It is time to do more, in the realm of global expansion. We wish to do this with exporting first, of our custom built and specialized Super micro servers. The servers would be set up in data-centers all over the world for to host websites, on-line gaming, and on-line data storage. MCHub plans to go into also servicing those servers remotely. This will add income to the company. This report will go to show that explosive expansion is in our agenda. There is huge potential for growth in this market and MCHub stands to make over $3 000, as a conservative estimate, in sales in year 1 of the plan. This report will share our plans to expand to Europe as it fits with the company goal of expansion into all markets, and comes with an acceptable level of risk. Unlike many other Minecraft Hosting Companys that keep all their finances a secret, we are open with our financial documents because we all know what it can lead to. With the fall of Enron, market fallout is at its highest from CEO's. We plan to be fully transparent with all of the finances and plan to incorporate one day as a publicly traded company. IPO Will be soon announced. With that being said, the stability of MCHub during the present period is agreeable enough to expand. MCHub is a small company that is quick to respond to sudden changes in the atmosphere. With plans to be publicly traded soon so there are a vast amount of resources available that can establish MCHub as considerable success in global markets. With over 40 free minecraft server creations since our launch official launch on august 14th, the future looks quite bright in terms of the potential growth. This growth is expected to continue for MCHub. MCHub stock is expected to trading around $5 per share on our Initial Public Offering, although there remains volatility in the market; this shows that MCHub has sustainable growth.This highlights overall great integration of business operations that have retained the market strength at all times. The international business growth for MCHub is expected to incur fewer costs that typical regional expenditures because of the integration with the internet. The World Wide Web provides an invaluable asset for MCHub in its continuing pursuit of gaining a greater market share throughout the global environment.
Evaluation of staff and the organization
The MCHub business has an intelligent recruiting system that has created an exceptional work force with relevant international experiences and capabilities for a reputation for Quality Service that has MCHub ranked amongst the top of the information technology industry. Upon evaluation of the staff for applicable talented yields that the languages spoken by MCHub employees include: Romanian, English, Finnish, Danish. The foreign travel is provided by business class seating through Air Canada planes for quick flights to ensure contacts are satisfied. The education required is a minimum International Business degree and also a requirement of speaking at least two languages for better overall business culture. Staff can definitely be assigned to the exporting project as they will receive tremendous support to pursue better economic output with a budget of $10,000 per project with the equipment being provided at the service point in the form of a server. The employees are trained on the operations of the servers for business purposes and the optimal communication standard in regards to the host country on the global environment. The management commitment is the most significant control feature that is retained by MCHub back at home to ensure that the corporate values and vision are being reached in an appropriate manner. Production capacity, foreign demands, suppliers, transport and contingency plan The plant production expectation levels are set at considerably high standards. The minimum of 64 GB of Random Access Memory for our current and future server purchases. This is to ensure a enhanced ability to continue providing a high quality server for all customers. There is an incredible amount of focus set on technology and keeping it up to date in order to compete with the elite businesses in the information technology industry that seems to keep on increasing its overall productivity levels for success. The foreign demand aspect itself is not a problem as much as it is to attain their business in the first place because considering the crucial nature of MCHub, there will not be any risk on the domestic business activity.
The supplier of MCHub and its servers, NEWEGG.com, is a steady source that continuously delivers uninterrupted service in terms of business equipment and technology. It is considered to be a reliable aspect of the business because of the developed relationship among the interlocked businesses to ensure there is a valid supply of servers. The methods of transportation has encompassed MCHub to develop a worldwide integration through land, sea and air carriers that are ensured to be trusted that could provide the best solution for consumers needs. International transportation is a field of study that can get rather complex so there is a widespread knowledge base among MCHub employees to be sure that any services reach from origin to the destination. MCHub becomes much more reliable with the use of Ethernet cables to process the information from both ends of the spectrum. There a quality contingency plan put into place in case of a disruption. This consists of backup hard drives on backup servers that ensure valuable information is secured and never destroyed. This brings a great deal of conventional wisdom towards the customer feeling like it is an appropriate choice.
Required external expertise
MCHub has built an impressive external expertise network that encompasses all spectrums of the business model for highest possible integration of operations. We always take the extra step to ensure that there is a media rights procedure that will clear IT Specialized from being involved in illegal practices.
Leveraging the on-demand power of the cloud; MCHub will continue relentless pursuit of innovation and knowledge while providing free educational IT learning tools with global reach.
