RISK MANAGEMENT SEMINAR BY PHOENIX Ltd

Presented by:

Professor : Jean-François David

Annar BADRUDIN Corinne D’AMOUR Gabriel GALVEZ Hanane HADDAD Olga OVDIY Van-Dat TRAN Wang Qin XU

AGENDA

AGENDA ................................................................................................................................... 2 I. SUMMARY ........................................................................................................................... 3 II. METHODOLOGY ................................................................................................................ 4 1. MARKET STUDY .......................................................................................................... 4 2. PROCESS........................................................................................................................ 5 3. PLANNING .................................................................................................................... 7 III. THE MARKET ................................................................................................................... 8 1. THE ENVIRONMENT ................................................................................................... 8 2. COMPETITIVES FORCES .......................................................................................... 11 3. PRODUCT LIFE CYCLE............................................................................................. 13 4. POTENTIAL TARGET MARKET .............................................................................. 15 IV. OUR INSTITUTION ......................................................................................................... 20 1. SWOT ANALYSIS ....................................................................................................... 20 2. THE MAIN CRITICAL SUCCESS FACTORS OF OUR INSTITUTION: ................ 21 V. PROJECT PRESENTATION ............................................................................................. 24 1. VISION ......................................................................................................................... 24 2. MISSION ...................................................................................................................... 24 3. OBJECTIVES ............................................................................................................... 24 VI. MIX MARKETING ........................................................................................................... 25 1. PRODUCT .................................................................................................................... 25 2. PROCESS...................................................................................................................... 28 3. PRICE............................................................................................................................ 30 4. PROMOTION ............................................................................................................... 30 5. PLACE .......................................................................................................................... 30 6. PEOPLE ........................................................................................................................ 31 VII. FINANCE ........................................................................................................................ 35 1. COSTS (per year) .......................................................................................................... 35 2. BREAK-EVENT POINT AND PROFITABILITY ANALYSIS ................................. 37 VIII. FORECAST..................................................................................................................... 38 IX. FUTURE OPPORTUNITIES ............................................................................................ 38 REFERENCES ......................................................................................................................... 38 APPENDIX .............................................................................................................................. 38

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I-

SUMMARY

Phoenix Ltd. is part of the executive training department of Paris- Dauphine University and has for main objective to establish itself as an industry leader in the specialized training of finance and business management in France. Supported by the high level reputation of Paris-Dauphine University as well as its expertise in the business and finance fields, Phoenix Ltd. has developed the structures, content and business knowledge necessary to respond to the specific needs of big companies and organizations of emergent countries.

According to our development strategy, we thought about starting with Russia as a first market for our summer school seminars before expanding into other emergent countries. Indeed, we found real opportunities in Russia based on a high demand of big companies in Russia for executive seminars as well as their interest in finance subjects.

That is why, we chose the Risk Management as the main theme of the seminar. This subject is likely to interest Russian companies especially with the actual situation generated by the crisis.

We will see in this report, the reasons why we chose Russia among other Emergent countries, and especially for the risk management theme. And also, the specificities of our summer school seminar and the future expectations of our project.

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II- METHODOLOGY

1. MARKET STUDY To understand the situation, we decided to focus on the study of the existing summer school programs. Then we defined our target and studied its interest for our product:

-The Russian education market -The programs for executives in Russia and France -The potential firms interested by our program -What is the current demand in terms of seminars for the executives?

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2. PROCESS A- Representation

The next chart is the representation of the different steps of the construction of our marketing plan:

B- How did we build our marketing plan?

First, we defined a pre project distributing tasks and roles assignments by collecting data and by brainstorming on the product.

Then, we analyzed the market, the marketing mix and our strategy. Finally we corrected the final report before the presentation.

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C- Responsibility matrix

D- Team contacts

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3. PLANNING First of all we had a brainstorm to define the product and the targeted country. Then, in order to have a successful project, we shared the different tasks during the second lecture. Each member worked on their own tasks while taking into account how far others were in their work. To conclude, we constantly focused on the planning and followed it which allowed us to respect the deadline.

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III. THE MARKET

1. THE ENVIRONMENT

The Russian Federation was the largest nation to emerge from the break up of the Soviet Union in December 1991. The Russian political system is one of the more recent to

POLITICAL

embrace democracy but remains deeply flawed in terms of its democratic credentials and massively influenced by the power and personality of one man, Vladimir Putin. Essentially the country is described as a federal presidential republic. The education topics are very important in governmental politics leaded by Presidential’s education reform.

Education expenditures 3,8% of GDP.

ECONOMIC

Today even in the period of crisis more and more Western companies are starting their business in Russia or considering a market entry. Therefore they need and will need even more qualified professionals in their quest for the Russian market. The Russian market of business education is satisfied only by 30%.

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Russia has a long-standing tradition in high-quality education

SOCIAL

for all citizens. It probably has also one of the best masseducation systems in the world producing a literacy rate (98%) exceeding most Western European countries. Education is split into a compulsory Basic Education, and ongoing Higher Education.

Innovative educational programs must provide for the

TECHNOLOGICAL

following:

-The introduction into educational practice of new and qualitatively sophisticated educational programs;

-The

application

of

new

educational

and

information

technologies, the introduction of progressive forms of organization of the educational process and active methods of instruction as well as teaching and methodical materials corresponding to modern world standards;

- The high quality of instruction provided within contemporary systems of quality management;

-The integration of education, science and innovative activities;

-The creation amongst graduates of professional abilities, which guarantee their competitiveness on the labor market.

