SCRIPT

TEAM Athena

Topic: RoboCanada. Inc

https://youtu.be/R1ofIrvPRIY

We, Athena, gonna choose the best three countries as the new assembly and distribution hub in Asia. And we got seven option countries.

From Global Risk Maps in the ZRR room, Malaysia is closest to the Nirvana Point. Thailand, Russia and China are closer to the Nirvana Point than Armageddon point.

According to the risk development over the past 7 yearsVietnam, India and Indonesia were closer to the Armageddon point all the time. So we can eliminate them.

For Malaysia, both risks declined a lot.

For China, the business environment risk decreased a lot,

while the political & physical risk increasedwhich is due to the increase in seismic disaster risk.

For Thailand, the business environment risk decreased,

but political and physical risk increased, which is due to the raise in political violence risk and storm and floods risk.

Russia had the highest business environment risk among the four countries and the risk kept increasing during the 7 years. The decline in political and physical risk is due to the decline of information infrastructure risk, but Russia still has a high expropriation risk and transportation infrastructure risk.

Based on the analysis, we can eliminate Russia and get best three countries: Malaysia, China and Thailand.

From the global risk maps, we can see the UK and Canada have much lower overall risks.

The risk from burden of government regulation of UK and Canada is little higher. However, in 2014, Thailand has much higher risk. It will cost more to adapt to the governments regulations.For the risk from burden of customs procedures, the risk in China and Thailand is higher. This risk will increase the cost of import and export.The difference of risk from prevalence of trade barriers and from trading across borders between the old and new locations is generally decreased in recent years. That could help company decrease the costs.

For the risks from labors quality, it is higher in China, Thailand and Malaysia. Training and good corporate governance system may cost a lot.For some infrastructure, the risk from three Asian countries is higher. New hubs should cost more to establish risk management system.

Even the three Asian countries seems more risky and costly in many aspects, the recent Asian free trade agreement can help new hubs be more adaptable to the new international trade environment.

The following risks seem high but could be potentially mitigated.

Burden of government regulation is pretty high among all three countries. Facing this risk, we have to accept. But we could take actions ahead to minimize this risk. For instance, a complete and detailed market research help enhance efficiency to be in compliance with regulations. These actions could win governments trust and maybe further cooperation.

Quality of labor is a common problem in Asian, South American and African countries. We could control this risk by bringing along talents and introducing advanced technologies. Subsequently, however, the risk of cheap copies seizing market share may rise immediately.

Effective administration including internal and external supervision could reduce the possibility of corruption and control this risk. Effective Supervisions also contribute to sound development circumstance. But on the other hand, cost more.Seismic Disasters and Storms and Floods share similar mitigations methods. First we try to avoid these risks by selecting vantage sites e.g. far away from junction of plates. However, if other costs, such as transportation cost, at this time, are more significant than benefits brought by vantage site selection, we choose to transfer these risks. According to our research, many international insurance companies including Zurich have products to cover loss happens in natural disasters.Site selection helps avoid disasters at low cost, but probably bring inefficiency; insurance products cost a lot at the beginning, but transfer all risks from future natural disasters effectively later.

Thank my partners. To choose one from these three locations, analyzing interconnected risks is not enough. Other factors need further investigating. Here we have six, based on the theory of Pankaj Ghemawats AAA Triangle.

RoboCanada mainly uses two strategies - arbitrage and agrregation.

In this case, arbitrage is the focus, which means the lowest cost.When it comes to the construction and operation of the hub in this country, costs of tax, renting or buying lands, and dealing with pollution need considering. To get substantial cash flow for inventory build-up, financing cost is also important.

As a part of a supply chain, interconnection between the hub and markets or factories is another aspect. The concerns are transport costs and trade policy issues.

For example, with three markets surrounded, China is the best choice among three.

Since all of them have free trade agreement with Pakinstan and South Korea, and China has one belt one road strategy that benefit trades to Kazakhstan, China is slightly better here.

Taking industrial land supply, price, and policy into consideration, Malaysia looks better. The other three factors also needs similar further due dilligence.

In conclusion, based on results from Zurich risk room, we chose China, Malaysia, and Thailand as possible hub locations. We also tried to mitigate their specific risks. To select the best one, other concerns, such as land cost need further information.

Thats our presentation. Thank you.