MCHub. was conceptualized on August 1st, 2012 in Toronto, Canada as a for profit endeavor that through time changed to Not for Profit for various community benefits. and is becoming incorporated in the following months. Our primarily supply of web-based servers which provide the following services: Game Server Hosting with extreme memory usage, and high hard drive usage, SQL Server Hosting with mild memory usage, and mild hard drive usage, Website Hosting with minimal memory usage, and mild hard drive usage, and Voice Hosting with minimal memory usage and minimal hard drive usage. When the company was envisioned, in 2012 by Sever Neacsu, it was known primarily for its minecraft forums hosting, providing space for clients on their servers to communicate with the staff and appeal their bans as well as report Admin abuse, which is a very serious problem within Minecraft.
Through the knowledgeable fund-raising skills of Sever Neacsu, MCHub was able to raise $5000 for the initial start-up. By the time the server was ready to be placed into a data-center, after being successful as a website host, they were working on development of SQL server hosting and voice hosting capabilities on their servers. By July the company had incorporated these capabilities into their servers and had also introduced Minecraft and Tekkit game server hosting to their offering. With the level of competition that they faced MCHub knew that they needed to provide other services on their servers to maintain their competitive position. In September 2012, they began to initially offer free Minecraft and Tekkit servers as a way to test the grid and the automated systems while rewarding their customers for helping beta test the system. Major data-centers throughout Canada such as in Montreal and Vancouver are on the horizon and will be targeted and deployed as a way to disperse our content and spread our server load. By early November 2012, it had seemed that the opportunity for growth in the domestic market of Canada was becoming limited and so our intention is to expand to more areas in Canada and Europe. Exporting servers into major data-centers in the United States, in areas such as New York, Chicago and Los Angeles were swapped for more remote areas such as Finland and Denmark. The decision to first move the servers into Europe was a safer move with the cultural, economic and political similarities between the countries. Major data-centers in Europe, Germany, England, Romania, Russia and France will be deployed on first. A major benefit of putting the servers into major data-centers in other host nations is that MCHub can control the computers using remote control access, meaning that they can control the computers from Canada without needing to be in those host countries. Research that has been conducted determined that the Asia-Pacific, particularly Singapore, shows great potential for growth for MCHub. When considering the exporting of the web servers into the United States, Europe and in the near future, Asia, MCHub. has conducted a SWOT analysis to determine first whether or not the company is suitable for growth in other markets based on assessing company strengths and weaknesses that could impact the possibility of success in exporting and then assessing the global marketplace and determining which markets are the most attractive and have the most potential and which markets do not have a strong demand for the offering. This also includes looking at the markets in terms of the competition that would be faced. Consideration is also given to the export market environment, logistics and distribution and to the similarities in the environment in terms of cultural, economic and political institutions. The markets that are considered to be most desirable are then visited by executives to get a better understanding of the market being considered.
The company is structured as a corporation, planning to incorporate in 2013. A major benefit of being a corporation for the company is that it is easy to raise investment capital through the issuing of shares to investors. This gives them more financial flexibility when making decisions and pursuing opportunities. While the company currently exports, they do not have any subsidiaries, affiliates, joint ventures or strategic alliances at this time. MCHub. feels as though they do not need to use any of these other market entry approaches at this time because they believe that they can export their servers into these data-centers and be able to control the computers remotely and have a level of control over international activities that is uncommon in exporting. This is because usually the reason to pursue any of those other options is in order to have more control but MCHub. feels that they have enough control through exporting to be satisfied with using this form of market entry exclusively.
Sales/Revenue/Financial Stability overview
After analyzing MCHub’s financial statements from the founding of the company to the ending of the most recent fiscal year, it can be seen that the company experienced quite rapid growth in the first 4 years of operations before growth began to slow in 2009, leading to growth being accomplished through exports to the United States and later, Europe. At this time, exporting activities contribute to 17% of the company’s sales and 9% of the company’s profits. The percentage growth of export sales is 16%, with overall growth at 23%. The percentage growth of export profits is 8%, with overall growth at 13%.
Goals and Objectives
Some of the Company’s overall goals are: To provide high quality web servers to the market To grow the business to become a leading provider of web servers To continually increase revenue, profit, and market share To develop a reputation for having high customer satisfaction.
Some of the company’s overall objectives are: To increase revenue by at least 10 % annually, To achieve a consistent customer satisfaction rate of greater than 85%, To increase market share by 5% within the next 5 years To make improvements each year to the servers to improve and maximize peak performance.
Exporting activity is a major contributor to achieving company goals and objectives because with limited growth potential in the domestic market, growing the business in terms of revenues, profits and market share is achieved through exporting the servers to datacenters in other markets that have demand and provide the company with a great opportunity to grow.
