Growth by liuhongmei

VIEWS: 21 PAGES: 37

									SANCTUARY
SOFT
 Erik Andrews
 Drew Archer
 Younae Eom
EXPANSION SITES

China



Germany
REASONS
These markets give Sanctuary Soft best chances for
 successful even before acquiring new clients

-   Investors

-   Current Clients
FACTORS
 Growth   in Economy
 Target Market (Banks)

 Workforce

 IT Field

 Restrictive Covenants

 Future
CHINA
Growth in Economy
ECONOMY
   GDP has grown by over 10% a year on
    average since 2006
ECONOMY CONT.
Economic figures in Sept 2010
   CPI Up 3.6%
   PP I Up 4.3%
   Industrial added value Up 13.3%
   FDI Up 6.14%
   Fiscal revenue Up 12.1%
   Exports Up 25.1%
   Imports Up 24.1%
o   Industrial enterprises achieved a profit of $392
    billion, a 55 percent growth year-on-year.
o   Sanctuary Soft will have a very good chance at
    success because of these promising statistics
    PART OF CHINA ECONOMY (FOCUS
    CITY)
                         Gross                  Value-added
                                   Per Capita                 Retail    Exports
                         Domestic               Industrial
               Cities              GDP                        Sales     (US$
                         Product                Output (US$
                                   (US$)                      (US$ bn) bn)
                         (US$ bn)               bn)
               Guangzhou     134.0   13063.8            45.7      53.6     37.4
               Shenzhen      120.6   13642.8            52.9      38.2      162
               Zhuhai         15.3   10268.2              7.3       6.1    17.8
               Foshan         70.8   11849.9            43.0      21.0     24.6
               Huizhou        20.7    5251.5              8.9       7.4    17.2
               Dongguan       55.3    8322.2            24.9        5.4    55.2
               Zhongshan      23.0    9150.7            12.7        8.2    17.7
               Jiangmen       19.9    4777.1            11.0        8.4     7.9
               Zhaoqing       12.4    3236.5              4.1       4.1     2.1
   Many world leading multinationals such as IBM, Intel,
    Hitachi, Samsung, Nokia, Sony, General Electric, P&G,
    Amway, ICI, Ericsson, Siemens, Panasonic, Bosch, Toshiba,
    Sanyo, Nestle, Pepsi, Coca-Cola, Toyota and Mitsubishi have
    established their presences in Guangdong.
   There are 2595 bank branch offices in Guangzhou. By the end
    of 2002, the balance of bank deposits in Guangzhou was
    ¥749.835 billion Yuan. At present, there are 30 branches
    and representative offices of foreign banks in Guangzhou.
TARGET MARKET: BANKS

   Four of the worlds ten biggest banks by market
   value are now Chinese
DEMAND FOR SECURITY
Security Issues
China ranks second in the world for
  hosting phishing attacks, accounting
  for 13 percent of the world’s total
  phishing websites
In 2004, police pursued 1,350 online
  fraud and spam cases.
In the first quarter of 2005, 543 phishing
  incidents were identified with 1,361
  illegal websites closed by Chinese
  authorities.
E-Banking
The Industrial and Commercial Bank of
  China (ICBC), has seen extensive
  growth in e-banking program recently,
  with 12 million customers registered
In October, 2004 CCB had over 10
  million new online banking accounts
BANKING
Bank Statistics: 2010
   China Everbright Bank surged 71.35 percent year on year to 1.5
    billion U.S. Dollars
    Bank of Communications, net profit in the first three quarters hit
    4.4 billion U.S. dollars, up 28.23 percent year on year
   Agricultural Bank of China has 320 has million customers, “more
    branches than many Wall Street firms have desks”
   Bank of China third-quarter net profit rose 29 percent year on-year
    to 4.1 billion dollars
   China Merchants Bank profit rose 57.4 percent to 3.07 billion U.S.
    dollars
WORKFORCE AND RESTRICTIVE
COVENANTS
   Happy Employees = Good Business
WORKFORCE: 813.5 MILLION

 About half of the entering
college students are in a hard
science or engineering programs

 Can afford to pay Chinese
Workers more money to keep at
Sanctuary Soft
- Chinese worker: On Average
Paid $197 Dollars/Month
- American Worker: On Average
Paid $3940 Dollars/Month
RESTRICTIVE COVENANTS (CHINA)
   Top tier highly selective schools’ tuition in China= 16,000 ~
    27,000RMB/year ($4500)
   Compared to United States, that is approximately $12000 less
    per year. To reach out to those who have just quit or laid off in
    the recent month, we can poach workers by offering
    compensation for their children’s tuition
   Since costs of living are generally lower in China, we can offer
    more benefits (higher wages, better working times) to attract
    more workers to join our workforce and to keep them from
    leaving
   Going back to previous slides, Chinese workers are generally
    more efficient when you offer them benefits; tripling their pay
    increases their output up to 5 times
IT FIELD