Based on civil law system; judicial review of legislative acts;

LEGAL

has not accepted compulsory ICJ jurisdiction. Law is not useless, rather it come in, when something going

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wrong-not just Russia or eastern European view, but European applied. Especially in bilateral collaboration. All international law and the international treaties of the Russian Federation are part of Russian domestic legal system. Domestic law gives way to international law according to Article 15 of the Constitution. The Constitutional Court has the greatest expertise in applying international law. Education in Russia is provided predominantly by the state and is regulated by the federal Ministry of Education. Regional authorities regulate education within their jurisdictions within the prevailing framework of federal laws.

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2. COMPETITIVES FORCES

Stakeholders

Government

R&D

It is important in this study to bring a special attention to the competition and substitutes products.

Competitors come from entities that deliver the same kind of products in the market. Those are mainly high education management schools (private schools), Universities or specialized corporate training agencies. In order to study who were our direct competitors, we had to identify entities which were offering a short term seminar (duration up to one

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month) on business and finance related themes to the top management segment of companies. The following table shows our main findings from three European locations:

FRANCE :

-

RUSSIA :

-

UK :

-

SCHOOLS & UNIVERSITIES ESSEC HEC Paris

SPECIALIZED CENTRES -

Vlerick Leuven Gent Management School LSE LONDON BUSINESS SCHOOL

C5 (French and Russian) FIRST FINANCE CNAM (mainly in French) Not Available FIRST FINANCE

In France, Management and Business Schools like ESSEC and HEC provide adapted short term seminars to the top management of companies. The courses are mainly taught in French or in English when special speakers are invited. Similar Schools exist in Russia; however do not cover Risk Management topics. Moreover, training centers such as Cnam in France, and First Finance located in Paris and London, provide specialized courses on Risk Management in English. Our main competitor is C5 who provides short term seminars each year on Risk Management. Their next seminar will be held in Mars 2010. C5 focuses on the Russian market as well and is located in Paris La Défense. In order to differentiate our product from theirs, Phoenix Ltd plans to play on intense advertising with the help of our partners (appendix 2) and also on Paris-Dauphine University’s reputation.

Substitute products are organizations that provide a similar service but differently such as MBAs which are long term educational programs. Other substitutes are E-Learning programs and companies who provide their own training sessions.

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3. PRODUCT LIFE CYCLE

Our product is at the development stage. Launching a corporate seminar over the summer will be a first attempt for Dauphine University. This is why Phoenix Ltd wants to build a product awareness and develop this market in Russia. From our competitive analysis, it is apparent that Dauphine has a real potential to develop the product in this country. Dauphine already possesses a high reputation brand in France, however it must differentiate itself from the competition such HEC Paris who has already developed an Executive MBA in St-Petersburg. This full time program also appears as a substitution to our product.

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In order to penetrate the market rapidly, Phoenix Ltd has focused on three main developing factors:

-

Quality

-

Low cost in comparison to the competition

-

Selective distribution of a precise segment of big companies in Russia

-

Strong promotion sponsored by a selection of partners

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4. POTENTIAL TARGET MARKET A- POTENTIAL DEMAND IN RUSSIA

• Russia, an interesting market for French business schools HEC has developed some partnerships in new markets such as the University of Tsinghai in China with an MBA program “Advanced Management Program in Fashion & Luxury” and seeks to launch the same program in Russia soon. In addition, the January 16th 2009, it created a new executive MBA in Russia in partnership with the Graduate School of Management (GSOM) of Saint Petersburg State University. This program has an international dimension and aims to help the participants to manage their teams according to the progressive economic situation and is totally in English. This means that, there’s a real opportunity in the executive education market in Russia according to very known French business schools and especially with courses in English.

• Short term business education in Russia Moscow, St Petersburg and other large cities have a relatively developed industry of short-term business education, but many Russian cities, especially in the Russian Far East, suffer a deficit of good training programs. The Russian Far East market for short-term business education is dominated by foreign governmentsponsored business training and exchange programs, such as the Business to Russia program by International Research & Exchanges Board (IREX), and other organizations such as the Chamber of Commerce and Industry (CCI), the Special American Business Internship Training (SABIT), American Russian Center, Winrock International and the Japanese Center. Their programs are usually the only sources of business education in such remote areas as Magadan, Kamchatka and Yakutsk. So

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it’s clear that there is an opportunity in the Russian market for executive dedicated programs.

• Interest for specialized business seminars Short-term business training courses: these are especially popular among smalland medium sized companies. The main tendency in this niche sector is a shift from general business training to specialized training such as merchandising of cosmetics or business-to-business sales. Some large Russian companies are not interested in general business educational programs, but rather request universities and consulting companies to develop industry-specific or even company-specific cases and tasks for students. The annual growth rate of corporate educational programs in Russia is 10%.

• Business seminars that Russian companies are interested in The most popular business seminars in Russia are sales and marketing (about 80% of total training sessions), human resource management, finance management, management, and negotiation techniques. Market demand is expected to significantly increase in the coming years for courses addressing international accounting standards and international certification.

• European qualifications attractiveness Students in West Russia focus on European countries for international study For Russian, the European Universities are synonym of high quality courses and internationally recognized qualifications.

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• Need for English language There is a constant demand for English language teachers in specialized fields. The most popular areas for international study have traditionally been shorter English language courses, but there is now a move towards full tertiary education, especially in hospitality, business and computing.

• Setting up of partnerships with local universities Many business schools in Russia have joint programs with western business Schools.