Domestic and International Products and/or Services
After MCHub establishes in the 3 basic markets, Minecraft, Voice, and Web, they will be researching and finding new opportunities to explore. The research and development section will be working on creating new scripts and optimize current java environments to pull every ounce of potential from the servers. MCHub will spend approximately 10% of the profits into research and development. This will help find the best servers hardware for the specific task as, the oncoming Internet age is one that is going to take the industry by storm. With Amazon at the forefront of this endeavour, Cloud Technology has only just been conceived. The aspirations of everyone for this software are great. MCHub has extremely high expectations as well, but with every new product comes a long learning curve with a lot of money being dumped into Research and Development. The price of the service will be high as the company recovers its Research and Development costs. This is a price that fortune 500 companies are willing to pay in order to take advantage of the features the Cloud has to offer. As MCHub will not leave any stone unturned for an opportunity, this is definitely not a chance they are going to easily avoid, as the payout is far greater than the time spent with R&D. With the development of MCHub’s blend of the technology, there will be incurred fees as they will have to secure new patents and intellectual property protections.
New Foreign Marketplace Analysis
Rationale for Exporting
The rationale for exporting is simple. There is an abundance of technology and hardware in Canada. One of the leading processor makers, AMD, is headquartered in Markham, Ontario. With this rich resource and neighboring Technology powerhouse, USA, production of servers can be done effectively and efficiently. This provides MCHub with a higher comparative advantage in production of these products. The goal is to provide servers that are of high quality offered at low price and the objective is to take over all markets. MCHub currently has established presence in the United States and UK. The goal to move into the Asian market is one that aligns with the overall goal of having presence in all markets. Being the first in a market is very important as it allows MCHub to lead the way for others to follow.
Rationale for Selected Foreign Market
MCHub’s selected foreign market is one that is prospering with on line connectivity. As their culture is very connected and intertwined, so is their on-line presence. As they show large interest in on-line massive multi-player games, there will be an ever growing demand for server hardware. New on-line only games such as Minecraft, and all of Steams ever expanding game database, requires third party and independent hosts. The launch of Minecraft has been an epic milestone for all independent games that operate through the Java(tm) platform. Java 7 which is currently still in beta, will revolutionize online connectivity and productivity through the introduction of Cloud. Regional specifications and laws of physics restrict connectivity speeds over vast distances and that is why it is important for companies to setup multiple interlinked servers across the globe or invest in technologies that Akami patented. Akami is a company that sets up servers to act as median nodes that will reduce bandwidth stress. It works by saving most accessed pages such as Google, Facebook, and Youtube into cache so the information doesn't have to be queried from the actual servers. This greatly increases bandwidth speeds.
When analyzing the political landscape, the People’s Action Party (PAP) has held dominance in Singapore since its conversion to sovereignty Singapore is a great place for business. The political structure has 6 levels to it. The type of government is Sovereign but can also be seen as socialist (Taylor, n.d).
It is very stable in the sense that it has many levels and change comes slow. Top international law firm Norton Rose cites Singapore as number 1 in the Asia Pacific region, for having a regulatory environment that encourages financial service companies to do business (Singapore Startups, 2010). With the regulatory environment as sound as it is, it will insure that corruption is at its minimum. It is vital for MCHub to have a good legal system as they will not have possession of the servers after they leave the warehouse. Without a good legal system, they could not recover any lost funds from the foreign host. The taxation system is in favor for exporting from Canada, as Singapore has a double-tax agreement to prevent double taxation (Singapore Tax Structure/Tax System, n.d). Since the approach to Singapore is dual-prong, MCHub will look at the GST for Services and Goods. Currently goods are taxed around 3% depending on the good and companies are taxed 26%. Singapore is one of the most robust port nations in the world sound infrastructure and is a business hub in China. (Urban Re Development Authority n.d) Singapore is a country similar to Canada in the sense of multi-diversity, Singapore is multicultural city (Singapore Expats, n.d). Analysis of Singaporean markets shows that companies specialize in importation of products such as: leather, watches, and mineral ores. MCHub is going to be selling to a company called Liquidators Inc. stationed in Singapore. They handle surplus bulk lots and distribute it. They are exactly what MCHub needs to get the export business off to a start in Singapore. MCHub will have to make sure to keep a good relationship with them in order to build trust and become home to their culture. There will also be businesses that will handle a select few servers. They will be Data-centers specialized in handling maintaining and recovering lost machines when MCHub employees cannot physically get to the unit. There will also be local people there that we will gain the trust of that can be helpers to escort the servers to their end point destination. A local person will be a crucial link in this operation that MCHub will need to secure when they send their international employee.
There are minimal competitors for server importers. Not every Minecraft/webhosting company has servers setup in Singapore. This is a niche that needs to and will be filled. In order to discover all the computer hardware importers MCHub must actually make a physical presence. The demands is going to come from the root up in Singapore for MCHub services, this will give them a competitive advantage as they will have to spend minimal amounts on advertisement.
