Page 1: Introduction
The Internet is a rapidly growing medium which enables people all over the world to share information, communicate, be entertained and conduct business. It is beginning to influence the lives of many people. Research has shown that web users worldwide will grow from approximately 142.2 million at the end of 1998 to 398.6 million by the year 2002.
This case study examines how Freeserve became the UK’s largest Internet service provider after only nine months of operation. In a fiercely competitive market, Freeserve has taken steps to maintain its advantage by becoming a public limited company and analysing its external business environment.
To date Internet usage in the UK has lagged behind the United States for a number of reasons:
- A lower number of UK homes have a Personal Computer – in 1999 only 39 per cent of UK households owned a PC compared to 57 per cent in the US
- The high costs of Internet use in the UK - the monthly cost of Internet access in the UK, based on 20 hours of Internet use plus telephone charges, per month, averaged $46 and $70 for non peak and peak calling times compared to $40 in the US at any time
- Lack of consumer friendliness and insufficient UK content - non-UK companies who lack understanding of UK consumers have created the content and information available on the Internet in the UK.
As a result of its extensive knowledge of UK Personal Computer consumers, Dixons, the UK’s leading electronic retailer, developed Freeserve specifically to meet their needs. Freeserve was launched on 22nd September 1998 as part of the Dixons Group.