B- SPECIFICATIONS OF THE DEMAND

• Companies’ interest for corporate seminars on risk management:

Risk is a pervasive part of everyday business and organizational strategy. But, the complexity of business transactions, technology advances, globalization, speed of product cycles, and the overall pace of change have increased the volume and complexities of risks facing organizations over the last decade. With the benefit of hindsight, the global financial crisis and swooning economy of 2008 and the aftermath thereof have shown us that boards have a difficult task in overseeing the management of increasingly complex and interconnected risks that have the potential to devastate organizations overnight. At the same time, executive boards and other market participants are receiving increased scrutiny regarding their role in the crisis. Top managers are being asked – and many are asking themselves – could they have done a better job in overseeing the management of their organization’s risk exposures, and could improved board oversight have prevented or minimized the impact of the financial crisis on their organization?

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Although some companies have employed sophisticated risk management processes, others have managed risks informally or on an ad hoc basis. In the aftermath of the financial crisis, executives and their boards realize that ad hoc risk management is no longer tolerable and that current processes may be inadequate in today’s rapidly evolving business world. Boards, along with other parties, are under increased focus due to the widely-held perception that organizations encountered risks during the crisis for which they were not adequately prepared.

To help boards and management understand the critical elements of an enterprisewide approach to risk management, we propose a business seminar which highlights the main areas that contribute to board oversight with regard to enterprise risk management as we will discover later in the report.

• Russian demand for corporate seminars on risk management:

Many business management training courses exist in Russia and cover various themes. These programs aim at delivering basics of business fundamentals such as Business Management courses. We will discuss about our competitors later on in this report. This fact leads us to assert that there is a potential demand in top Management training courses in Russian companies.

The question was to find out what topics could be of the interest of the Russian top management at the moment. , According to a research from Ernst and Young on Risk Management in Russia, following pas financial crises in 1995, 1998, many executives in Russia agree that they need to monitor their activity. This is even more true following the recent crisis in 2008. Top executives assert that they ” …need to try to predict the development of events”. They also realized that “…risk management is something that they need to constantly monitor if they want the company to function well.”

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In comparison with other countries such as India, China, Brazil and Turkey, Ernst and Young found that Russian companies were actively managing more risks than the companies in the other countries. Based on the interview of many companies in Russia, Ernst and Young provided the following data:

Thus 47% of companies in Russia implement risk management strategies compared to 52% in all emerging markets. Considering the evolving risk management in Russia and the awareness of companies adopt risk management strategies to gain competitive advantages in the market, there is a potential niche for developing executive seminars in this specific area.

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IV. OUR INSTITUTION 1. SWOT ANALYSIS

Strengths • The excellence of the faculty; • Research teams of high reputation (the CEREMADE, UMR Research in Management); • Professionalized training, job opportunities, relationships with close and constructive companies with a very positive perception of the university in the recent years. • Training • Specialist in teaching in small groups • Specialist financial management

Weaknesses • The substantial weight given to informal governance • The label "Dauphine" too limited to French-speaking world; • Lack of enhancement of student involvement • Weaknesses in the display performance bound for potential international business partners outside the Europe • A lack of prioritization and implementation schedule

• New, innovative education • Great location in Paris • Quality of education • Strong reputation in the business cadre forming

Opportunities • Developing market (Russia) • Mergers, joint ventures or strategic alliances • Good position in the price war of education • Moving into new attractive international market segments

Threats • The other competitors from all over the world, like other universities, business schools. • Competitors may have a new, innovative substitute education product. • Invisible supplemental fee on our product or service.

• Loosening of regulations • Government support • The similar potential market in Asia who appreciate the “learning in Paris”. (like China, India, or even Japan)

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2. THE MAIN CRITICAL SUCCESS FACTORS OF OUR INSTITUTION:

• How are they important in our program of summer school of Dauphine?

Identifying CSF's allows firms to focus their efforts on building their capabilities to meet the CSF's, or even allow firms to decide if they have the capability to build the requirements necessary to meet Critical Success Factors (CSF's). So it is an important factor in our high level business education program.

For our risk management seminar, we are all familiar with typical risk management processes. The fundamental notion is that we identify risks, we assess their probability of occurrence, and we assess the consequence of occurrence. Then we put a risk management plan in place that is designed to eliminate, or alleviate the impact of, the serious risk events.

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• The main critical success factors of our Institution: Dauphine summer school. There are 6 critical success factors of our Institution:

Rightly identify the target Updating new technologies

A team experts keeping on R&D Success factor of Dauphine

Strong legal support

Finding right strategic partners Meeting the customers’ needs

a. Identification of right the target: • Russia and French executive education market. There’s a real demand of risk management in the executive education market in Russia in the post-crisis period.

b. A team experts keeping on R&D: • Excellent teachers from Dauphine and abroad (USA, UK…), • Experts who keep research in the “Financial Risk Management” field, and in NTIC field.

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c. Finding right strategic partners: • -UBIFRANCE • -The French Economic Mission • -RUSSIAN FEDERATION CHAMBER OF COMMERCE AND INDUSTRY • -CCIP Departement Russie • -Moscow State Institute of International Relations… d. Meeting the customers’ needs • Every risk is necessarily a future event, and only when the risk event actually happens is the risk transformed into a problem. The better we are at identifying risks and understanding the underlying basis of our risks, the better we can manage the risks. So a good risk management tools for fighting with the crisis and helping the development of future business.

e. Strong legal support • Russian law, French law • Rules for supporting the high education in Russia

f. Updating new technologies • Advantage of Dauphine: NTIC • Multi-media class, e-learning in Dauphine

Please refer to the appendix 4 for more information on CSF

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V. PROJECT PRESENTATION

1. VISION To develop the management skills and the sense of business in developing countries.

2. MISSION To provide efficient training solutions on themes that respond to our clients' overall needs in order to generate a real impact on corporations’ performance and ensure a real return on investment.