Strengths Intellectual Knowledge (the know how to setup a business/subsidiary and control remotely) Hardware Cost Advantage (no paid tariffs for equipment) Diverse Team with complementary skills and strong suits. Entering New Market at its conception (possibility for large sustained returns)
Weaknesses Culture Shock Time-zone switch Unable to control Exchange Rates, forced to hedge Remote application (Teamviewer) could fail or go down Must rely on remote crew to take care of the server(Less control, more financial risk)
Opportunities Secure new emerging market Set the way for everyone to follow (MCHub can charge whatever they want) Gain large amounts of connections locally
Threats Competition from multinational web server corporations Competitors could have better server software to control servers More unscheduled downtime as MCHub is using unsupported free Operating Systems. Insurance problems Product could get held at the Singapore customs.
Stationed in Singapore, are existing manufacturers of motherboards and some components that are needed. Asus (a motherboard maker) is a multinational company and is stationed all over the world. If MCHub purchases their motherboards from them in Singapore, there could be substantial import tariffs and taxes, but they would still need to import computer processor chip components that are created solely in Canada and the United States. The marketing will be through websites mainly. MCHub will establish a web presence and get people to go on their site from the Minecraft forums as they are a web host for this service. Users will see that MCHub has servers in Singapore and if they are from there they can choose to use those servers and save on taxes from purchasing services from different countries. If you purchase a service for hosting in Europe from Canada there is a 27% VST that you must pay on top of all other taxes. This is to promote local setup of services. This is something MCHub is well prepared for as they will be using Team-viewer software and Putty to communicate through SSH to their Linux Machines. This is all done remotely, and most importantly securely. MCHub takes all major credit cards, and payments will be done through PayPal, an international On-line bank.
Market Entry Strategies
MCHub Hosting is currently established in 3 Markets: Toronto, Philadelphia, and London. Servers have already been setup in Data centers in Philadelphia, United States, London, England, and Toronto, Canada. MCHub have numerous strategic alliances and joint ventures. Strategic alliance in the U.K. (London) has been established with local, Cameron Jiles. The company already has been business partners with him on personal bases. He is the local specialist in England. With culture shock being something MCHub want to keep to a minimum, the corporation does not send the ex-patriots abroad. Rather MCHub recruit young talent that has skills complimentary to the strong suits. To be specific, the specialties are International Trade, Business Management, Marketing Analysis and Deployment, and Financial and Legal Analysis. MCHub require I.T. Specialists and would like them to be locals in the specific regions MCHub are exporting to. The production of the servers will be done in Toronto, Canada, nearest to the biggest Technological Processor Manufacturer (Intel Corp), among all the locations and also home to the up and coming Juggernaut 8 Core Processors. (A.M.D. Server Processors). Their headquarters are situated in Markham Ontario. With this proximity of resources it makes sense to purchase all of the raw products from Canada, and export either finished products (Servers) or the individual components to the partners for them to manufacture. At first MCHub will produce all servers in Toronto, and then ship the complete product. Once MCHub have a demand that exceeds the supply MCHub will ship the individual components or raw goods to the joint ventures’ and have them install them. The team is experienced in handling primary and secondary market inputs as well as stat scan analysis and world analysis. MCHub will not move into any markets if the numbers do not tell them it is feasible, that the orders are strong enough to sustain the deployment costs and increased costs from handling more Nodes. It will require stronger incoming revenue to sustain the costs of hiring more staff to handle technical support and live support. Even though MCHub are using entirely free-ware operating systems, and one of the partners is covering the expenses for the scripts to handle the servers, the income of deploying into Asia will be worth the costs by a long shot. Once MCHub have a foothold in Singapore, the Asian port, MCHub can deploy 3 fold out to other Asian regions that lack cutting-edge technological internet resources, that MCHub will provide. The low latency that many gamers require will be the plan and MCHub will build all of the business practices, from scratch, from that philosophy.
