Business Analysis of web.de AG

Business Analysis of web.de AG

von: Andreas Birkholz

Table of contents

Abstract

1 The Industry and the Market  1

1.1 Internet in Germany 1
1.2 Freemail Market in Germany  2

2 The Companies 4

2.1 Similarities  4
2.2 Target Company: Web.de AG 4
2.3 Selected Competitors  5

2.3.1 Freenet.de AG 5
2.3.2 United Internet AG  5

2.4 Other Competitors  6

3 Qualitative Analysis 7

3.1 Macro-Environment Scope: PEST Analysis  7

3.1.1 Political and Legal Factors  7
3.1.2 Economic Factors  7
3.1.3 Social Factors  8
3.1.4 Technological Factors  8

3.2 web.de scope: Ansoff matrix 9
3.3 Critical Review of Applied Models 10

4 Quantitative Analysis 12

4.1 Horizontal Analysis  12
4.2 Vertical Analysis  14
4.3 Key Financial Ratios 16
4.4 Cross-sectional Analysis  18

4.4.1 Definition of the Benchmark 18
4.4.2 Comparison of Web.de with the Chosen Competitors 18

4.5 Critical Review of Applied Models 19

5 Strategic Options (Scenarios)  21

5.1 Short-term Option: Acquire New Paying Customers  21
5.2 Mid-term Option: Focus on B2B 21
5.3 Long-term Option: Expansion 22
5.4 Evaluation of Web.de’s Vision 22

6 Outlook and Recommendations  24

6.1 Industry Outlook 24
6.2 Recommendations and Forecast for Web.de 25

References 27
 

The Internet has been emerging incredibly during the past decade. It has created new ways of communication and doing business. The companies operating via the Internet are confronted with speedy changes in their environment. This term paper analyses the German Internet service provider web.de AG. First of all, the current industry and market of electronic commerce are subject to description. This is followed by a presentation of the current situation of web.de and its competitors.

The analytical chapter is split into two major parts: The qualitative analysis examines the environmental forces whereas the quantitative analysis puts emphasis on financial figures and ratios. Afterwards three options (short-term, mid-term and longterm) of future development of web.de are discussed. Finally, there is an outlook on the web service industry as a whole and some recommendations for web.de in particular. These recommendations are tested and modelled using a comprehensive spreadsheet which results in a three-year forecast.

1 The Industry and the Market

1.1 Internet in Germany

The Internet offers a technology that can connect everybody with anybody else. But there are regional differences in availability and usage anyhow. The technological development and social integration of the Internet is lead by the United States. In Europe, the spread of the new technology was pioneered by the Scandinavian countries which were the early adopters here. Germany belongs to the group of the “followers” (Empirica, 2002). Nevertheless, today nearly half of the Germans goes online. The following chart illustrates what percentage of the population uses the Internet. Source: BITKOM (2003) [Abbildung in der Downloaddatei vorhanden] As the Internet usage is becoming more and more integrated into daily life the e-commerce is growing rapidly. The UNCTAD (2002:19) cites Forrester Research reporting worldwide e-commerce at $2,293 billion for 2002 and forecasting $3,879 billion for 2003. This is about 2% of total commerce which implies high potential for future growth.

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