PHILIPPINE CHRISTIAN UNIVERSITY

GRADUATE SCHOOL
STRATEGIC MANAGEMENT
Group 4 (Homer Deo Datu Estavillo, Rowena Miranda, Maricar Telan)
6. Quantitative Strategic Planning Matrix (QSPM) - The Best ACA
Strategy 1/Alternative Courses of Action 1: Partner with other internet
based businesses to diversify product offerings and strengthen stake
in the competition (Horizontal growth strategy Microsoft, Wikipedia,
FB).
Strategy 2/Alternative Courses of Action 2: Increase affiliate sites and
fees based segments by 40% to increase revenue (Vertical Integration
growth strategy blog sites, GIS web map, Education hosting, etc.).
Key Factors
OPPORTUNITIES
Broadband prices falls and population of
internet users worldwide are growing
(1.1B Internet users around the world and
211M in the US as of 2006)

Weig
ht

Strat. 1
Rati Weig
ng
ht

Strat 2
Rati Weig
ng
ht

0.1

0.4

0.4

Consumers are spending more of their

time online

0.1

0.4

0.4

Internet advertising continues to grow;

many businesses overseas are finding
advertising on Internet less expensive and
more responsive (US advertising revenue
tops $23 billion in 2008; countries such as
China and India have stronger economic
status and accordingly, the companies are
able to spend more advertising dollars via
Internet)

0.1

0.3

0.4

Microsoft has interest Yahoo (in acquiring

the search engine only )
New business strategies such as bundling
Internet access with voice and video
services are increasing

0.1

0.4

0.3

0.05

0.15

0.1

0.1

0.4

0.3

0.1

0.3

0.4

Innovativeness in technology is the driving

force in Internet-based businesses
THREATS
Economic growth in the US and worldwide
has slowed amidst crisis in 2009 (prices of
basic commodities had gone high while
personal assets have fallen and
unemployment is increasing)

Due to economic conditions, internet

based content and advertising businesses
suffered financial downturn (deceleration
of online spending)
Low entry barrier makes the viability of
existing Internet based businesses difficult

0.1

0.3

0.1

0.05

0.2

0.05

Changes in legislative requirements

concerning technology sharing, patent
rights and information security could
increase future expenses and lower
profitability

0.05

0.05

0.05

Rapid changes in technology causes its

difficulty to be up-to-date all the time

0.05

0.2

0.1

Converging technologies & consolidations

among Internet-based providers/ could
make the competition to be stronger

0.1

0.4

0.4

TOTAL
STRENGTHS
Yahoo! is the second leading global
Internet brand (unique visitors and %
reach, almost similar to primary
competitor, Google)

1.0
0.1

0.4

0.4

Yahoo! owns and operates online

properties & services, and offers Internet
access through third-party entities

0.1

0.4

0.4

Yahoo generates additional revenues on

advertising and marketing services and by
charging fees for a range of premium
services

0.1

0.2

0.4

Within Internet base service, Yahoo! has

several revenue generated segments such
as Search, Display Related, Classified,
Referrals / Lead Generation and Email.

0.1

0.3

0.4

Due to restructuring/ additional lay-offs,

the company anticipating to have a better
profitability for the next few years

0.05

0.15

0.05

Yahoo! increase in revenue from 2007 to

2008 by 3.4 percent to $7.2 Billion

0.1

0.4

0.4

Companys quick ratio is 2.54, above

industry average

0.1

0.4

0.4

0.08

0.08

0.08

WEAKNESSES
The net income decreased by 35.7 percent

3.5

3.0

to $424 million.
Overall advertising revenue dropped by 13
percent in the 2nd quarter of 2009 and
revenues on affiliate sites decreased by
6% compare to the previous year

0.1

0.1

0.4

Yahoo! closed several of its video

properties and is planning to close twenty
video services including its social network
site Yahoo! 360 and its Web hosting
service GeoCities

0.1

0.4

0.1

Yahoo!s capital lease and other long-term

liabilities increased by about 5M

0.07

0.28

0.07

TOTAL
SUM TOTAL

V.

1.0

3.11

RECOMMENDATION

It is recommended that Yahoo! partner with other internet based

businesses to diversify product offerings and strengthen stake in the
competition (Horizontal growth strategy with Microsoft, Wikipedia, FB).
1. Actions Plans
Functional
areas
Marketing

Production

Objective

Strategy

To increase
brand equity
& market
share

Publicized
partnerships
with Microsoft,
etc.; Highlights
new features
and additional
product/services
of Yahoo! &
Partners
Identify new
revenue
segments
resulting from
the
partnerships,
and create new
products from
synergistic
effect of
partnerships

To increase
product
diversity

Time
Frame
2 months

Budget
2M

6 months

20M

3.1

Organization

Finance

HRD

Information
System

To organize
partnerships
and
determine
service
levels and
KPIs

Clarify
boundaries in
the Partnership
Contract; Create
a new
organization
chart; Adjust
mission and
objectives;
Communicate
contract
content, service
level
agreements and
KPIs to all
parties;
To delineate Implement
boundaries
financial aspect
of shared
of the
expenditures partnership
and profit;
contract,
Capitalize on allocate budget
the
to priority
partnership
projects and
to increase
monitor
profitability
profitability
To maximize Create a
human
consolidated
capital
manpower plan
in coherence
with expertise
required for
product
diversification;
link KPIs success
with reward
system
To organize
Create a
information
consolidated
and create a information
means to
systems and
ease
dashboard that
retrieval for
will show
monitoring
performance of
and
various
evaluation
products,
purposes
ventures and
resources as
basis for
evaluation/
refinement/strat
egic decisions

2 months

2M

1 month

3 months

1M

3 months

1.5M

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