Target Customer Profile
The customers, since the services that can be provided are theoretically only limited by the physical hardware at a current, location, is vast. The customers could be as young as 8, purchasing through their parents (indirectly) or 16+ that could be securing a server for themselves to host a website or a game. With technology being a lot of peoples second language, MCHub will find that a lot more people are going to require web servers, business are going to require SQL Servers, and rapid deployment Cloud solutions as well as not to mention Website design and hosting, Voice server hosting (useful mainly for games, and business meetings) A lot of the newer games that are coming out require you to host your own server in order to play with your friends, and sometimes I.S.P's block people from doing such, these people will need to pay a server company for hosting in order to host a server. With Internet bandwidth being at its cheapest cost ever, placing a server in a data-center has been at it all time lowest costs. The buyers will be people that are IT Business Specialists purchasing equipment either as a Broker working for a firm, or an independent broker. Since high-tech server technology is not produced in many countries a lot of it needs to be imported, therefore there are many facets and places to sell products in Singapore. MCHub will look for a local person there that MCHub can trust to take the physical hardware from the shipped location to a Data-center in the heart of the port city. Singapore is a very technologically rich state that is home to a very eccentric society that thrives from MMORPG’s (Massive Multi-player On-line Role-playing Games) such as Lineage and Lineage II. This is a nation that grew up in on-line games, and for them to switch to playing single player off-line games is a hard one. They are a very connected state and everything is intertwined there, so is their gaming practices. Lineage II Being a MMORPG requires a very strong server team behind them that charge monthly fees for the service. The reason is that servers are expensive and the costs to administer them can become quite costly as well. Routine maintenance must be performed on the hard disks if they are not Linux partitions. This will provide gamers with a sluggish play, which many will be reluctant to continue using. There is a huge demand for this type of resource in Singapore, and the company having a specialist in every field that is needed to setup a business, will achieve just that. Companies such as online game companies or business will need these machines in order to keep up to date with the latest features that hardware brings in order to streamline their work at a more rapid pace than before. If all their competitors have the fastest core on their computers, the must compensate and get the same core or else they will be left behind in efficiency and effectiveness. The business specialists will need to tap into cloud technology. This will save their business tremendous amounts of costs in licensing fees, deployment, testing, and programming phases in their production chain. With VMware (virtual machine software) reaching its patent period, it is free software for anyone to use. VM operating environments will save costs on electricity, and also time because they only have to install a program on one computer, instead of hundreds. The purchasing decision makers will be the people high up in the business corporation hierarchy that will see the benefits from Clouds (streamlined content accessible anywhere or on the go) and also more rudimentary IT needs such as setting up a SQL Server. With technology expanding as rapidly as it is, there is always going to be newer needs and demands from the ground up for P rebuilt Servers and Server Components. End users of the servers is a very wide spectrum any one from kids playing with their friends after school, to business executives, IT Gurus, Schools, Government, and Social Services branches of Other Nations. The company demographics that MCHub are selling too are very vast. Distribution Companies, brokerage firms and individuals and middle men are amongst the organizations and individuals that are potential end users or purchasers. The purchasers are going to be the most important person in the deal. MCHub have to find out who is going to pay us. The market size is immense right now. The people of the world are connected at an all-time high and millions of people have internet access abroad. The demand for small-business websites is going to sky rocket abroad as proliferation will be much quicker in developing countries than already established countries with existing data center infrastructures. Therefore MCHub will find themselves exporting to Asia because of the rapid growth potentials.
New foreign market product and service descriptions
The end user will be able to host websites for people in their region. Since the delay that Internet signals are sent tend to lag the farther the server is from the user, the need for localized servers is crucial to having rapid website response, latency (people with slower Internet will have worse lagging problems), and game ping and response times. Therefore enthusiasts would see the need to purchase a slot in a server for their own use. IT Specialist, whether they're free lancers or in-house, will constantly is upgrading equipment in the organization. Every year there is a new release of hardware that renders everything in the past ancient. There is no telling how much more proliferation of technology that will occur in the near future with the new nanometre milestone (.35nm) die size. This allows processors to contain more cores and produce less heat. The reduced heat allows them to run much faster. When one competitor has the latest technology others will be quick to follow. The Cloud system that is being developed by Amazon is in its infancy. It has the potential to revolutionize how MCHub does business in the near future. It allows people to access their data from anywhere. For piracy, it allows people to purchase licenses for music and let them stream content seamlessly as opposed to downloading and owning it. The possibilities are endless for the Cloud. In order to take advantage of this new internet medium, people will need server hardware.
The preliminary analysis has found favourable marketing conditions. There is relatively minimal competition for Minecraft type servers in Singapore, with only few competing hosts currently, opens up a huge opportunity for MCHub hosting to export servers and charge a premium for newer and faster server rigs. This niche will give a foothold in the Asian market and allows MCHub to be specialized in handling Minecraft specific servers. This niche has been recently created with Minecraft's (Multi-player Sand-box Game) release on November 18, 2011. The official opening of the game with its 4 million registered paid members, with minority being from Asian countries, allows large rewards for entering this market. This is a new product that can allow MCHub to setup services after the export. Since it is a new product, MCHub has the entire life cycle of it, and all associated services to ride out. Associated services are things like a website, MySQL account (essential for Minecraft.), voice server (Team-speak). MCHub products are going to be raw products. The modifications are going to be to create the most optimal rig for handling high server stress and load that comes from hosting Minecraft servers. Raw product kits will contain but will not be limited to: processors 16Core AMD case power supplies 128GB DD3 Ram server type motherboards
They will come equipped with pre-installed with Free-ware CentOS 6.0 (Red Hat Linux Enterprise Server O.S. Software). The chassis is going to be a Half-Rack size. This is designed to keep weight, size, and heat at a minimum. This is beneficial for keeping the shipping costs at a minimal. Furthermore when they reach their final destination, which is going to be most likely a data-center, the monthly fee per server is going to be based on the physical dimensions of the server.