3. OBJECTIVES 1- To enter the leaders market in corporate seminars in developing countries within the next ten year. 2- To adopt intercultural values within our Institution 3- To provide a professional environment when delivering courses and meet participants’ expectation 4- To adapt our future seminars themes to the international demand. 5- To enlarge our training session capacity in the next five years

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VI. MIX MARKETING 1. PRODUCT Phoenix Ltd is proposing a corporate seminar on specialized themes. The one that is meant to occur in July 2010 will address the following theme: “Managing risk when facing a financial crisis period”.

Three lines of the product have been conceptualized in order to satisfy a large part of the segment covering three levels of specialization and three price range:

-

The Master Class, a three days long seminar covering fundamentals of risk management including a special workshop on real life case study.

-

The Main Conference, a six days long seminar specializing into different sectors in the Russian market with workshops on real life case studies as well.

-

The last option is to combine the two seminars for duration of 7 days, where the participants can go from the fundamentals to the specialization of the topic.

Depending on their level and needs, companies may choose the formula that best meets their requirements. It is recommended to take both, master class and the main conference for the price of 3600€ (the days of presentation and Paris Tour do not repeat). The following table illustrates the topics of the two seminars. A detailed table of the daily planning is available in the appendix 5.

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MASTER CLASS Length: 3 days Location: Paris Dauphine University – La Défense Price: 1500€ Main topics and activities : • • • • • • • • •

Presentation of dauphine Ice breaking activities Introducing professorial corpse Paris tour: Champs Elyse, Eiffel Tower And Montmartre Introducing Efficient Operational Risk Management Framework Advanced Operation Risk Management Methods Part I Advanced Operation Risk Management Methods Part II Workshop with different scenarios Questions & Answers

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MAIN CONFERENCE Length: 6 days Location: Paris Dauphine University – La Défense Price: 2500€ Main Topics and activities : • • • • • • • • • • • • • • • • • • • • •

Discussing Western Risk Management Experience – Overview of 2009- 2010 Events Best Practice in Risk Management Lessons to Learn From the Financial Instability Prospects for Enhancement of Risk Management in the Ukrainian Financial Sector Specifics of Risk Management in the Kazakh Financial Market Choices and Implementation of Efficient Risk Management Systems in CIS Financial Markets Evaluation of Credit Risk in Credit Portfolio Risk Measurement for a Typical Russian Credit Portfolio Improving Credit Risk Management Major Russian Banks and Credit Risk: Hedging Credit Risk in Russia and CIS Peculiarities of Measuring Liquidity Risk in Russia Liquidity Stress testing in the Investment Bank Questions and Answers session Key Elements of Market Risk Management and Measurement System Hedging Interest Rate Risk: Which Instruments are commonly Used in Russian Markets? Risk Management in the MICEX The Benefits of Good Operational Risk Management Exploitation of Newest Technologies in Anti fraud Management Alternative Ways of Mitigating Risks Different Applications of Value "at" Risk Model

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2. PROCESS • Porter’s value chain

HumanHuman Resources resources (Dauphine) Finance Finance and Accounting and Accounting (Dauphine) Information Information system system (Dauphine)

The client Research and Developement

Processes (partnership with Russian universities)

Marketing and Sales (partnership)

FIRST CONTACT 1- The customer sends his information on Dauphine’s website (name, occupation, company, address and telephone number). 2- The secretariat send to the potential participants the information needed about the available places, the dates, the price, and the seminar’s program (by email). 3- Once the participant confirms his attendance to the summer school, he receives by e-mail an identifying name and a password to login in his personal session (where he finds all the modalities of the seminar, the CV of the experts who will animate the courses and the detailed program of the 2 weeks and a map of Paris. Moreover he will find some documentation, videos and MQC about risk management). FIRST DAY WELCOM PACK 4- Dauphine takes care of the hotel reservation for the executive participant if he comes from Russia or another French city and sends someone to welcome him in the airport.

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5- The first day of the summer school, dauphine organizes a cocktail for the participants to meet each other and presents the experts and professors. It also organizes a little visit of Paris.

THE PROGRAM 6- The days after, the participants follow the program (refer to appendix 5).

To resume, the customer will follow the following process:

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3. PRICE

Our product is composed of three packages going from a simple seminar to a complete one: • Master class: 1500€ • Main Conference: 2500€ • Both: 3600€

4. PROMOTION To promote our corporate seminar, we decided to create first a flyer that we will send to our partners in Russia and to the top ten firms in Russia potentially interested by this kind of program (please refer to appendix 1) to find companies that have been targeted). This flyer will also be visible online by each person searching summer school on search engine. Then we created a website where interested candidates can have more information about our program, where they can register for the sessions and register for receiving newsletters. The website also got a link that let visitors to see and download the flyer. Finally we will be present on the different events organized by our partners. (appendix 6)

5. PLACE Our project is very costly; therefore we cannot manage to have too many subsidiaries at the start. However the place is a key issue for the company (customer, resources, accessibility). Indeed, the chosen locations are clearly part of our strategy which is to attract as much customers as possible and make them loyal to the Phoenix. That is why we decided, at first, to develop locals in Paris La Défense (so as to be in a central place easily accessible).