 The IT field in China has as much potential as
  any country in the world!
 In 2008, China’s technology field exports reached
  over 380 trillion dollars which accounted for 29%
  of the world!
 Indian IT Companies: TCS plans to increase its
  existing 1,200-employee base by over five times
  in the next few years, Infosys will invest $100
  million to build a 4,000-professional-strong team.
  Wipro, the third-biggest software exporter, will
  have around 1,000 professionals in a year’s time.
FUTURE
FUTURE (LONG TERM BENEFITS) CHINA
   Some long term benefits for Sanctuary Soft by investing in China include
    saving thousands of dollars with lower costs as well as a good opportunity to
    expand into one of the best software markets in the world. China's software
    industry revenues, January to September 2009

                         Revenue (RMB bln)        Y-o-y change (%)
Software Products        236.67 ($34.64 billion) 21.1

Software Services        148.3 ($21.71 billion)   28.5

Of Which: Software       20.7 ($3.03 billion)     47.7
Outsourcing
System Integration       157.34 ($23.03 billion) 17.3
Software
Embedded Software        117.87 ($17.25 billion) 15.3

IC Design Software       17.31 ($2.53 billion)    6.5

Software Exports         $10.9 billion            39.4
Of Which: Software       $1.38 billion            34.2
Outsourcing
Industry Total           589.1 ($86.23 billion)   20.3
FUTURE
  China's market capitalization will rise to $41
   trillion by 2030 from $5 trillion now. That would
   make China's stock market the biggest in the
   world. U.S. market cap is expected to grow to $34
   trillion from $14 trillion over that time
Hourly Labor Costs in Manufacturing (US Dollars)
- 2003 averaged 63 cents while the United States
   cost averaged 21 dollars and 97 cents
Average Rate of Building Occupancy (US Dollars)
- In Shanghai’s Pudong district the average rate
   per square foot was $68.45 while New York’s
   Midtown district had a cost of around $103.43 per
   square foot
GERMANY
  Economy
ECONOMY
 Even   in the recession years, the German
  economy managed to stay stable as the
  world sixth largest country in terms of
  GDP (2009.)
 4th largest in terms of nominal GDP and
  5th largest economy in terms of purchasing
  power parity
 Germany is also the hub of global
  scientific and technological developments.
ECONOMY (CONT.)
   The German economy grew by 2.2% in the three months to
    the end of June, its fastest quarterly growth in more than
    20 years
   Germany’s GDP is extremely high being $3,346,700,000,000
    (US Dollars)
ECONOMY (CONT.)
 Germany’s   economy, Europe’s largest, will
  expand 3.7 percent this year and 2.2
  percent in 2011, that would be the fastest
  growth since 1991.
 Increased consumption, investments and
  demand for German exports are fuelling
  the recovery,
 Germany is out producing its neighbors by
  wider and wider margins
FOCUS CITY
   Frankfurt (Frankfurt am Main) is the financial
    capital of Germany and, along with Paris and London,
    one of the major banking and financial centres of
    Europe.
   Richest city in Europe in terms of GDP per capita
   Has the highest concentration of jobs in Germany
   The city is home to more than 400 banks and
    financial institutions, including the European Central
    Bank, which established headquarters in Frankfurt
    in 1993.
   55,000+ people employed in financial services
   Credit institutions, headquarters (229)
   Employees of financial activities (73197)
TARGET MARKET
  Banks
     DEMAND FOR SECURITY
   Germany is ranked fourth in the world for being targeted by Trojan
    viruses
   According to Finjan Inc. cybercriminals used a bank Trojan to siphon
    thousands of Euros from more than 6,400 German accounts (2009)
    Currently black market criminals are offering to sell details on 21
    million German bank accounts
   In October, German Telekom reported that thieves had stolen a
    storage device containing account information on about 17 million
    customers

Banks have had to dramatically increase security because of the rise E-
  Banking
2000- 15.1 million online accounts in total
2006- 35.3 million online accounts in Germany



     133% increase
BANK STATISTICS
 Germany’s leading bank, Deutsche Bank, entered
  new dimensions in 2006: for the first time, its
  total assets topped the one-thousand-billion-euro
  mark at € 1,126 billion
- Domestic branches 45,467

