GLOBAL ENTREPRENEURSHIP

( EAB41603 )

GROUP : AC 30

CASE STUDY:
FEDERAL EXSPRESS & SEDO.COM

PREPARED FOR:
DR. LOKMAN BIN SALIM

PREPARED BY:

Name
MUHAMMAD RUZAINI BIN MD YUSUF
MOHAMAD AMIRUL ASRAF BIN MAT HUSSEIN
ASBULLAH ISMAIL BIN ABIDIN
MUHAMMAD SHYAZWAN BIN RAMLI
MUHAMMAD HARITH BIN MOHD YUSOF

ID No.
62288112082
62288112198
62288112250
62288112139
62288112087

CASE STUDY OF:

FEDERAL EXSPRESS

1. In April 2008, Delta Airlines announced its intention to merge with absorb Northwest
Airlines, formerly known as Northwest Orient. Delta Airlines had already grown
though the acquisition of Northeast in 1972 and Western Airlines in 1986. Northwest
was also a large airline, having absorbed Republic Airlines, itself a merger of North
Central Airlines, Southern and later Hughes Airwest. Republic had an important hub
in Memphis, as did Federal Express. The Result would be a global airline with hubs
in Asia and Europe as well as across the United States. Will an enlarged Delta
Airlines be a threat for FedEx?

In this case, No, Delta Airline is a treat for FedEx. FedEx has good reputation for a
long time globally. The company can maintain their current customer and future
customer as long as they can maintain their good performance and service quality. By
entering of Delta Airlines as a competitor of the company, FedEx can improve their
performance towards their competitor performance to be their benchmark and can
improve performance from that.

2. How FedEx maintain the capacity to keep up with Chinas growth?

China has a very large population. The populations are remaining to be increase every
year. With this large population, means there is a lot of demand on delivery services.
China is among largest economy in Asia. So that the demand for delivery are not only
inside the China but between China and other country. To keep maintain the capacity
of Chinas growth, FedEx should prepare more services such as add more airfreights
and land transport too support the increasing on demand .

3. What risk does FedEx encounter when subcontracting?

The risk that FedEx encounter when subcontracting is, the public images of the
company will affect if the subcontracting didnt provides good service and
performance. If the public image affected, the competitors will takes opportunity to
get benefit from companys bad performance.

4. In 2008, crude oil must more that US$100 per barrel and this was reflected in the
price of jet fuel at the pump. Why might this be of concern to FedEx?
FedEx has many airfreight and land vehicle for delivery services. The increasing of
per barrel price of oil should be concern by FedEx because it will increase the
expenses of FedEx operation. Increasing of per barrel crude oil, also can affect the
profit of the company at the end of the financial year. To prevent the decreasing of the
profit, FedEx should increase their service price to cover up the expenses incurred.
5. How might a devalued American dollar hurt FedEx?

The devalued of American Dollar may not affect the profit previous year however the
profit will use to cover expenses incurred in the next year, so if the American Dollar
devalued on the next year, the value of profit last year actually was decreased
therefore FedEx have to spend more money on their expenses. On the future, the
company will suffer the decreasing in the profit and to cover the decreasing of the
profit, the company should make a cut cost to reduce expenses or increase the service
payment towards their customers.

CASE STUDY OF:

SEDO.COM

1. How did Sedos market value develop from 2000 to 2006?

The annual growth rates of the market were tremendous until the beginning of 2000.
Then, because of the dot.com crisis, the prices for domain names decreased rapidly
along with the total volume on the domain aftermarket. This slump leveled out in
2003, and the domain aftermarket enjoyed a strong rebound and the market volume
increased by double digit rates. By the end 0f 2006, the total number of aftermarket
transactions increased to $96.9 million. Sedos market value was grown up starting in
2000. Whereby the structure of domain aftermarket has changed significantly since
Sedos entered the market. In 2000 Afternic and GreatDomain is the two companies
that dominated the market. Thus the crisis of dot.com effect to the two company and
they wiped out the market. The structure of domain aftermarket has changed
significantly since Sedos entered the market. This is because of Sedos team
assessment and entrepreneur. Sedos was found by Tim Schumacher, Ulrich Priesner,
and Marius Wuerzner. Three of them have experience in Information Technology
industry.

This is one characteristic that correlates to the probability success of

increases of the market value. Moreover, they are familiar with the domain since
young. Despite this increased competition, Sedos has been worlds leading domain
aftermarket since 2004. On 2004 Sedos present a new method, called domain
parking. The successful came from the idea and its competition. The new idea should
be compared with competitive companies. On this Sedos case, they bring a unique
idea that their competitor doesnt think. The market value is increasing when they
starting using aftermarket. This is form a marketplace to buy and sell domain name.

