Political Factors
There are some factors over which a business entity has little to no control, political factors being one of those factors. The technology industry in which the internet information providers are operating is exposed to the threat from the external environment in the form of political turmoil and social conflict. Yahoo! Inc. is one such organization whose profitability and operations can be greatly affected if the political turmoil occurs in any part of the world (Yahoo! Inc., 2014).
The governments can become unstable due to geo-political issues which can have a direct impact on the operations and sales of the organization in those regions. The government policies that effect the functioning of the internet information providers further comprises the political factors that hold importance for Yahoo! Inc. for instance, the government in some countries may put restrictions on content displayed by internet information providers.
Economic Factors
Economic downturn has negative effect on the sales and revenue generated by organizations operating in the technology sector, using internet as the primary domain of accessing the target market. The case of Yahoo! Inc. demonstrates that the economic disturbance changes the way company manages the process of its software development and the choices it makes pertaining to using in-house sources or seeking support from external entities for developing the software. Economic issues at a nation-wide level can make the company seek software development solutions that have a lower cost (Yahoo! Inc., 2014).
Economic uncertainty effects the functioning of a technology based organization in a general context as well, as depicted through the decline in sales and revenue. From the time of economic crisis, Yahoo! Inc. has not been able to attain any significant rise in the ratio of company revenue. The weak financial performance has led to the speculation of sales of the company stock of Alibaba (Kuchler & Waters, 2015). This situation shows that financial stability of a country not only has short term effect on the growth of an organization but can also influence the business in the long run as well.
The customers of an organization alter their buying behavior in response to the economic downturn. In case of Yahoo! Inc. the sale of premium products offered by the company can be negatively affected due to reduction in disposable income of the people, which in turn causes a decline in the ratio of customers purchasing premium products from the company (Yahoo! Inc., 2014). The revenue generated by Yahoo! Inc. is heavily dependent on the advertising and a reduction in the number of people using its platform for advertisement due to economic crisis reduces the revenue of the organization.
Social Factors
In terms of social factors, the rise of internet and information providers companies such as Yahoo! Inc. have flourished due to the increased focus of the people towards the consumption of these services. The shift towards technology and internet based communication and information collection provides an appealing means of revenue and business growth for companies providing different products, while maintaining a significant market position.
Moreover, some of the consumers have developed a preference for online shopping, providing the organizations such as Yahoo! Inc. with a useful means of increasing their range of products and target market reach (Yahoo! Inc., 2014).
Another social trend that supports the company is the increased usage of different apps by various users providing the company with an opportunity that can be successfully exploited to gain a stronger position in the market. The content displayed by the company on its website is organized and designed, keeping the taste and preference of the users as the central point. Failure to recognize the quality and nature of content the consumers are seeking can result in loss for the organization.
Technological Factors
There are different technological factors that seem to have a strong effect on the organizations that are working in the domain of internet information providing, since their operations are primarily based on technology. The organization in the technology sector need to quickly identify the changes in the technological landscape and integrate those changes as a part of the business operations as well as use it for shaping and refining the product features.
Yahoo! Inc. is required to be vigilant about the technological changes occurring in the industry and incorporate the recent innovations through its R&D function. The demand of interactivity has encouraged the company to explore the different means of providing its customers with a high quality experience. Yahoo! Smart TV is a notable example in this regard as it merges the need of entertainment and interactivity (Satell, 2015).
The increasing consumer demand pertaining to different apps is also a technological opportunity that needs to be managed by the technology based organizations to maintain a strong position in the market. Keeping this point into consideration, Yahoo! Inc. has developed different apps that aim to fulfill the various needs of the target market.
Legal Factors
The legal regulations and government policies govern the operations of the technology based organizations. The different legal framework implemented in different countries can become a source of challenge for technology based organizations as it can cause disruption in the company operations. Different countries may have different level of strict policies pertaining to technology and information providing.
The issue of consumer privacy is the main area of legal concern for Yahoo! Inc. as any problem arising in this domain can lead to litigation as well as loss of trust among the target market. Along with that claims related to intellectual property violation can become a source of loss for the organization (Yahoo! Inc., 2014).
Environmental Factors
The environmental factors related to technology sector shape and guide the corporate social responsibility related initiatives. In case of Yahoo! Inc. the company has been involved in various CSR related activities to demonstrate support for the environment protection policies. For instance, the focus on green offices and energy efficient offices has been an indication of the company’s efforts to embrace sustainability. Apart from the focus on efficient sources of energy, the company has set up a fund to contribute for environment protection endeavors (Yahoo! Inc., 2012).
References
Kuchler, H. & Waters, R. (2015, February 9). Yahoo: Identity crisis. The financial times. Retrieved from http://www.ft.com/cms/s/0/b87f44c6-aacc-11e4-91d2-00144feab7de.html#axzz3xnYKdHTl
Satell, G. (2015, June 6). The Future Of TV Is Here. Can Cable Survive? Forbes. Retrieved from http://www.forbes.com/sites/gregsatell/2015/06/06/the-future-of-tv-is-here-can-cable-survive/#2715e4857a0b7761733e428b
Yahoo! Inc. (2012). Sustainability Matters at Yahoo!. Yahoo! Yodel. Retrieved from https://yodel.yahoo.com/blogs/general/sustainability-matters-yahoo-10433.html
Yahoo! Inc. (2014). Form 10-K. Retrieved from https://www.sec.gov/Archives/edgar/data/1011006/000119312515066560/d826131d10k.htm