T HE Y ORK G ROUP We make going global easier

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Little Things Can Mean A Lot

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Forces Driving Globalization MarketTransparencyMarketTransparency InvestorRequirementInvestorRequirement EmergingMarketsEmergingMarkets GeographicDiversityGeographicDiversity

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Anyone Can Go Global Going global is not a problem The real challenge is to do it profitably.

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – The Start of “International” Thinking Always wanted to go to Paris – why not set up our European HQ there? We just sold a big license to Ford, and they want us to support an installation in Brazil A guy from Korea we met at a trade show wants to be our distributor there. They speak English, don’t they? China is huge. Let’s set-up an office in Beijing My cousin Vinny lives in Australia and knows people in the computer industry Canada is just another state… so, we could sell from here! You know it’s summer there during Christmas!!

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Going Global Market Entry Strategy

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Market Entry Options Domestic Company International End User Subsidiaries Selling from Home Direct Resellers Market Partners OEM Indirect ?

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Direct vs. Indirect DirectIndirect InvestmentHighLow Time to marketSlow in today’s market Better access to prospects Mgmt requiredSenior levelOperations level Learning curveLimitedCould be extensive Cost of failureHighLimited exposure

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Two Basic Channel Models You are a strategic product OR You are a portfolio product The resellers do their own marketing ORYou produce leads for the resellers They sell a lot of your product ORThey don’t sell much at all Either

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Why Don’t Resellers Sell? Portfolio mentality  A lot of “nice to haves” Strategic product inertia  2 products keep the company alive Internal business processes  Must happen quickly – or inertia takes over  The sales process must be influenced  Lead generation is the key Salespeople take the path of least resistance Agree and monitor milestones Slipstream into the “flow” by taking small steps

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Distance and Profits DistanceTrust Profits

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Partner Application Identify Potential Partners Manage the Prospect Pipeline Follow-upInitial Contact Product EvaluationLetter of IntentMarketing PlanFinal ContractSchedule Training Recruitment Process

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Going Global Market Selection

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Europe Today

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – A Single Europe? French cooks British police German engineers Swiss organizers Italian lovers HEAVEN British cooks German police French engineers Italian organizers Swiss lovers HELL

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – LanguageUKNordic, the Netherlands Germany, Spain, Eastern Europe Adoption CycleNordic, the Netherlands UK, Spain, BalticsFrance, Germany, Italy Economy, Market Size UK, France, Germany Italy, Spain, Nordic, BLX Eastern Europe Comms Infrastructure Nordic, UK, Netherlands Germany, Baltic states France, Italy, Spain Corruption (Least) UK, Nordic, Netherlands, Germany France, Italy, Belgium, Spain Greece, E. Europe Competition (Least) Nordic, BLX, Italy, Spain Germany, FranceUK Ease of Market Entry

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Japan  Keiretsus  Understanding  Patience  Implementation  Drinking

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Korea  Indirect market  Often overlooked, despite its size  Cell phones, broadband and gaming  Structural instability, political and economical  North Korea a real wild card

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Why China?

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Challenges in China  Not a developed market for many products  Piracy and counterfeiting  Immature distribution systems  Lack of local management talent

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – India  2nd largest emerging nation in world  3rd fastest growing economy in the world  3rd largest GDP in Asia  4th largest market in terms of purchasing power (a middle class market of 300 million)  TV audience of 400 million people  Service sector contributes 45% of GDP

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Sunrise Sectors  Telecommunications : USD 37 billion  Retail : growth rate of 37% p.a  Health Care  Entertainment : largest film industry in the world  Banking and finance  Insurance : only 20% insured  Biotechnology : next wave

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – India Market Entry - Challenges  Infrastructure hassles (transportation, power outages, low telephone penetration)  Indian bureaucracy (inefficient & sometimes corrupt)  Conservative mindset  Diverse market (16 official languages, 6 major religions, ethnic diversity)  Piracy

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – Summary - Keys to Success Market intelligence and data  Know what you are getting into before going  Plan for 2x as much time  Budget for 4x as much money Hire locally – the American mindset is different  Foreign managers are just that… foreign  You’re not from around here… are you? Look “international” – product and marketing  Simple things… like having a “.eu” Partners and alliances

Copyright© 2002 The York Group International, Inc. Global Reach Local Relationships The York Group International Technology Partners © Copyright 2006 – THE YORK GROUP Thank you! Any questions?