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The Road to Document Imaging in South Africa

The Road to Document Imaging in South Africa. Chelsea Tucker  Marie LaRiviere  Jayana Cali  JJ Mulwanda  Benjamin Skidmore. South Africa FDI Assessment: Go.

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The Road to Document Imaging in South Africa

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  1. The Road to Document Imaging in South Africa Chelsea Tucker Marie LaRiviere  Jayana Cali JJ Mulwanda Benjamin Skidmore

  2. South Africa FDI Assessment: Go • What:Pursue a market seeking subsidiary in South Africa (RSA), providing document imaging services to government and healthcare entities • Political:RSA is a democracy that is friendly to foreign investors and looking to develop economically • Independent Central Bank: Independent yet influenced by ruling party. Still, sufficient degree of policy stability • Economic:Growing economy; improving infrastructure; expanding from summer 2010 World Cup preparations • Currency: The Rand is free floating. This implies currency risk, but historic valuation trends make currency risk important but not preventative for entry

  3. Porter’s Five Forces Analysis • Potential Entrants • Low saturation rate will attract entrants • Kodak has first mover advantage versus US entrants • Various local players already in the market • Supplier Bargaining Power • Kodak has a strong brand and global distribution network • Kodak is susceptible to supplier risk due to high level of outsourcing • Buyer Bargaining Power • Kodak has a history of strong relationships with clients • Political risks with foreign investment • Economic risk with recession and potentially low demand • Threat of Substitutes • Traditional document storage: filing • Option to use a Kodak Independent Software Vendor or Reseller

  4. The Digital Imaging Market Strong South African Market Potential Overall market related risk: LOW Current saturation level: LOW Growth potential: HIGH

  5. Financial Considerations/Projections We developed a range of projections based on high and low end expectations. The following is our conservative (low end) eight year estimate of potential performance 5

  6. Key Risks to Achieving Financial Goals • Financial • Economic translation risk • Intellectual property risk • Currency exchange rate fluctuations • Market share growth estimations • HIV/AIDS pandemic • Political & Technology • Political/Corruption • Internet • Recurrence of Electricity Crisis • Human Capital Flight • Scale Economies • Process Improvements As in all new business ventures, an overarching risk is one of Execution: Even the best plans can’t bring themselves to fruition - if we can’t execute the plan, we will not be successful in this Emerging Market! 6

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