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Today, La Défense is just what those who initially conceived it wanted it to become: a business quarter, the prime business quarter in Europe and one of the most attractive in the world. Less than a quarter of an hour by RER separates the Grande Arche from the centre of Paris. The Etoile round about is just five minutes away and it takes less than three quarters of an hour to reach Roissy and Orly airports. La Défense is the hub of a fan of public transport facilities assembling and interconnecting all the modes of transport that exist: four railway lines, the RER A line, the number 1 underground line, the T2 tram line and no less than eighteen bus routes. The focal point for all these converging routes, the Cœur Transport hub handles more than 400,000 users every day. As for the inveterate car users, they enjoy a road network that has been boosted by the extension of the A86 and the connection with the A14. They also benefit from the 46,000 or so parking spaces located in various sites underneath the esplanade. Unlike most of the business centers to be found in the major capitals which are almost entirely devoted to the economic activity which they naturally fuel, La Défense was built around a basic premise of an urban mix. Residential units, shops, restaurants, terraces, entertainment, events, tourism, idle strolling, fine arts: each note finds its place on the score of this city serenade…

6. PEOPLE • Who are the experts? Our training experts are industry professionals as well as specialized professors from Paris-Dauphine University working with interactive and pedagogical approach. Our team is specially selected to adapt the requirements of the participants. Because our objective is to expand to Europe, beginning with Russia, the team also includes professors speaking the target language.

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• Who would attend? Aimed primarily at managers interested in improving their knowledge and skills in risk management and also professionals in risk related fields who require a wider perspective of business or enterprise risk in Russia. The target segment is top local and international companies located in Russia (appendix 1). The training programme will benefit: •

Senior managers in charge of implementing systems of effective corporate governance

•

Managers and Internal Auditors who specialize in risk management

•

Individuals taking up a new role in risk Management or those considering entering the profession

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• Our partners In order to optimize the development of the product, Pheonix Ltd plans to implement an efficient process management by working with a wide range of partners. Therefore, processes such as logistic and marketing and sales, will be organized as shown in the figure below:

Because our segment will be groups of top managers from companies and organizations in Russia, Phoenix Ltd plans to build partnerships with tourism agencies in order to obtain low hotel and flight rates for our participants. It must be noteworthy that participants will bear their own accommodation and travel costs. Thus, we must supply such services if we want to attract an important numbers of participants.

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Partnerships with bus rental companies will also be required to provide shuttle services from airport to hotels, and visits of Paris that are included in the product package. Those costs are included in the packages.

Our promotion partners will be located in Russia with entities that will allow us to present our product during business exhibitions. In order to ensure legal rights between France and Russia, we also thought it was important to build a special partnership with government. Please refer to appendix 2

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VII. FINANCE 1. COSTS (per year)

Fixed Costs -Personnel Charges Assistant (full time 1 months/year)

10.200

+ part time 6 month 10h/week) Consultant Relationship Russian companies Interpreter (part time 3 months/year) Director of program

20.000 5.000 30.000 __________ 65.200

-Room rent and equipment -Dauphine La Défense

3.000

-Equipment rent

2.500 __________ 5.500

-Overheads (material, maintenance) -Office supplies -Internet, phone calls, postage

1.000 500 __________ 3.500

-Marketing costs -Brochures (2000/year), postage -Partnership

5.500 18.000

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-Website (creation and maintenance)

7.000 __________ 30.500

Total Fixed Costs (per year)

104.700

Variable Costs (per session) -Teaching staff: -Phd external Professor (3 by ½ day)

2.100

-Phd Dauphine’s Professors (3 by 1,5 days)

1.800

-External consultants (3 by 1 day)

4.500

-Russian consultant (1 by 2 day)

2.800

-fly, hotel, restaurant, taxi etc.

1.200 12.400 ________

-breakfast (7)

2.100

-coctails

3.000

(3)

_________ 5.100

Total Variable costs (per session)

17.500

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2. BREAK-EVENT POINT AND PROFITABILITY ANALYSIS The break-even point is the point at which cost or expenses and revenue are equal. There is no net loss or gain.

Formula: Break even point = Fixed cost / (selling unit price-variable unit cost)

To determine this break even point, in volume per year, we have calculated the total fixed costs from the balance sheet in the previous chart, and the average unit price of our program for one participant. Also we have to calculate the variable cost by person taking in account that we will make the groups of 25 persons (variable cost per person=17500/25=700 EUR). Break even point = 104.700/(2560-700) = 40 persons.

When 2560 is an average price by participant ( (1500+2500+3700)/3)=2560 EUR

Therefore it is necessary to make at least 2 sessions each year (each session attended by an average of 20 people) in order to avoid a loss.

However, our analysis for the first year shows the possibility to reach 75 people (3 sessions *25 persons).

That allows us to reach the profit of 34.800 EUR (X=profit) 2560*75=700*75+104.700+X X=34.800 EUR

Then, the first year we can make a profit of 34.800 EUR (before taxes).

