Business Strategy Essay Example | Topics and Well Written Essays - 2000 words

Business Strategy - Essay Example Yahoo was founded by Jerry Yang and David Filo in 1994, mainly as a website which featured a directory of other websites. From that beginning, it spread its operations extensively, making strong presence in certain segments, but still lay behind Google in majority of the segments, as well as in relation to market share and revenue. Actually, in 2000, Yahoo and Google had a working association, with Yahoo using Google for search results. However that was short-lived, and both the companies parted ways and importantly started competing against each other in various segments. Porter’s ‘five forces framework’ Threat of Entrants Any industrial sector will have threat from new entrants, and dot.com sector will be no exception. Actually, the dot.com sector, used to denote the companies that mainly do their operations over the internet with a website and a domain ending with .com, got originated due to the entry of new entrants particularly in Silicon Valley. This being t he case, there will be a constant threat of new entrants in this sector. New entrants are always attracted to industry sectors that are flourishing and that seem to offer the potential for healthy profits, dot.com industry fits that bill aptly. (â€Å"Consulting Tools†). They are targeting various segments in the dot.com industry from emails, video sharing and hosting, etc., Although, Google and Yahoo have consolidated their positions in these segments and hold larger market share, these new entrants by giving widespread services are minor threats. Threat of Substitutes The threat of substitutes will be found more in the dot.com industrial sector, because the lines of control and authority are blurred in the virtual world. With no worldwide authority to detect and stop copyrights infringement and other violation of trademark services, substitutes can come with similar services or slightly modified services, negatively impacting pioneers like Google and Yahoo. However, the fac t is, these two companies were also accused of coming up with substituting services, violating the rights of other players, but that were only minimal. With Internet coverage increasing, the competition for online business also increases, and using this opportunity many players are coming up with substitute services. For example, Google’s Iphone has been substituted by other local mobile phone makers, likewise Youtube has many substitutes like Dailymotion, Yahoomail has been substituted by many pan-national as well as local players. â€Å"The Internet creates new substitution threats by enabling new approaches to meeting customer needs and performing business functions† (Shin). Power of Suppliers In the dot.com industry, quite uniquely, the supplier of product or services as well as user or customer of service will be maximally one and the same. That is, most of the products or services offered by the companies, like websites in search engine results, videos in Youtube , Google Adsense feature, etc., are not created ‘in-house’, instead they are sourced from the suppliers outside. Those same suppliers along with sizable common people will also utilize those services as customers. Thus, the companies by aptly hosting or collecting or arranging those things and even