The document summarizes a presentation for shareholders about a Canadian school uniform manufacturer considering expanding into China through a joint venture. It outlines the company profile, the problem of market saturation in Canada, and proposes a joint venture solution in China. It then evaluates China's economic, technological, legal, and political environment and provides quantitative and qualitative criteria for the decision. Recommendations include forming a joint venture with a 51% Chinese partner initially and addressing cultural and implementation challenges.

1. Welcome Shareholders! We Suit You Capital Gains Investment Seminar Presented by Dreams Come True Consulting Team

2. WE SUIT YOUGlobal Expansion Analysis Christian Fanning

3. Agenda Company Profile Problem Statement & Proposed Solution Environmental Assessment Key Decision Criteria Quantitative & Qualitative Assessment Recommendations Action & Implementation Planning Organizational Design, control and Staffing Managing Cultural Differences Dealing with local concerns

4. Profile The Business: Manufacturer Designer Distributer Primary Market: Elementary Junior High High School

5. Profile Supplies 30 school across Canada Ranging 5 to 18 years Marketing & Networking Channels: School directors Teachers School Boards

6. Profile Distribution Channels Organizational Structure Hiring Practices

7. Problem Cause Statement Market becoming Saturated Limited Population growth and decreasing enrollment in schools Competitor Outsourcing to Malaysia Undercutting Prices

8. Proposed Solution

9. Proposed Solution

11. Key Decision Criteria

12. Environmental Assessment Economic “a country’s level of economic development generally determines its economic stability and, therefore, its relative risk to a foreign firm.” Deresky China has felt the burden of the current Financial Crisis Government challenged to find jobs for its fast growing population Promoting FDI

13. Low dependence on technology ½ of China’s investment in textile industry is spent on imported equipment. Abundant supply of inputs Environmental Assessment Tech.

14. Based on Civil law system “Guilty until proven innocent” Corruption Due Diligence Formal contracts are not common Environmental Assessment Legal Chairman Mao

15. Environmental Assessment Political Tiananmen Square Massacre Socialist Republic / Communist Party World Trade Organization Political Risk & Stability

16. Quantitative Criteria Market Share Consumer Market growth 160 Cities pop. 1 Mil+ New market potential- Workplace Uniforms

17. Quantitative Criteria Growth Rate Predicted GDP China= 8% (2009) Predicted GDP Canada= 1.2% (2009) Financial Crisis Enrolment rate of High-school students 85%

18. Quantitative Criteria Cost and Quality issues Cost Table In-house quality monitoring system

19. Qualitative Criteria Competitive Advantage Western Style Clothing Location Price Customer Satisfaction Response time Identifying customer needs

20. Qualitative Criteria Corporate Image Canada- Job loss, Exploitation, CSR China- Job gain, Building relationships Ethics- Third party auditor, workplace standards

21. Qualitative Criteria Ease of Implementation Advantages of forming an IJV Training, Negotiation, Relationship Building Cultural Sensitivity Discussion Groups Local sellers Training: Cultural assimilators, sensitivity training, language training, Field experience

22. Reccomendations Form IJV Wait for financial stability

23. Action/ Implementation Entry Strategy IJV with ‘Xinda Corporation’ 51% to 49% ownership Benefits of JV mode Avoid tough licensing requirements Share Risks and Costs Access to new markets Existing Manufacturing Facilities Location

25. Organizational Design

26. Organizational Design Control Issues Performance Data Financial Reports Visits by head office Evaluation Methods Company Intranet

27. Staffing Policy Regional Manager China = Canadian Overseas Chinese network Plant Staff and Functional Managers = Chinese Compensation Training

28. Managing Cultural Difference Motivation Achievement Guidelines Team Approach Job Security Rewards Low wages but high degree of benefits Money is a social status incentive Loyalty and seniority Team rewards as opposed to individual job enrichment

29. Managing Cultural Difference Leadership Team-oriented Leader Charismatic Autocratic style would fail

30. Managing Cultural Differences Communication Problems Language Time Saving face Non-verbal Communication

31. Action & Implementation Negotiation Strategies Focus on process rather then solution ‘Guanxi’ Cultural Norms Politeness and Emotional Constraint Emphasis on social obligations Kinship networks

32. Dealing with Local Concerns Unsafe Uniforms Environmentally Hazardous emissions from plant. Take over of local community housing area to build plants Cause locally owned companies to go out of business Loss of natural resources in the area Attract more skilled employees from big cities causing a loss of jobs for rural people.

33. QUESTIONS?