Factors Affecting Yahoo's Performance

Introduction

Yahoo was incorporated in 1995; its business activity was mainly based on online advertising, promotions, direct marketing, sponsorships and merchandising (Terry, 2006). However, overtime, Yahoo has fallen behind its competitors who generate more revenue than itself due to changes that occurred within its organizational structure. For instance, the complexity in its organizational structure and poor decision making processes. Due to such factors Google who is Yahoo’s foremost competitor, raises twice as much revenue due to better decision making and flexible organizational structures.

External Factors Affecting Yahoo’s Performance

External factors are those factors that cannot be controlled by an organization. In the late 2000, Yahoo’s performance started declining and it was opined that the company had fallen because it couldn’t adapt to dynamic changes that were prevalent in the business environment. Rivalries between the organization and its competitors also made its revenues to drop sharply.

Economy is one of the external factors that affected yahoo’s performances. This was brought about by market fluctuations based on the value of the currency, recession and inflation (Robert, 2006). The, economy of a country is paramount relating to commercial activities that need to take place. This determines the levels of demand and supply which greatly affect the purchasing power of customers. Therefore the same way economy affects all businesses, Yahoo was greatly affected by this and its revenue dropped. Though it is not easy to control a country’s economy, best way would be to improvise commercial activities when altercations occur to avoid losses and bankruptcy.

Trend is another external factor that affected commerci...

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...aintaining customers is a heavy duty that cuts across all integrated functions related to advertising and customer satisfaction. A business should be willing to face the harsh environment of the global economy, competition, technological trends and rivalry in order to survive the tactics and dynamics of the current business environment. Structures to satisfy and retain customers are also essential as it dictates the level of revenue of the company and the capacity of it to own and retain customers nationally and internationally.

Yahoo has to realize the need to come back to the market and face its ‘giants’ through implementation of things like restructuring the organization. This has to be counted as important because for any organization to kick start its activities the right personnel with the right skills and abilities are a must for the survival of the company.