2. To what extent was the 2000 exit strategic for the founders and the investor, Adlink?
Some entrepreneurs use their exit strategy three, five, or twenty years later. As the
owner, you should determine the expected outcome, parameters, and results before
you exercise the strategy. The most common favourable exit strategies are to sell
the business, sell the assets of the business, merge it with another business, or sell
shares in the business to the public at large. In yearly 2000, the young
entrepreneurs decided to invest more of their time and money in the business.
They booked banner advertisements on websites and cultivated relationships with
the press. This occurred at the height of Internet hype, leading to an
overwhelming response from the media and the Internet community. The contacts
they gained during this time were invaluable potential business partners, investors
and future competitors. One of these competitors was Ulrich Essmann, a medical
student working on a project similar to Sedo. He had already acquired the sizable
customer base that Sedo lacked. After assessing Sedos potential, Essmann
decided to join the Sedo venture. The Sedo founders, now including Essmann,
quickly began negotiations with potential investors In this Sedo cases they are
using direct foreign investment method used by global entrepreneurs to enter
foreign markets is the joint venture. This situstion occur when

the global

entrepreneur wants to purchase local knowledge as well as n already established

marketing or manufacturing facility. According to Ulrich Essmann that acquire the

sizable customer base that Sedo lacked. A joint venture can pre-empt competitors,
allowing an entrepreneur to access new customers and expend the market base.
The have a changes in the Sedo cases, the first major change was a conversion
from the original founded partnership to a limited partnership, SedoGmBH. To
what extent by exit strategy, occur when the United Internet AG bought 41% of
Sedo GmBH. Then in April 2005 the United Internet AG was sold their stake to
their subsidiary, AdLink. This sale caused some major changes for Sedos
management team. Benefits of an exit strategy is, Protecting the value of the
business you have built, Creating a smooth transition to your management team or
family members, Generating a potential income for retirement or disability,
enhancing the future worth of your business, reducing or deferring the potential
tax impact on your estate, spouse, or family, and creating a strategic direction for
your businesss growth.
3. Was the 2006 exit a bargain, fair valued, or overpriced? Take into account that
Sedos estimated EBIT was 16 million and average EBIT multiple range between
5.5 and 8.1 for companies in the IT industry.
In 2006 the Sedos exit fair valued because last 2 years competition in the domain
name aftermarket has grown rapidly due to the low barrier to entry. Many small
companies have taken advantage of the opportunity to enter the market. It is
because the crisis of dot-com that causes the prices for domain names decreased
rapidly along with the total volume on the domain after market. The annual
growth rates of the market were tremendous so the market value should not be
overpriced. In 2003, this slump level out and the domain aftermarket enjoyed a
strong rebound. The market volume increased by double-digit rates. At the end of
2006, the total numbers of aftermarket transaction keep increasing and it show fair
value in market place. The profit are generated by three major domain which is
domain trading, domain parking and domain appraisal. The majority of profit
generated by one product which is domain parking service this single-product
dependency is likely to cause challenges for Sedos if competition in market
niches increase and EBIT margins decline. Other than that, Adlink already a major
investor was eager prospect. The founder also considers other investor,
particularly private equity companies that were attracted by Sedos fast growth
and future potential. Due to the positive development of Adlinks earnings and its

prevailing profit transfer agreements with domestic subsidiaries, existing tax loss
carry forwards had to be capitalized in 2006. This is their calculation for Adlink.

4. How can Sedos management team sustain the companys current market position
in the future?
Sedo management team should knowing their competitor very well and being to
position their company and product in that product/market space. If the Sedo
management team emphasizes the competitive analysis too much without taking
into account the competitive strategy, then they can create a reactive strategy that
can be totally ineffective and inappropriate. One of the best method for Sedo team
to enter on international market is to partner with an entrepreneur in that country.
These foreign entrpreneurs know the country and culture and therefore can
facilitate business transaction while keeping the global entrepreneur current on
business, economic, and political conditions. A good partner helps the Sedo to
achieve goals. Innovation is the key to the future of any company, they are variety
of views regarding what constitutes innovation. It is a new technological
breakthrough. By improving the new method that was built by Sedo in other word
they can create a unique characteristic. For example their current method is
domain parking, this facilities can be improved by innovate this method by
unmatched speed that is Sedos parked pages are some of the fastest to load, and
can view and download statistics reports in a flash. Robust tracking tools by track
traffic with keyword search histories and analyse visitor behaviour with detailed
graphs for country of origin and click-through rates. Define and save reports for
quick access later. Smarter technology, semantic content engines categorize and
publish the most relevant content for parked domains based on keyword and

visitor location. And the last one is, award-winning solutions, our customers
consistently vote us the Best Domain Name Parking Company on Domain Name
Wires Annual Survey.