1999-2004 Total German Growth
Assets: 1,082.5 billion
Capital: 48.8 billion
Deposits: 840 billion
IT FIELD
 Germany’s IT services spending is forecast to
  reach around US$23.9 billion in 2010, rising to
  US$29.9 billion in 2014
 In 2010, German market software sales are
  projected by BMI at US$18.8 billion and, despite
  the uncertain economic conditions, revenues are
  expected to rise to US$21.1 billion in 2014
 Germany’s IT Market is the best in Europe as
  well as one of the best in the world!!!
WORKFORCE AND RESTRICTIVE
COVENANTS
WORKFORCE
 Germany has the largest population in the
  European Union
 The German workforce is highly educated and
  they are heavy users of technology. This will help
  Sanctuary Soft have a smooth transition from the
  U.S. to Germany
 As of 2005, Germany had about 56,000 graduates
  in the engineering field, a large percentage were
  software engineering, so this will give us a great
  advantage in picking employees
RESTRICTIVE COVENANTS
 Due to strict German labor laws, companies and
  individuals prefer to work with freelancers.
 Most freelancers work with multiple clients and
  have lack of skills.
 There is a huge language barrier between
  German firms and rest of the world.
 An extension of this language problem is the fact
  that most foreign companies do not understand
  German culture and the way they work.
 A solution to this problem is that we have to have
  a German office with German staff as well as
  some of domestic staff who are trained in
  German.
FUTURE
FUTURE BENEFITS
 Benefits for expanding into Germany include
  meeting the needs of our biggest customers so we
  would make them happy. Also we would be
  located in the world’s 2nd largest market for
  software and IT services, which will give us a
  large opportunity for growth.
 Also the market for software alone had a value of
  $22.7 billion and a projected annual increase of
  4.7% in the next five years.
 Also compared to other countries cost of office
  space is relatively cheap, being at an average of
  $61.46 per square foot between the four major
  cities.
CONCLUSION: CHINA
Sanctuary Soft should expand to China because:

o   Growing GDP and Economy
o   Very large and growing bank presence resulting
    in more E-banking
o   Very high number of engineering graduates
o   Can afford to pay Chinese workers more to keep
    at company
o   Lower expenses due to labor and building costs
CONCLUSION: GERMANY
Reasons for Expansion
 The largest European economy

 Very stable and growing economy

 Leader in global technological developments

 Very high demand for information security and E-
  banking
 Largest IT market in Europe

 Please our current client base
SOURCES
   https://www.cia.gov/library/publications/the-world-
    factbook/geos/gm.html
   http://www.economywatch.com/world_economy/germany/
   http://www.frankfurt.de/sixcms/detail.php?id=437171&_ffm
    par[_id_inhalt]=719011
   http://www.easyexpat.com/en/frankfurt/overview/economy.
    htm
   http://www.moital.gov.il/cmsTamat/InternalPage.aspx?FRA
    MELESS=false&NRNODEGUID={B671A172-B0B9-4A4A-
    B4FF-
    FAF66E5802A9}&NRORIGINALURL=%2FNR%2Fexeres
    %2FB378ABA3-4343-4220-A70E-
    699D7F26D7B8.htm%3Fwbc_purpose%3DBas&NRCACHE
    HINT=Guest&wbc_purpose=Bas
   http://www.universityworldnews.com/article.php?story=201
    00123092140506
SOURCES
   http://www.economist.com/research/articlesBySubject/displaystory.cf
    m?subjectid=478048&story_id=E1_TGGJPPPP
   http://www.economist.com/research/articlesBySubject/displaystory.cf
    m?subjectid=478048&story_id=E1_TGVQTGDJ
   http://www.asianinfo.org/asianinfo/china/pro-economy.htm
   http://www.chinalawandpractice.com/Article/1694198/Channel/9930/T
    erminating-Labour-Contracts-Restrictive-Covenants.html
   http://news.xinhuanet.com/english2010/indepth/2010-
    10/29/c_13581252_2.htm
   http://www.economist.com/node/17314578
   http://www.economist.com/research/articlesBySubject/displaystor
    y.cfm?subjectid=478048&story_id=16847872
SOURCES
   http://www.chinaknowledge.com/Business/CBGdetails.aspx?subchap=
    4&content=23
   http://tmt.interfaxchina.com/news/2257
   http://www.frbsf.org/publications/banking/asiafocus/2010/may.pdf
   http://www.marketavenue.cn/upload/articles/ARTICLES_1878.htm
   https://www.cia.gov/library/publications/the-world-
    factbook/geos/ch.html
   https://www.cia.gov/library/publications/the-world-
    factbook/geos/gm.html
   http://data.worldbank.org/indicator
   http://www.reportlinker.com/p0190745/Germany-Information-
    Technology-Report-Q2.html
   http://community.ca.com/blogs/securityadvisor/archive/2010/07/12/zeu
    s-version-3-target-spain-germany-uk-and-usa-banks.aspx
   http://www.german-
    banks.org/html/12_banks_in_facts_figures/sub_02_betrieb/ban_0503.a
    sp

								
To top