1. CSI Iryna Butler Michael Dongieux Carrie Hogue Lifeng Geng Steve Martin

2. Agenda Executive SummaryExecutive Summary Company OverviewCompany Overview SWOT AnalysisSWOT Analysis Macro-Economic OutlookMacro-Economic Outlook Micro-Economic OutlookMicro-Economic Outlook

3. Executive Summary CSI seeks to achieve the following objectives: 1.Lower Risk Profile 2.Market accumulated intellectual property in the form of a commoditized product/service 3.Become an International Firm We recommend: 1.Standardize “Pharos” product for small-medium Brazilian businesses 2.Build a broader revenue base to lower risk, and 3.Eventually enter the US market

4. Company Overview 16-employee Brazilian systems engineering firm serving primarily large clients (VW, GM) since 199116-employee Brazilian systems engineering firm serving primarily large clients (VW, GM) since 1991 Specialize in the implementation of automated monitoring and control systems to manage production processes, quality and logisticsSpecialize in the implementation of automated monitoring and control systems to manage production processes, quality and logistics highly customized, low cost, end-to-end service enables CSI to compete with much larger firms in the same industryhighly customized, low cost, end-to-end service enables CSI to compete with much larger firms in the same industry Their prized “Pharos” product represents the culmination of 18 years of experience in the industryTheir prized “Pharos” product represents the culmination of 18 years of experience in the industry

5. SWOT Analysis Helpful to achieving the ObjectiveHarmful to achieving the Objective Internal Origin (Attribute of the Company) Strengths  Strong IP base (Pharos) & accumulated experience  Good reputation with large Brazilian clients (VW, GM) Weaknesses  Limited Resources (16 employee firm)  Currently only 4 big clients External Origin (Attribute of the Environment) Opportunities  A large small-to-medium sized business market  BNDES Bank Subsidies for Technology Development  Few local competitors Threats  Brazilian Hiring/Firing Law  Customer attrition (CSI only able to handle 4 large projects simultaneously)  Global economic slowdown  US Competitors

6. US Economic Outlook Current ConditionsCurrent Conditions –2008 GDP grew by 1.1%, 4Q 2008 contracted by 6.2% –Business and consumer spending contracted, sentiment low –Unemployment 8.5%, lowest number of manufacturing jobs since 1985. OutlookOutlook –GDP contract 2.4% in 2009, grow 2.0% in 2010 – Unemployment 10% before getting better –Tight consumer and business credit market –Stimulus, Fed policy and recovery

7. Brazil Economic Outlook Current ConditionsCurrent Conditions –9 th economy by GDP, regional industrial power, prudent economic, financial and fiscal policy, strong trade balance and reserves –GDP grew 5.1% in 2008, Q4 2008 contracted 3.6%, inflation 5.7%, unemployment 8.5% OutlookOutlook –GDP contract 0.3% to 1.5% in 2009 –Inflation 3.5% in 2009 –Retail continues to be strong –Earlier recovery compare to developed economies

8. Macro-Economic Environment CSI: a local small company with limited financial, human and technical resourcesCSI: a local small company with limited financial, human and technical resources Weak economic outlook in U.S.Weak economic outlook in U.S. Brighter growth potential in Brazil and Latin America regionBrighter growth potential in Brazil and Latin America region Recession impact on strategic decisionsRecession impact on strategic decisions Risk of expansion to U.S. vs. position for future growth: tight credit marketRisk of expansion to U.S. vs. position for future growth: tight credit market

9. US Industrial Process Control Industry NAICS 334513 - Industrial process control instrument is in contracting manufacturing sector of the economyNAICS 334513 - Industrial process control instrument is in contracting manufacturing sector of the economy As of 2007, 66 out of 108 firms are small businesses, 34% failure rate among small businessesAs of 2007, 66 out of 108 firms are small businesses, 34% failure rate among small businesses Industry total sales: $1,376 million, firms with sales less than $4.99 million has a market share of 6.6%Industry total sales: $1,376 million, firms with sales less than $4.99 million has a market share of 6.6% Segment sales grew 18% annually from 2005 to 2007, average EBITDA is 11.37% of salesSegment sales grew 18% annually from 2005 to 2007, average EBITDA is 11.37% of sales