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VIII. FORECAST According to the condition of Dauphine’s summer school we can organize our training session only in July. Also the limit of participants by session is about 50 persons. Consequently, our program can train 200 persons by year. Because we project to attend the market of CIS countries our forecast will take in account the growth of participants. Year

1

2

3

4

5

Number of

75

100

130

170

200

participants

(3 sessions)

(3 sessions)

(4 sessions)

(4 sessions)

(4 sessions)

Sales*

192.000

256.000

332.800

435.200

512.000

Variable

52.500

52.500

70.000

70.000

70.000

139.500

203.500

262.800

365.200

442.000

Fixed expenses

104.700

104.700

104.700

104.700

104.700

Net operating

34.800

98.800

158.100

260.500

337.300

expenses**

Contribution margin

income

*number of participants x average price (2560 EUR) ** by sessions (17.500 EUR by sessions)

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In this table we can see that our activity is profitable from the beginning. Also, the number of 200 people is a critical size for this program and in the case of dramatically increasing of the number of participants we will need to change the organization (consequently increasing in fixed expenses) and the size of the group (from 25 to 50 people maximum).

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IX. FUTURE OPPORTUNITIES As soon as we are positioned in the Russian market as the leader of business summer school, Phoenix can explore opportunities overseas since there is a potential demand in other countries such as China, India and other developing countries, according to the research made. China, according to several criteria, is a potential country we could propose our products

Indeed, in most cases the high business education programs attended by China's top students are very much the product of Western educational institutions, which in recent years have rushed to establish programs on the mainland. The idea: to tap into the enormous demand for talent created by China's white-hot economy. The colossal effort by the central government of China to educate the nation's next generation of managers is unprecedented, and it has been undertaken at a speed that is nothing short of breathtaking.

The need couldn't be more urgent. Twenty-five years into China's transformation into a market economy, the nation faces a critical shortage of welltrained managers. After two decades of explosive economic growth, many Chinese managers run regional or national companies, yet they lack the sophisticated skills they need to compete effectively. Western management ideas take root in the nation's corner offices, multinationals could find themselves confronting a newly powerful adversary: Chinese companies suddenly in possession of the management knowhow needed to go head to head with global giants. Those same ideas -- about efficiency, productivity, profitability, and growth -- hold vast potential to ignite China's already

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blistering economy, raise living standards, and transform the nation from a low-cost manufacturing center to a make-or-break battleground for the global economy.

China is on the path toward capitalism. In all, China will require 75,000 top-level executives with global experience by 2010, estimates McKinsey & Co. -- about 70,000 more than it has now. Without them, the future is uncertain. "In the past, most Chinese companies were domestic. Now they have become global competitors," says Zhang Weiying, dean of the Guanghua School of Management at Beijing University. "If they don't have professional management training, they don't survive."

Students say Western management techniques will help Chinese companies compete against better-managed rivals. "Ten years ago the gap between Chinese companies and multinationals was huge," says Alan Wang, a student in Shanghai and an exec at one of China's biggest ice-cream makers. "Now everyone in China is aware of how important a management education is, and we're quickly filling that space."

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REFERENCES
www.dree.org
www.russiatoday.com
https://www.cia.gov/library/publications/the-world-factbook/geos/rs.html
Le Figaro, les grandes écoles visent sur la formation continue Gaëlle Ginibrière 07/07/2008
Russia education market profile, New Zealand, Trade & Entreprise, 2007
http://www.ey.com/Publication/vwLUAssets/AABS_BRS_Risk_Emerging_Ma rkets_Russia/$FILE/AABS_BRS_Risk_Emerging_Markets_Russia.pdf

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APPENDIX

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APPENDIX 1 TOP FRENCH SUBSIDIARIES IN RUSSIA

EDF

GAZ DE FRANCE

TOTAL

www. international.edf.com

http://www.gazdefrance.com

www.total.com

SOCIETE GENERALE

www.bsgv.ru

CALYON

http://www.calyon.com/globalpresence/russia.htm

BNPPARIBAS

www.bnpparibas.ru

AUCHAN

www.auchan.ru

LEROY MERLIN

http://www.leroymerlin.ru/

107078, Moscou Russie Tél. : 7 495 935 76 03. Fax : 7 495 935 85 83. Mobile : 7 916 197 97 41. Courriel : [email protected] ul.Mitnaya, 1, podyezd 2, ofis 24 Moscow, Moscow 119049 Russian Federation Phone : +7 499 2300033 Fax : +7 499 2302712 Moscow, 16/1 bd Tel +7 (495) 967-38-00 Moscow, 119180 2, Yakimenskaya nabereznaya Tel: 00 75 017 206 700 Moscow,10100, 1-6 Bolchoj Zlatoustinskij per Tel.: +7 (495) 564 85 00 Moscow, Paveletskaya square, 2 Metro: Paveletskaya Phone: 8-800-700-7-700 E-mail: [email protected] 107140 Moscow, Verkhnyaya Krasnoselskaya street, 3A Tel.: (495) 721-20-99 Fax: (495) 721-17-53 Moscow, 31A Chabolovka str., Tel.:+7 (495) 961-01-60

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CARREFOUR

www.carrefour.ru

+7(495)646-18-80 [email protected]

RENAULT

PEUGEOT

MAZARS

DELOITTE

www.renault.ru

www.peugeot.ru

http://fre.mazars.ru/

109147, Moscow (495) 775-48-48 35, ul.Voronzovskaya Siège social PSA Peugeot Citroën Paris Grande Armée 75, avenue de la Grande Armée 75116 PARIS Standard : 01 40 66 55 11 24/27 SadovayaSamotechnaya 127051 Moscou Rossiyskaya Federatsiya Téléphone : (+7) 495 792 52 45 / (+7) 495 792 52 46 E-mail : [email protected]

