XYZ Company Market Opportunities in China Final Report Date Download the entire document at: www.gazhoo.com

XYZ DI China has engaged ABC to collaborate in developing a demand creation strategy to grow its business in the PRC. To accomplish this goal, we have worked together to assist XYZ to better understand China’s market dynamics and formulate a multi-faceted strategy to enable XYZ to secure a sustainable competitive position. Provide an overview of the China DI market, and analyze DI development potential Estimate the market size based on the key growth drivers as well as the impact of macro-economic and political environment Identify target industry sectors, assess the respective buyer values, and segment the market Design XYZ’s value proposition to the Chinese government and primary customers in response to their priorities and business requirements Identify XYZ’s strategic initiatives to create stronger DI demand Formulate strategies and establish a corporate infrastructure and system (government relations, market image, product portfolio and channel partnership) to position XYZ for long-term growth Prioritize the major opportunities, plot a strategic path to capture the market, and identify the keys to operational excellence for XYZ Project Scope Download the entire document at: www.gazhoo.com

Provide an overview of the China DI market, and analyze DI development potential

Estimate the market size based on the key growth drivers as well as the impact of macro-economic and political environment

Identify target industry sectors, assess the respective buyer values, and segment the market

Design XYZ’s value proposition to the Chinese government and primary customers in response to their priorities and business requirements

Identify XYZ’s strategic initiatives to create stronger DI demand

Formulate strategies and establish a corporate infrastructure and system (government relations, market image, product portfolio and channel partnership) to position XYZ for long-term growth

Prioritize the major opportunities, plot a strategic path to capture the market, and identify the keys to operational excellence for XYZ

XYZ’s current position is being affected by a number of critical market forces — fluid regulatory environment, new emerging customers, intensifying competition and powerful channels. These forces have created tremendous opportunities for DI players, yet also pose serious competitive threats to XYZ’s long-term growth as well as short-term market standing. China DI Market Dynamics XYZ Reinvent its Approach to the Market G O V E R N M E N T C O M P E T I T I O N Situation Opportunity & Threat Strong bargaining power due to business capabilities Deal-oriented, short-term approach Inexperience in DI, coaching and training needed Control customers Lack of loyalty C H A N N E L Situation Opportunity Emerging customer sectors More sophisticated approach to DI solutions Demand for new products/solutions Higher requirement for quality product and customer service C U S T O M E R Download the entire document at: www.gazhoo.com Situation Opportunity Fragmented & unregulated Multiple bureaus and influential industry associations Shape and influence the policy making process Potential “Big Bang” might erupt Situation Threat Aggressive players vying for share Strong low end product offerings & pricing strategy Addressing customer requirements in solutions & pricing New product launch attacking XYZ

Strong bargaining power due to business capabilities

Deal-oriented, short-term approach

Inexperience in DI, coaching and training needed

Control customers

Lack of loyalty

Emerging customer sectors

More sophisticated approach to DI solutions

Demand for new products/solutions

Higher requirement for quality product and customer service

Fragmented & unregulated

Multiple bureaus and influential industry associations

Shape and influence the policy making process

Potential “Big Bang” might erupt

Aggressive players vying for share

Strong low end product offerings & pricing strategy

Addressing customer requirements in solutions & pricing

New product launch attacking XYZ

ABC has estimated that the market will reach US$ 86 million by 2002. To capture the opportunities and create market demand, XYZ should take two strategic steps: new product introduction and customer base expansion. Demand Creation Introduce new products Expand customer base 1998 DI market US$ 18 Mn 2002 DI market US $86 Mn XYZ share XYZ share No strong market pull Simple product portfolio Low DI awareness Limited customer base Technology limitation (e.g. OCR) Weak channel capabilities HURDLES Channel Customer Government Marketing Differentiation Low End Mid Range High End Strategic Thrusts Only with such parallel efforts, can XYZ overcome the DI development hurdles and create a sustainable marketplace for itself. Download the entire document at: www.gazhoo.com

No strong market pull

Simple product portfolio

Low DI awareness

Limited customer base

Technology limitation (e.g. OCR)

Weak channel capabilities

Table of Contents What Is the Potential of China’s DI Market? How Does and Will the DI Market Look? What Should XYZ Do To Expand Business? Growth Drivers and Market Size Scenarios Regulatory Environment Customer Behaviors Competitive Dynamics Channel Insights Value Proposition Government Strategy Product Strategy Marketing Strategy Channel Strategy Strategic Path/ Implementation Risk Management Download the entire document at: www.gazhoo.com

Growth Drivers and Market Size

Scenarios

Regulatory Environment

Customer Behaviors

Competitive Dynamics

Channel Insights

Value Proposition

Government Strategy

Product Strategy

Marketing Strategy

Channel Strategy

Strategic Path/ Implementation

Risk Management

The China DI market will experience huge growth over the next 4 years. To estimate the likely market size, we have taken into account multiple market growth drivers and have used a comparative proxy analysis to verify the results. Base Scenario DI Specific Drivers Macro-Factors Setback Scenario Favorable Scenario Market Estimate Approach Normal Conditions (industry drivers & macro-factors) Download the entire document at: www.gazhoo.com Natural Growth of Demand Sellers’ Marketing Efforts Technology Maturity & Price Decline Other Natural Growth Drivers Specific to Industries Comparative Study on laser printer and videoconferencing Verification by comparison between China and world DI growth GDP/Macroeconomic Sino-US Relationship WTO Entry China Digital Economy Development Agenda

With all four macro-factors playing a positive role on the development of the DI market, the favorable scenario suggests a US$ 100-110 million market in year 2002. GDP/ Macroeconomic Sino-US Relationship WTO Entry China Digital Economy Development Agenda Individual Impact (on Base Scenario) 5% 5% 5% 5% Synergistic Impact 30% The China DI market size will be US$100-110M if macro-factors are all favorable to DI development. Favorable Scenario Favorable Scenario Additive Impact 20% Download the entire document at: www.gazhoo.com China’s GDP keeps high growth rate (8%), which accelerates DI development Aggressive SOE reform Sino-US relationship progresses steadily & US investment in China is highly encouraged & well protected, esp in hi-tech China enters WTO which greatly reduces DI tariffs --> price drops--> demand rises substantially Government continues to push IT as a national economic pillar

China’s GDP keeps high growth rate (8%), which accelerates DI development

Aggressive SOE reform

Sino-US relationship progresses steadily & US investment in China is highly encouraged & well protected, esp in hi-tech

China enters WTO which greatly reduces DI tariffs --> price drops--> demand rises substantially

Government continues to push IT as a national economic pillar