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SANCTUARY SOFT

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

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SANCTUARY SOFT

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  1. SANCTUARY SOFT Erik Andrews Drew Archer Younae Eom

  2. EXPANSION SITES China Germany

  3. REASONS These markets give Sanctuary Soft best chances for successful even before acquiring new clients • Investors • Current Clients

  4. FACTORS • Growth in Economy • Target Market (Banks) • Workforce • IT Field • Restrictive Covenants • Future

  5. CHINA Growth in Economy

  6. ECONOMY • GDP has grown by over 10% a year on average since 2006

  7. ECONOMY CONT. Economic figures in Sept 2010 • CPI Up 3.6% • PP I Up 4.3% • Industrial added value Up 13.3% • FDIUp 6.14% • Fiscal revenueUp 12.1%  • ExportsUp 25.1% • ImportsUp 24.1% •  Industrial enterprises achieved a profit of $392 billion, a 55 percent growth year-on-year. • Sanctuary Soft will have a very good chance at success because of these promising statistics

  8. PART OF CHINA ECONOMY (FOCUS CITY) • 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.

  9. TARGET MARKET: BANKS Four of the worlds ten biggest banks by market value are now Chinese

  10. 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

  11. 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

  12. WORKFORCE AND RESTRICTIVE COVENANTS Happy Employees = Good Business

  13. 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

  14. 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

  15. 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.

  16. FUTURE

  17. 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

  18. 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

  19. GERMANY Economy

  20. 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.

  21. 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)

  22. 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

  23. 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)

  24. TARGET MARKET Banks

  25. 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

  26. 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

  27. 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!!!

  28. WORKFORCE AND RESTRICTIVE COVENANTS

  29. 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

  30. 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.

  31. FUTURE

  32. 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.

  33. CONCLUSION: CHINA Sanctuary Soft should expand to China because: • Growing GDP and Economy • Very large and growing bank presence resulting in more E-banking • Very high number of engineering graduates • Can afford to pay Chinese workers more to keep at company • Lower expenses due to labor and building costs

  34. 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

  35. 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&_ffmpar[_id_inhalt]=719011 • http://www.easyexpat.com/en/frankfurt/overview/economy.htm • http://www.moital.gov.il/cmsTamat/InternalPage.aspx?FRAMELESS=false&NRNODEGUID={B671A172-B0B9-4A4A-B4FF-FAF66E5802A9}&NRORIGINALURL=%2FNR%2Fexeres%2FB378ABA3-4343-4220-A70E-699D7F26D7B8.htm%3Fwbc_purpose%3DBas&NRCACHEHINT=Guest&wbc_purpose=Bas • http://www.universityworldnews.com/article.php?story=20100123092140506

  36. SOURCES • http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=478048&story_id=E1_TGGJPPPP • http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=478048&story_id=E1_TGVQTGDJ • http://www.asianinfo.org/asianinfo/china/pro-economy.htm • http://www.chinalawandpractice.com/Article/1694198/Channel/9930/Terminating-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/displaystory.cfm?subjectid=478048&story_id=16847872

  37. 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/zeus-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.asp

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