5 Lesnaya St. http://www.deloitte.com/view/en_RU/ru/ Bldg. "B" Moscow 125047 Russia Phone Number : +7 (495) 787 0600

L’OREAL

www.loreal.com

YVES ROCHER

http://www.yves-rocher.ru

L'OREAL RUSSIE 1/8, 4ème Goloutvinski per, Bât. 1-2 119180 Moscow + 7 495 258 31 91

+7 (495)787-76-72

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TOP 10 RUSSIAN COMPANIES

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APPENDIX 2

PARTNERSHIP

UBIFRANCE the French Agency for International Business Development

International Business Development Promotion during conferencies about Russia and CIS countries

Michel KEFELI e-mail: [email protected]

The French Economic Mission in Russia and CIS countries

Supply of information and support Philippe BAUDRY to French companies and administrations on the economies Chef des services économiques and markets of these countries pour les pays de la CEI Responsible for the promotion of French investments in this region Tél.: +7 (495) 937 24 10, and their investments in [email protected] France

CCIP Departement

Supply of information and support 28, rue de l’Abbé Grégoire to French companies and administrations on the economies Paris and markets of Russia

Russie

Responsible for the promotion of French investments in this region and their investments in France

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Publishing, printing and reproduction of recorded media RUSSIAN FEDERATION CHAMBER OF COMMERCE AND INDUSTRY

TEL: +7 (495) 132 1210

Publishing Publishing of journals and periodicals Computer and related activities Data processing Database activities Other business activities Market research and pub Business and management consultancy activities Technical testing and analysis Education Adult and other education Activities of membership organizations n.e.c. Activities of professional organizations Public opinion polling

Moscow State Institute of International Relations

Director of international Development of international relationship

cooperation - Roman Kotov E-mail: [email protected] Phone/Fax: +7(495) 434-9066

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APPENDIX 3

CRISIS IN RUSSIA After a decade of high growth, rising real incomes, and poverty reduction, the global crisis has severely hit Russia on the growth, employment, and poverty fronts. The impact of the crisis worldwide is proving far deeper and broader than previously thought. The impact on Russia has been accentuated by its structural vulnerabilities: dependence on the oil and gas sector, a narrow industrial base, and a limited small and medium-size enterprise sector. Early labor market and poverty impacts have been severe. As a result, Russia’s real GDP is now likely to contract 4.5 percent in 2009 and unemployment will probably rise to about 12 percent by the end of the year, with attendant impacts on poverty. This is a massive deceleration from the 5.6 percent growth achieved in 2008, in the context of full employment until last September. Though large fiscal reserves and a low debt level will enable the government to finance a fiscal deficit, fiscal space for further support to the economy is rapidly shrinking. Against this background, the question arises: what has been the fiscal policy response so far––the main anti-crisis instrument at the government’s disposal––and what more can be done to cushion the impact of the crisis. Fiscal Response: Targeting Banks and Firms Rather Than Households Russia’s early fiscal policy response has so far focused on supporting the financial sector and enterprises, with rather limited support to households. The total fiscal cost of measures implemented in 2008 and planned for 2009 amount to more than 2.9 trillion rubbles or about 6.7 percent of GDP. This is larger than that implemented in most G20 countries. These measures are aimed mainly at (1) strengthening the financial sector and (2) providing fiscal support for enterprises. As the crisis has progressed from the financial sector toward the real economy, afflicting Marketing - EXECUTIVE SUMMER SCHOOL- Pr. J-F DAVID

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domestic demand, growth, and employment, the policy focus has begun shifting in that direction. The majority of measures (partly conditional) provide fiscal support to firms through a lower tax burden and direct support to key industries of strategic importance. The government of Russia has published a list of 295 strategically and 1148 regionally important firms that are eligible, in principle, for direct state support. In 2009, up to 276 billion rubles (about U.S. $8.1 billion) from the federal budget and 300 billion rubles (about $8.5 billion) in state guarantees (an off-budget item) will be allocated for direct state support to strategic firms. These companies are spread across various economic sectors, and about 75 percent are large firms. The support seems geared toward large, established firms. Supporting the Vulnerable: Limited Interventions in the Labor Market Fiscal stimulus measures include some support for labor market interventions, but this represents a small share of the total fiscal stimulus package. Labor market interventions include active labor market measures and higher unemployment benefits, but implementation will be a challenge because of regional capacity constraints. The planned active labor market measures include providing on-the-job training, creating temporary work programs for the unemployed, ensuring direct support to households, including facilitating internal labor mobility, and providing support for small and medium enterprises. Also, the upper limit for unemployment benefits was increased to 4,900 rubles a month, from 3,124 rubles a month, in January 2009. But given the paucity of the initial benefits, this increase is unlikely to provide much cushion to the unemployed. That fewer than a third of all unemployed are officially

registered

further

limits

the

effectiveness

of

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measure.

50

Employment and poverty impacts have been severe. The impact of the crisis on households has worked through adverse effects on aggregate demand, labor demand, and asset prices. It is estimated that aggregate unemployment in Russia will increase by 2.7 million people in 2009, reflecting both a contraction in employment levels as well as changes in the sectoral structure of employment. The sectors most affected will likely be manufacturing, construction and retail trade (figure 2). Based on the growth outlook and household survey data, the number of poor people in Russia will likely increase by 2.75 million, wiping out much of the gains in poverty reduction in recent years. This translates into a likely end-2009 headcount poverty rate of 15.5 percent, an increase of 2.84 percentage points relative to the 2008 precrisis level. In comparison with the pre-crisis growth path, this implies that the number of poor people increased by around 1.1 million in 2008 and would increase by another 4.7 million in 2009. INTERNATIONAL ECONOMIC BULLETIN, APRIL 2009

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APPENDIX 4 CSF

The Industry of EDU

In nowadays, the education has become a real Industry: “Industry of forming the intelligences”.

