Yola: Managing Multiples Challenges
How should Lingham manage the dual structure? We are conscious thank to the case reading that Mr Lingham is facing a major dilemma: South Afrika is cheapest than Silicon Valley. The labor cost is indeed more attractive there. But he cannot manage to relocate its locals only in South Africa because Yola needs to keep in touch with their partners who are indispensable for company’s probability and technology awareness. It’s thus on this background Mr Lingham will have to manage its dual structure. How should he manage the structure?
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I would answer by saying he has to make (according to me) two improvements, the one concerning human resources, the order concerning the balancing of functions between the two locations. First of all, concerning its structure, because of the lower labor cost in South Africa he should relocate there a part of its jobs while keeping enough function centers there to maintain closed relations with partners and benefits of technologies synergies. Secondly concerning its human resources, Yola because of the growth forecast and thus the number of employees it is expecting in the next few years, will face more complexes human issues.
Therefore to deal with these issues, Mr. Lingham should develop a coherent human resources management structure inside of the whole group, creating a Human resource section in Cape Town where it is inexistent until now. The company structure indeed is going to change; offices in Cape Town would have a higher importance and wouldn’t only manage support functions. There, Mr. Lingham should for example proceed to a very strong selection of their employees before hiring so that they correspond as most as possible company values (e. . patience, team working skills). Furthermore, resulting from the new structure, the online team working as distant global relations will become a higher substantive part of the company day-to-day life which means that the company will really face a real culture challenges. It confirms the important role human will play in the future of the company. In conclusion, M. Lingham will have to manage its company structure by modifying and adapting human resource policy to this new structure and to the arrival of future employees.
How viable is the proposed expansion into the developing world as a future source of competitive advantage for Yola? The company proposed in fact to base its competitive advantage on a rapid internationalization capability into markets that their competitors cannot reach. I have a shared opinion concerning this strategy. Prima facie, it seems to be a good idea but on another hand it seems being a breakable competitive advantage: First of all, I’m explaining why it could be a competitive advantage according to me.
There are a lot of emerging markets that would constitute a huge amount of potential new clients. Furthermore, we know the importance of the “net effect” in that kind of markets: I mean by “net effect” that everyone is using the most famous website and website friends are using like it is the case with Google and Facebook. So if they are becoming the world largest company being the first and the major provider of this kind of service, they will probably benefit of real long-term competitive advantage.
Now, I’m going to explain why their policy is maybe not viable: According to me is a risky business and they should better try to differentiate more or to focus on some markets. They risk indeed to face huge concurrence if they turned out to be successful in their initiative. Attracting by a new successful sector, giants with big pockets would probably join the competition and these giants are presents around the world e. g. Google. And against these kinds of competitors that are already everywhere, they won’t be able to boast from being the only one capable to target specific markets.
In conclusion we cannot determine without knowing the future of the market if the policy is viable. The company could indeed be or in a very favorable situation as well as suffering aggressive competition depending of the entrance of “giants” or not on the market. What is the core challenge facing Yola? The core challenge that Yola has to face is succeeding in implementing a organizational structure that fits with thoughtful strategy based on a long-term competitive advantage. This is one part of the challenge.
The second part of the challenge is about the competition the company will have to go through and all of this in a very fast changing environment in which the company is growing fast. First of all, as we said it before in question one Yola must implement a coherent organizational structure: The main challenge would to find the good level of function to share between it’s to pole and the human resources implication he would have to face. Sharing more decision functions would involve more decision making trouble. So the company would in fact face a major human challenge: Organizing team work between two strong poles of its activities.
They indeed have to pass the step from being a start-up to become a really Multinational enterprise dealing with daily major issues. The success of this challenge will depend upon the ability of the firm to be competitive, allowing it to enjoy lower cost than competitors and thus getting a real long term cost advantage which could consider as a real long term competitive advantage because its competitors are all located in the Silicon Valley. Under this condition, they maybe will be able to compete with giants.