The products are going to be generic looking. All the individual components are green with the case being a steel chassis; it is not very colourful at all. That’s where the third-party painters come in. Jet black paint on the cases will be sprayed by Versatile Spray Paint. They will provide assurance to the security of the merchandise as they will be pre-installed and built before they are shipped. The case will provide extremely good resistance to the forces during an ocean venture. All the products are going to be of the best quality that MCHub can attain. The Life-cycle of a server will be determined by the life span of its quickest failing part. The CPU fan (5 years lifespan) and the hard drive (3-5 years max lifespan) if the hard drive is a solid state one, and then it could be even less time. These components can be replaced and with hard drives being as cheap as they are they can be cheaply replaced in Singapore. The server popularity grows in the summer months and during holidays as majority of Minecraft's user base is under 18. A large portion of the societies that have disposable income that MCHub are targeting; have mandatory schooling for children. This can be counteracted by the prosperous summer months, and websites which are in demand year-long. There minimal intellectual property rights whatsoever that MCHub have to worry about as all the components that MCHub use to operate the servers are free-ware or unlicensed. McMyAdmin (a Minecraft server control utility) costs 15 dollars for a single license and 35 for more than 3 servers and Putty SSH is completely free (can be used to remotely access servers) The server control panel which will handle the billing and support is open source and free for everyone to use. The website design and development is going to be done solely by Sever Neacsu.
The export costing analysis is going to be the following, 1000 units are going to be shipped to Singapore, and the cost of all the components needed to produce a server will be $700. The labour will be put in by Sever Neacsu which is going to cost the company $10 /hour and it will take 1 hour to produce 1 server. Shipping is going to cost $50 + $75 additional for $1000 coverage. So it will cost $825 + 26% (Import tax MCHub have to pay to Singapore customs), = $1039.5. This will be the cost to produce a unit and ship it with insurance to Singapore. The pricing technique will be price skimming as they do not want to stray far from the grain. It is apparent that every year a new server is released. MCHub has no choice but to capitalize on this fact. As MCHub wants to capitalize as much as possible on current technology Before the newer version comes out in a few more years. It is this philosophy that the technology sector is built upon and suit must be followed.
Sales and Promotion Strategies
The Market budget will be placed mainly the net, with some direct mail to the best customers. MCHub want to keep the costs to a minimum in order to earn the highest returns. Internet advertisements are effective because there are so many variations to the pricing schemes. MCHub are going to use a known publisher and advertiser marketplace: “CJ.com” To handle all of the advertising needs. MCHub will have multiple penetration schemes such as direct mail in the form of e-mail. Even though the response rate is around 1%, those people will be very likely to be repeat purchasers of the products. MCHub will also have pay-per-sale scheme which gives a referrer 15% commission on the sale. MCHub will also have pay per click (.005 cents) and pay per impressions (1 cent per 1000) as well. MCHub plans to host a trade show where they will invite all hardware manufacturers as well. This is going to be a networking time as MCHub will build relationships and meet crucial contacts. MCHub are going to have a promotional $10 / GB for a Minecraft server for a special until MCHub reaches 50% capacity on the first server, and then follow a more bearish pricing plan. For the exporting operation, MCHub will issue a 10% discount if the person pays before 10 days of the payment deadline. The website will be setup to ensure a professionally geared web-site. All of the insurance is going to be handled by the shipping company that handles server voyage from the ports in Toronto, to Singapore, their final destination, and it is from there that responsibility gets switched from MCHub to the Singaporean importer. All servers are shipped OEM without support, only support that is given is the LTS (long term support) that is provided from the OS, CentOS for another 10 years. If the goods are damaged, or there is a need for return, the items have to be inspected by police and a police report filed. Ownership must be determined and charges must be filed for restitution of the lost funds. There will be no returns for working units, unless the importer pays for the costs of shipping. MCHub will have a support website that will feature a live-support where people can reach the staff and chat with them live at any time.