10. Industry Trends and Drivers Data collection and access are standard and routine operationsData collection and access are standard and routine operations Integrated information across enterprises and organized context for decision makersIntegrated information across enterprises and organized context for decision makers Predict and find assignable causes of operational variations.Predict and find assignable causes of operational variations. Disconnected initiatives vs. integrated solutionsDisconnected initiatives vs. integrated solutions Product life cycle management, control system security, and system agilityProduct life cycle management, control system security, and system agility Integration of IT and industrial process controlIntegration of IT and industrial process control Real-time optimization and future planning based on internal and external eventsReal-time optimization and future planning based on internal and external events What-if scenariosWhat-if scenarios

11. US and Brazil Auto Industry US Auto IndustryUS Auto Industry –Sales tumbles from 16.1 million in 2007 to 13.2 million in 2008 –In March 2009, GM, Ford, Chrysler sales fell 45%, 41%, and 39% –Big Three are in surviving mode –GM is pursuing “fewer, and better” strategy Brazil Auto IndustryBrazil Auto Industry –Government support: $4 billion –Tax breaks for manufacturers –16.9% sales increase in March 2009 compare to March 2008 –Future drivers: booming ag and mining sector, 2014 world soccer cup

12. Brazil Industrial Process Control Industry High-end industrial process control suppliers are dominated by companies from developed countries such as GE, Honeywell, Invensys, Siemens, Rockwell AutomationHigh-end industrial process control suppliers are dominated by companies from developed countries such as GE, Honeywell, Invensys, Siemens, Rockwell Automation Brazilian multinational: WEG IndustiesBrazilian multinational: WEG Industies Local system integrators/service providers/consultants: AGNUS Tecnologia Eletrônica, CONCEPT ENGENHARIA E AUTOMAÇÃO, MagnoCorp Automation, SEA Systems-Unicontrol International Ltda, Vision Industrial SystemsLocal system integrators/service providers/consultants: AGNUS Tecnologia Eletrônica, CONCEPT ENGENHARIA E AUTOMAÇÃO, MagnoCorp Automation, SEA Systems-Unicontrol International Ltda, Vision Industrial Systems Local Advantage: Service providersLocal Advantage: Service providers

13. CSI Prospective Major clients in automotive industry: Risks and advantages in US vs. BrazilMajor clients in automotive industry: Risks and advantages in US vs. Brazil Barrier to entry to US. Market: High small business failure rate in US industrial process control industry, culture and costBarrier to entry to US. Market: High small business failure rate in US industrial process control industry, culture and cost CSI strength: low cost provider, retrofitting existing small business manufacturers with CSI process technologyCSI strength: low cost provider, retrofitting existing small business manufacturers with CSI process technology Virtual manufacturing modelVirtual manufacturing model Market: Small Latin America business as potential customersMarket: Small Latin America business as potential customers Cost advantages over multinationalsCost advantages over multinationals CSI is well positioned to take advantage of small manufacturing firm modernization in Latin American region.CSI is well positioned to take advantage of small manufacturing firm modernization in Latin American region.

14. Competitive Analysis SMSM

15. Industry analysis of potential client base SMSM

16. Pricing Analysis SMSM

17. Value Chain Analysis Large Business Operations Medium Businesses Research & Development Niche/focused services Customized solutions for business clients Development of both hardware and software solution Development and deployment of innovative technologies Lean operations with focus on staying small yet agile Outsource hardware production Focus on the software solutions and hardware prototypes International Footprint Consulting services Contract maintenance services Most new business opportunities come from past clients referrals Comprehensive website, yet no English version Word of Mouth referrals Repeat contracts and maintenance after sale No structured sales force team Weak marketing solutions to increase brand awareness The owner is critical driver of the business for CSI Market research Limited market research and analysis both regional and global Further investment into tracking studies, monitoring industry trends and drivers No developed action-planning process identified Sales/Services Small Businesses

18. Segmentation IBIB

19. Targeting

20. Positioning

21. Legal Considerations Regional Governance & CorruptionRegional Governance & Corruption –Corruption among government officials –Transparency International’s Corruption Perceptions Index –Control of Corruption index

22. Legal Considerations Labor LawsLabor Laws –Regulated by collective bargaining & agreements Employer CostsEmployer Costs –Social Security Contribution –13 th Annual Salary –Severance Pay –Vacation

23. Legal Considerations Labor LawsLabor Laws –Regulated by collective bargaining & agreements Employer CostsEmployer Costs –Social Security Contribution –13 th Annual Salary –Severance Pay –Vacation

24. Legal Considerations Copyright, Trademark, & Industrial RightsCopyright, Trademark, & Industrial Rights –Grant of rights CopyrightCopyright TrademarkTrademark Industrial RightsIndustrial Rights –Courts

25. Recommendations CHCH

26. Conclusions