alibaba in China, is to not only build a competitive position of the organization but also to sustain it over a period of time.
Strategic Management Tools Used in Case Study Solution
The Yahoo: Relationship Crisis with Alibaba in China case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.
Texas Business School Approach to Communication Solutions
In the Texas Business School, Yahoo: Relationship Crisis with Alibaba in China case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.
We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Yahoo: Relationship Crisis with Alibaba in China
Step 1 – Problem Identification of Yahoo: Relationship Crisis with Alibaba in China - Harvard Business School Case Study
The first step to solve HBR Yahoo: Relationship Crisis with Alibaba in China case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Yahoo Alibaba is facing right now. Even though the problem statement is essentially – “Communication” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Yahoo Alibaba, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.
Step 2 – External Environment Analysis
Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Yahoo: Relationship Crisis with Alibaba in China.
The external environment analysis of Yahoo: Relationship Crisis with Alibaba in China will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.
What is PESTEL Analysis? Briefly Explained
PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Yahoo: Relationship Crisis with Alibaba in China case study. PESTEL analysis of " Yahoo: Relationship Crisis with Alibaba in China" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.
How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?
As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Yahoo: Relationship Crisis with Alibaba in China macro-environment and how it impacts the businesses of the firm.
How to do PESTEL Analysis for Yahoo: Relationship Crisis with Alibaba in China
To do comprehensive PESTEL analysis of case study – Yahoo: Relationship Crisis with Alibaba in China , we have researched numerous components under the six factors of PESTEL analysis.
Political Factors that Impact Yahoo: Relationship Crisis with Alibaba in China
Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.
Policy Making Impact on Yahoo: Relationship Crisis with Alibaba in China
Government policies have significant impact on the business environment of any country. The firm in “ Yahoo: Relationship Crisis with Alibaba in China ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.
Data safety laws – The countries in which Yahoo Alibaba is operating, firms are required to store customer data within the premises of the country. Yahoo Alibaba needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.
Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Yahoo: Relationship Crisis with Alibaba in China has numerous instances where the competition regulations aspects can be scrutinized.
Import restrictions on products – Before entering the new market, Yahoo Alibaba in case study Yahoo: Relationship Crisis with Alibaba in China" should look into the import restrictions that may be present in the prospective market.
Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Yahoo Alibaba in case study “ Yahoo: Relationship Crisis with Alibaba in China ” should look into these export restrictions policies.
Foreign Direct Investment Policies – Government policies favors local companies over international policies, Yahoo Alibaba in case study “ Yahoo: Relationship Crisis with Alibaba in China ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.
Taxation & Regulation Impact on Yahoo: Relationship Crisis with Alibaba in China
Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.
Tariffs – Chekout how much tariffs the firm needs to pay in the “ Yahoo: Relationship Crisis with Alibaba in China ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Yahoo Alibaba can compete against other competitors.
Government Scheme & Subsidies Impact on Yahoo: Relationship Crisis with Alibaba in China
Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Yahoo: Relationship Crisis with Alibaba in China case study have to assess whether their business can benefit from such government assistance and subsidies.
Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.
Political System & Stability, and its Impact on Yahoo: Relationship Crisis with Alibaba in China
Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.
Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.
Corruption level – Yahoo Alibaba needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.
Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.
Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.
Economic Factors that Impact Yahoo: Relationship Crisis with Alibaba in China
Social Factors that Impact Yahoo: Relationship Crisis with Alibaba in China
Technological Factors that Impact Yahoo: Relationship Crisis with Alibaba in China
Environmental Factors that Impact Yahoo: Relationship Crisis with Alibaba in China
Legal Factors that Impact Yahoo: Relationship Crisis with Alibaba in China
Step 3 – Industry Specific Analysis
What is Porter Five Forces Analysis
PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Yahoo: Relationship Crisis with Alibaba in China case study. PESTEL analysis of " Yahoo: Relationship Crisis with Alibaba in China" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.
Amanda is strategy expert at Texas Business School. She is passionate about corporate strategy, competitive strategy, game theory, and business model innovation. You can hire Texas Business School professinoals to revolutionize your strategy & business.
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