In spite of the leading position of both Yahoo and JC Penney in their industries, both companies still face a number of internal and external risks.
Yahoo’s external risks
- Increasing competition ”“ the competition, especially from the part of Google puts under a threat the position of Yahoo in the market, especially in the US
- Financial problems ”“ Yahoo faces considerable problems and needs to negotiate its merger with another company to balance its financial position. The company has already conducted negotiations with Microsoft and carries on searching for a company to merge with
- Security issues ”“ today, security issues are of the utmost importance and Yahoo faces substantial difficulties with provision of users with the high level of security. At the moment, Yahoo cannot fully protect its users from adware and spyware and the risk of identity theft and online frauds persists.
Yahoo’s internal risks:
- Job cuts ”“ the company has to cut jobs to save costs. As a result, the company loses well-qualified professionals and internal atmosphere within the company is unstable because employees are uncertain in their future.
- Need to technological improvements ”“ technological improvements are necessary to maintain Yahoo’s competitive position but they are too costly.
JC Penney’s external risks:
- Competition ”“ the competition increases from the part of conventional retailers and online retailers that undermines the competitive position of JC Penney
- Economic recession ”“ economic recession led to the drop of sales because of the decrease of customers’ buying power
JC Penney’s internal risks:
The high personnel turnover ”“ the high personnel turnover affects negatively the quality of services because new employees need training to perform well.