Yelp's Strategy, Current Performance, and Competitive Landscape

Yelp Company Analysis
Name
Institution
Course
Instructor
Date
Introduction
Yelp Inc., founded in 2004 by Jeremy Stoppelman and Russel Simmons, has emerged as a global digital giant, boasting over 200 million reviews by 2023. While Yelp is the go-to platform for local business insights, it grapples with issues like fake reviews, competitive pressure from tech giants like Google and Facebook, and evolving user preferences. Research highlights concerns about review authenticity. Yelp's challenge isn't just competition but also establishing its unique value. As user behavior shifts toward mobile, adaptation is crucial. This report critically assesses Yelp's strengths, weaknesses, strategies, and future plans, concluding with a per-share valuation using the Adjusted Present Value (APV) method.
History and Background of Yelp
Since its formation in 2004, Yelp Inc. has been a pioneering force in reshaping consumer interactions with local businesses (Zhang & Luo, 2023). Early on, Yelp established itself as a community-driven platform for user-generated reviews, fundamentally altering the way consumers make local business decisions (Luca & Zervas, 2016). Its journey from a startup to a publicly traded company on the New York Stock Exchange in 2012 exemplifies its ability to navigate the complexities of the tech industry (Rosenfeld, 2021). However, Yelp's history has also been marked by legal controversies, including allegations of review manipulation and extortion tactics (Quan et al., 2022), impacting its reputation and becoming a topic of academic debate (Román et al., 2023).
Yelp's core offerings include business listings and user-generated reviews, offering consumers insights into a diverse range of local businesses (Luca & Zervas, 2016). The platform allows users to access business information, read and contribute reviews, creating a dynamic repository of local business knowledge. In addition to these core services, Yelp has expanded its product portfolio to include features like online reservations, food delivery, and advertising solutions (Smith, 2022). These offerings aim to boost user engagement, monetize the platform, and diversify revenue streams beyond traditional advertising
Yelp's impact extends beyond Silicon Valley, with a strong presence in the United States, particularly in major metropolitan areas (Yelp.com, 2023). Its mission is centered on connecting people with great local businesses, empowering consumers to make informed choices while aiding local businesses' growth. Research by Luca & Zervas (2016) underscores the significance of this mission, positioning Yelp as a vital resource in the local market ecosystem. The company's vision aligns with its strategic moves, aiming to integrate into consumers' daily lives, influencing their decisions regarding local businesses and services.
Yelp's strategic goals revolve around enhancing user engagement, expanding its user base, and delivering value to local businesses through advertising and related services. It seeks to maintain its status as a trusted review platform while broadening its service offerings to capture more consumer touchpoints and attract advertising investments. In summary, Yelp's history, core offerings, ma...