Logistics and Transportation
International parcels shipped with Canada Post on surface will take at most 6 weeks. They will get insurance on our parcels from Canada Post for a fee. This will allow MCHub to gain up to $1000 insurance on the product in case it gets damaged on its route to Singapore. Since the products are fragile, there has to be insurance coverage. There is no guarantee that the products will not be tampered with on an ocean bound vessel to Asia Pacific with all the recent natural disasters, like Tsunamis, that have occurred there. The time-line is going to be as such; after orders are received production will be begin. The facility currently can make 5 servers per day, so the order will need to be started a month in advance of the delivery date. After a contract has been signed for the products, and have the bill of lading from banks assuring the products actually do exist, they are ready to package and ship. This will take approximately 5 Minutes per server. MCHub is going to make sure to use padding in the packages and to ship the packages securely in order to make sure that the components do not get damaged in the voyage. A nuisance like ram getting pulled out of its slot can cause the motherboard to short out on start up. The actual shipping time after our product has left MCHub, and is in the hands of the postal company, is 4 – 6 weeks. After that MCHub must wait another 3-4 days for the local postal service to deliver the product to the nearest data-center, or end-user. After proof of receipt of their goods is received, the voyage has come to an end. The goods will be FOB meaning they are free on board. This is the best option for MCHub because they are new to the business and want the most customers. MCHub believes paying the shipping costs will give them an upper hand in securing some greatly needed initial sales that could potentially in the future flourish to a long and prosperous relationship. Since the servers are being manufactured half rack in size, that means they are barely 3.5 Inches in height therefore you could stack a lot in a small area, allowing the area in employee’s apartments combined, to hold all 1000 units. Weighted average inventory cost determination system will be used, which will allow judgement by employees to uphold the best representation of current inventory value and cost. Insurance is very important to MCHub distribution. There will be advanced coverage of goods from Singaporean and Canadian postal servers that will cover $1000 in value, which is the server sale price.
The method of transportation will be through surface parcel. Usually this will mean boat. This is the best option as the products are very dense and heavy therefore transporting them by air is not economically feasible option. Customs brokers or freight forwarders will not be needed currently as it is small operation as of now. MCHub documentation will be posted on every package or parcels they deliver. It will state Business Name, Business Address and full return address, as well as the destination address. MCHub will have to get a document to import into Singapore that everyone must attain, and are currently in the process of attaining it. The visit will be temporary just to bring the servers to the locations, setup some networking fields and meet some people that we can be trusted as local entities. The customs strictly monitors food imports mostly banning beef imports but there are no import restrictions on technology and electronics, which is crucial besides the GST placed on the goods prices.
Dispute Resolution considerations to address in sales contract
To ensure that appropriate legal measured are in place for MCHub to operate without stiff punishment, there is a lot of attention focused on preventing these types of incidents from hindering business from an international law perspective. The main service that will be integrated into MCHub is beyond all knowledge that forces users to agree to disclosing arbitration that may be binding. They have selected an arbitrator from the National Arbitration Forum to represent the company in compliance with the rules that are rendered to decide the appropriate justice. (Nuvio. n.d)
The law of contract is under traditional contract law that binds both parties towards the common objective. There are many offers from MCHub that are accepted by customers that are located in a variety of different civil jurisdictions where there may be discrepancies amongst the type of laws integrated within the business system. There is a contractual agreement from both parties that effects the due diligence procedure in regards to the appropriate amount of consideration portrayed to the topics within the agreement.
The venue for law enforcement activity is done in the Silicon Valley where the largest information technology business activities occur on a daily basis. Attornment in regards towards the binding decision on behalf of the arbitrator applies to both MCHub and the plaintiff or defendant in the court of law. The method of securing payment is done through local collection methods including cheque, debit or credit information prior to sending the equipment out to the destination.
The main language that will be used to bind the parties to the selected sales contract is English because it is recognized as the universal language of business and is the second most common language spoken by people in Singapore. (Central Intelligence Agency, 2011)
Contract terms and Conditions
Incoterms 2010 has 7 rules that will be integral for the success of carrying out the contract. For any mode of transport MCHub will make sure to follow Ex Works (make goods available in Asia), that there is a free carrier (delivery to Singapore) to handle that kind of responsibility, that the carriage paid to (Asian customs), carriage and insurance paid to (Asian authorities), DAT – Delivered at Terminal (Changi Airport Terminal), Delivered at place (Singapore) and final rule is delivered duty paid. (ICC. n.d)
The currency of payment is in Canadian dollars and the exchange rate provided for Singapore customers is 0.8 SGB per $1 CAD. The method of payment is through open account, documentary collection, letter of credit and also the ability for cash accounts. In order for the most efficient measurement practises of business practicality and development, there are consistent audits taking place every 2 years that makes sure that the standards are high and being met with relative success. The quality standards are monitored daily at the production site to ensure that the MCHub brand is not tarnished. The insurance is provided by the shipping carrier to whom is giving a premium package, to ensure that the product does not get damaged. The servers itself are warranted for 1 year although there is a special enhanced warranty that the customer may purchase that will make sure that the server has a lifetime guarantee to keep up with consistent speeds and never fail in crucial events.
