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- reduce discount level- new market adjacancies- new services - have a plan- demand creation- meet cust expectations
- value selling- smart packaging- use programs to control the discount- efficiency in manufacturing and services
Remember the good old days when • productivity rose steadily,• employment was high, • prices were stable, and • return on corporate assets went down, down,
down?
Deloitte study of over 20,000 publicly traded American firms found that between 1965 - 2008• average return on assets (ROA) declined about 75%• increase in competitive intensity• rapid loss of competitive advantage• leading companies stumble much more frequently
Another study• international review of 1,854 large public companies• between 1988 and 1998 • 87% did not earn back their cost of capital
Strong link between market culture & performance
Source: market culture by Sean M. Gallagher, Christopher L. Brown, and Linden R. Brown, Ph.D.
Market culture describes how “in touch” and aligned an organization is with its environment.
Market culture elements linked to performance metrics
Source: market culture by Sean M. Gallagher, Christopher L. Brown, and Linden R. Brown, Ph.D.
Proposal
� Why Pay Now?
� Deployment + Implementation + Useful Life = Payments.
� Use Cisco’s cash not yours.
� Acquire any Cisco technology, minimum of 70% Cisco products in the total solution.
� Short and medium term payment deferrals with grace periods.
� Products: Extended Payments
PaymentsPayments
20201010PaymentsPayments
20120111PaymentsPayments
20120122
Extended Payment TermsExtended Payment Terms$17,549,06$17,549,06
44$17,549,064$17,549,064 $17,549,064$17,549,064
Total Cash OutlayTotal Cash Outlay$17,549,06$17,549,06
44$35,098,128$35,098,128 $52,647,192$52,647,192
Weighted Average Cost of Weighted Average Cost of
Capital (WACC)Capital (WACC)11%11%
3 year 3 year
InvestmentInvestment3 year NPV 3 year NPV
InvestmentInvestment
Cash FlowCash Flow $52,647,192$52,647,192 $47,602,246$47,602,246
AmountAmount USD 50millionUSD 50million
TenorTenor 36 Months36 Months
Grace PeriodGrace Period 180 days180 days
Interest RateInterest Rate 2.97% P.A.2.97% P.A.
RepaymentRepaymentSix SemiSix Semi--annual annual
RepaymentsRepayments
Savings USD5,044,946 or 10% of Net PriceSavings USD5,044,946 or 10% of Net PriceSavings USD5,044,946 or 10% of Net Price
NPV SavingsNPV Savings TermsTerms
Actual Case
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