Export contract

Dang Huyen-Anh
Illiano Sabine
Richard Kathleen
Snell Kimberley

TEAM 5

1. Summarize

Major investor

Aim to give ourselves completely to the customer

Want to be a leading global company

One of the words leading pure play wafer foundries, offering leading edge
mainstream and specialized CMOS process technologies

Specialized in outsourcing of manufacturing of electronic devices

Plans to expand business into Europe

Committed to growth and customer satisfaction it has the flexibility to respond to

different wafer processing requirements ( has first rate quality management
system)

Mission provide superior quality product outstanding services at competitive price

2 manufacturing plants

120 million turnover in 2013

Capacity of factories : 4M devices per month

2. First conference
What is your aim in entering Europe and now may we help?
What are the activities of your enterprise ?
What exactly is your product range?
Do you already have factories or suppliers in Europe?
Who are your target clientele in Europe?
Do you have competitors in Europe?
What is your comparative position among competitors?
Do you have suppliers in Europe already ?
What is your competitive comparison regarding price?
Are you changing strategy in Europe in comparison to Korea?
Do you plan to bring over a HR team, or employing new staff ?

3. Summarize of interview

The market is divided in 3 parts: 1/3 of volume in Europe, 1/3 in Asia, 1/3 in America (16 mil/yr)

The company had developed business in Asia, in America, so now the global strategy is to sell in Europe

The prices are fixed by the Taiwanese as the dominate the market (demand is bigger than the supply)

Customers will not sign any contracts with Dongbu-HiTek until they have an office in Europe

There is little trust between the European customers and the Asian suppliers, to complete business there
must be a subsidiary in Europe (so that if there is a problem, the case will be in European courts, not
Korean courts)

The company want create a new team of 12 people in Europe for business

STMicro is too small in Europe for the demand

To analyse the European business, to propose the best place and to recruit in Europe in 6 months to start a
new activity in Europe

In Europe the company want to create office and maybe engineering office close to be customer.

Engineers need to be able to quickly travel to the customers if there is an issue

The company have the capacity to produce enough devices for all new market

Sales office will only be profitable if it costs less than 3% of sales

4. Market Analysis
Sales

Starting Phase

Starting/Stable
Phase

Stable Phase

(7X500X5)

((80 000 000+

17 500 000)/2)

80 000 000$

17 500 000$
48 750 000$
IDRAC %

30X1500+500

30X1500+500

0.15%

45 500$

45 500$

120 000$

Risks:
- Dont have enough customers
- The logistic cost are to high
- Payment by Dongbu
- There is a risk we will not meet sales objectives
- The quality of the product may not reach European standards

5. Non Disclosure Agreement

ITEMS Acceptable
1

a,b,c

b,d,c

Risky

9
10

Unacceptable

Incomprehensi
ble

6. Second conference
- 2 planned functions
- Commercial function - for building a relationship between
the business and the customers.
- Support activity - Pre-sales support (discuss and prepare
business contact) and post sales support (quality control
for the customers)
- Dongbu HiTek will pay according to the European rule
(Within 30 days)
- Do not require the purchasing of a building but rather the
renting of offices to house their employees.
- Do not want the costs to exceed 3% of annual turn over
- Willing to approximately follow european average salary
- 1x General manager - 200,000/ 2x Sales persons 150,000/ 6x Engineers - 100,000/ 1x Admin - 80,000

7. Workload
- Market analysis: find the best location, the best country and
city, the cost of life, taxes and laws.(Country Analysis - 2M x D,
analyzing taxes and laws - 2M x D, setting up and agreement 5M x D, visits customers - 10M x D)
- Company creation: find the best building, the bank and sign
the documents. (Legal form 5M x D, location, visits 5M x D,
registration 5M x D, supplies 10M x D, bank account 2M x
D, insurance 1M x D, taxes 1M x D)
- Recruitment process: find the 12 employees (Job description
2M x D, announcement 5M x D, CVs screening 20M x D,
Dongbu interviews 10M x D, labor contract 5M x D)

8. Commercial Proposal
Phase

Delivery

Cost

Market analysis

Recommandation of
the 3 best location
in Europe

19 K + 7 K (travel
exchange)

Company creation

Office ready for

use, registration
and legal form in
the country

29 K

Recruitment process

Short list of 24
candidates, and
labor contract

42 K

TOTAL

20% at order
30% at market
report
50% at market
delivery

97K

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9. Ganttproject planning

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10. Project Phases

March 1st

6 months

August 31st

Market
Market Analysis
Analysis
33
33 days
days
Company creation
42 days
Recruitment process
97 days

= 172 working days

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11. Lettre of Intent

Published: 26/02/15, 8h45
IDRAC Consulting signs letter of intent with Dongbu for expanding Dongbus
business to European market.
Idrac consulting
- Create subsidiary in Europe
- Analyze Frankly speaking European Countries, their market
and economic state
- Be in charge of Europeans employees recruitment process
Dongbu:
- External logistic
- Sell their services from Korea to Europe
- Dont create warehouse in Europe

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12. Memorandum
IDRAC Consulting will set up a European Subsidiary on the behalf of
Dongbu Korea
Dongbu Korea will be the only shareholder in the European market
IDRAC Consulting will conduct a recruitment process and proposal
of the European staff to Dongbu
Dongbu Europe will appoint IDRAC Consulting for the administrative
support for the following 3 years$
This agreement is valid until end of 2018