Final exam paper Essay Example | Topics and Well Written Essays - 1250 words

Final exam paper - Essay Example These different forces include the power of customers, the threat of new entrants into the industry, the power of supplier agents, competitive rivalry and the threat of substitute products (Gamble & Thompson, 2011). This paper will explore the competitive environment of Yahoo, in a structured and clear manner, towards exposing the ways that the company uses IT to counter competitive forces and to cultivate their advantage. The threat of new entrants The threat of entry does not affect the competitiveness of Yahoo, due to the following facts. Considering the fact that a new entrant would need to invest millions of dollars, towards developing a site to compare to Yahoo, yahoo have used the popularity of their internet platform as a mechanism of keeping new entrants out of the industry (Gamble & Thompson, 2011). Further, the Yahoo Company has taken advantage of the fact that it takes many years to build a company that will attract millions of internet users; the company has worked hard to sustain its customer-base and to recruit more over the internet platform, which makes it difficult for new entrants. The company has used IT to create economies of scale, including that, like their main competitors, including Google and Altavista; it has setup numerous servers across the world, which helps it collect information on user habits. The wide network allows the company to offer innovative, unified and customized products, in a better and faster manner, which blocks the entry of new industry players. Brand loyalty is among the premises used by the company to eliminate the threat of new entrants, including that in the area of email communication, the company is the second best service provider, with more than 273.1 million users. Through the wide IT outreach, the company has eliminated the threats of new entrants, by ensuring that the costs of developing a new web-portal and recruiting the customers of Yahoo would time and resource consuming (Gamble & Thompson, 2011). Th e power of customers The bargaining power of the customers of the Yahoo Company is high, which is evident from a number of facts. These factors include the availability of substitute search engines in the market. In countering this threat to the business of the company, Yahoo has introduced highly interactive customer services that create an experience to keep their customers with their company (Gamble & Thompson, 2011). One example of these innovative services offered over the IT platform, with the aim of keeping its customers include that the company offers chat-services over its mail platform, it offers highly non-alterable security for e-mail users and also offers news alerts to its customers (Yahoo, 2013). Therefore, unlike other industry players, the company can keep its customer and attract more, by improving the outlook of their services, towards increase the confidence of their customers in the company (Yahoo, 2013). The threat of Substitutes The threat of substitute produc t