Product liability considerations
The product liability considerations must be precise because Singapore is exceedingly developed in the information technology and communications infrastructure. As MCHub is a multi-national company that is entering foreign territory, there must be a concentration on the impact of business activities onto the community such as using cheap labour, which may portray mistreatment by people in hosting business country. It is sensed that MCHub will be more favoured in the capital markets, taking over the small businesses and just corporatizing everything that was local. The employment regulations must be followed by MCHub who provide employment to the citizens in the foreign countries so foreign exchange rates and transfer technologies are also a key of product liability considerations.
For successful servers exporting to Singapore, MCHub must adhere to the Intellectual Property Office of Singapore that has been setting the law on intellectual property rights since 2001 for the government. Their role is to administer the intellectual property laws in a proper manner and ensure that the public is aware of the laws. Since the nature of MCHub relies on intellectual property located on its servers for business operations, it is especially important to gain awareness on exactly the types of protection that is required in this foreign market to maintain ownership successfully.
Sales Agent and/or Distributor agreements
MCHub will allow for termination for cause meaning that the cause and responsibility does not need to be argued in the court of law in the case of a disagreement. This protects MCHub from complex legal cases. By avoiding nasty legal battles, sales agents can keep customers happy with more focus on their duties that come with territory rather than just hustling for commissions while avoiding consu
mer’s intrinsic and extrinsic needs.
Facility and Equipment Requirements
Packaging will be needed for a few things in order to begin export. Packaging (includes bubble wrap) $5000 Truck 9,000 Gas 1,000 Storage Warehouse Rental 5000 Car 1000 $21,000
Financing has been attained from Export Development Canada (EDC) at the amount of $1,000,000 to fund MCHub endeavours. MCHub is paying off this debt and keeping up to date with payments.
Even though the country’s politics are handled by a Sovereign Government, it is more Socialist than anything. The country has extremely high Political Hazards from .94 to .97 in 1992 and 2006 respectively. (Delios, Beamish, & Lu, 2010) Despite the fact that Singapore has always encouraged foreign trade, it is perceived as having unfair trading practices. The Main party that resides there won a majority of the government and is still in house today. It is seen as a very stable country, one that poses few risks, and has a positive environment of business setup. MCHub will ensure all of their servers that are shipped with Canada Post Advanced Coverage with coverage of up to $1000 to protect against damage that could occur during transport. Large amounts of hard drives are being exported from Singapore. This shows that they are a technologically knowledgeable society, has the power to compete internationally, and is inviting trade.
The commercial risk will be kept at a minimum. Proper documentations will be the guide to a proper resolution. The bank will be the surety for the exported items. They will assure the importer that the goods actually exist. Without the Bill of Lading, the export will not happen and the importer will not accept the order. These safeguards prevent a majority of the commercial risk of doing business abroad. MCHub will run credit checks on the companies they plan on exporting to as they are going to be paying the shipping; they want to make sure that they will be able to make the payment within 30 days. An account will be opened for allowance for doubtful accounts. This will allow MCHub to forward the account to a creditor for further investigation. The terms will be agreed upon prior to the exportation of products and activation of services. This will allow MCHub to prevent delinquent accounts from being created in the first place. There will be specific terms stated about the location for legal disputes: arbitration and if need be, MCHub will take the matter to Canada’s International Courts.
The exchange rates will provide a risk to MCHub. This will be contravened with hedging, and money market hedging will be tested for feasibility. From money market hedging MCHub will borrow and lend in Singapore in order to retain the value of the currency by deterring the changes that happen naturally between 2 floating currencies, and inflation.
MCHub will do quarterly reminder sessions where every employee can be reminded of the most important procedures and objectives, goals, and future plans. The reason for this is that it is important to align everyone’s work in a complimentary fashion. Since MCHub has expanded to a large corporation there will be communication risk. MCHub will find it harder to communicate with all the branches and get everyone on the same page. Time zone differences add to the risk. The production of the servers could get stalled if the suppliers run out of a component, and an order must be placed from an online merchant where time will be wasted.
The market in Canada can suddenly improve and MCHub could have a lot of their units in a Warehouse in Singapore or already sold to Liquidators Inc and they will not have enough supply. Furthermore if MCHub gets popular, there is always the risk that the supply will not meet demand and will ruin MCHub’s goodwill. With the modifications in demand from the Asian Pacific regions, modifications can be made on MCHub’s servers. They will be shipped to the hottest market at the current time in order to prevent a plateau in sales.
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(C) 2011 MCHub
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