SANCTUARY SOFT

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
• FDI Up 6.14
• Fiscal revenue Up 12.1 
• Exports Up 25.1
• Imports Up 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, PG, 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 worlds 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 childrens 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, Chinas 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 years
  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

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 Outsourcing 20.7 (3.03 billion) 47.7
System Integration Software 157.34 (23.03 billion) 17.3
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 Outsourcing 1.38 billion 34.2
Industry Total 589.1 (86.23 billion) 20.3
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 Shanghais Pudong district the average rate
  per square foot was 68.45 while New Yorks
  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
• Germanys GDP is extremely high being
  3,346,700,000,000 (US Dollars)

22
ECONOMY (CONT.)

• Germanys economy, Europes 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

• Germanys 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

• Germanys IT services spending is forecast to
  reach around US23.9 billion in 2010, rising to
  US29.9 billion in 2014
• In 2010, German market software sales are
  projected by BMI at US18.8 billion and, despite
  the uncertain economic conditions, revenues are
  expected to rise to US21.1 billion in 2014
• Germanys 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 worlds 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
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• http//www.economywatch.com/world_economy/germany/
  
• http//www.frankfurt.de/sixcms/detail.php?id43717
  1_ffmpar_id_inhalt719011
• http//www.easyexpat.com/en/frankfurt/overview/eco
  nomy.htm
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  ry20100123092140506

36
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37
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• http//www.chinaknowledge.com/Business/CBGdetails.
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