Critical success factor

There are some CSF's common to all other industries, but different industries will have unique, industry-specific CSF's An industry's set of characteristics define its own CSF's different industries will thus have different CSF's, for example business services, and education sectors showed each to be different after starting with a hypothesis of all sectors having their CSF's as market orientation, learning orientation, entrepreneurial management style and organizational flexibility. The education industry is very important in Russian governmental politics leaded by Presidential’s education reform, which gives the great chance to our institution, but there are still some institutions offer benchmarking across possible common CSF’s of Dauphine.

Competitive strategy and position Critical success factor

Competitive position or strategy: The nature of position in the market place of education or the adopted strategy to gain market share gives rise to CSF's Differing strategies and positions have different CSF's. Not all schools will have the same CSF's in a particular sector. A summer schoool’s current position in the education industry (where it is relative to other competitors in the world and also the market leader), its strategy, and its resources, capabilities, innovation will define its CSF's. The values of a summer schoool, its target market will all impact the CSF's that are appropriate for it at a given point in time: post- economic crisis.

Environmental

Environmental changes: Economic, regulatory, political, and

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Factors

demographic changes create CSF's for an organization.

Critical success factor

These relate to environmental factors that are not in the control of the organization but which an organization must consider in developing CSF's examples for these are the regulation, political development and economic performance of Russia, population trends for education, and executive education demand of Russia. An example of environmental factors affecting an organization could be a de-merger.

Temporal Factors

Critical success factor

Temporal factors: These relate to short-term situations, often crises. These CSF's may be important, but are usually shortlived. Temporal factors are temporary or one-off CSF's resulting from a specific event necessitating their inclusion. Theoretically these would include a school which "lost executives as a result of a plane crash requiring a critical success factor of rebuilding the executive group". Practically, with the evolution and integration of markets globally, one could argue that temporal factors are not temporal anymore as they could exist regularly in our institution. For example, an education system aggressively building its education internationally would have a need for a core group of executives in its new markets. Thus, it would have the CSF of "building the executive group in a specific market" and it could have this every year for different markets.

Managerial Position Critical success factor

Managerial role: An individual role may generate CSF's as performance in a specific manager's area of responsibility may be deemed critical to the success of an organization. So competent people are the key to future success and offer organizations their only sustainable competitive advantage. Managerial position. This is important if CSF's are considered

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from an individual's point of view- the Russian cadre. For example, the class would typically have the following CSF's: high quality, inventory control and cash control. In institutions with departments focused on customer relationships, a CSF for managers in these departments may be customer relationship management.

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APPENDIX 5 MASTER CLASS

MAIN CONFERENCE (continues)

Monday 5Thof July

14.00 Lessons to Learn From the Financial Instability

10.00 Presentation of dauphine

15.00 Coffee Break

11.00 Ice breaking activities with Ian Strokes

15.15

Prospects

for

Inhancement

of

Risk

Managementin the Ukrainian Financial Sector 12.00 Lunch

16.00 Specifics of Risk Management in the KazakhFinancial Market

13.30 Introducing professorial corpse

16.00 Break

15.00 Paris tour: Champs Elyse, Eiffel Tower 16.15 Choices and Implementation of Efficient And Montmartre

RiskManagement Systems in CIS Financial Markets

20.00 Dinner in Brasserie with cocktail

17.45 End Of The Day

Tuesday 6th of july

Saturday 10th of july

14.00 Registration

10.15 Registrations and coffee

14.15 Introducing Efficient Operational Risk 10.30 Evaluation of Credit Risk in Credit Management Framework

Portfolio

• How to manage data in operational risk 12.30 Lunch management? 15.45 Coffee Break

15.00 Coffee Break

16.00 Advanced Operation Risk Management 15.20 Improving Credit Risk Management Methods Part I 17.15 End of the second day

17.00 Major Russian Banks and Credit Risk:

Wednesday 7th of july

18.30 End of the day

10.00 Breakfast

Monday 12th of July

10.15 Advanced Operation Risk Management 10.15 Registrations and coffee Methods Part II 12.00 Professional lunch and network contact

10.30 Hedging Credit Risk in Russia and CIS

14.00 Workshop with different scenarios

11.30 Peculiarities of Measuring Liquidity Risk in Russia

16.00 Questions & Answers

12.30 Lunch

17.00 End of the day with cocktail

14.00 Liquidity Stress"testing in the Investment Bank

MAIN CONFERENCE

15.00 Questions and Answers with Coffee Break

Thursday 8thof July (for those who only take 15.45 Key Elements of Market Risk Management main conference)

and Measurement System

10.00 Presentation of dauphine

17.30 End of the day

11.00 Ice breaking activities with Ian Strokes

Tuesday13rd of July

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12.00 Lunch

11.30 Hedging Interest Rate Risk: Which Instruments are Commonly Used in Russian Markets?

13.30 Introducing professorial corpse

12.00 Risk Management in the MICEX

15.00 Paris tour: Champs Elyse, Eiffel Tower 12.30 Lunch And Montmartre Friday 9th of July

13.30 The Benefits of Good Operational Risk Management

10.30 Registrations and Coffee

14.00 Exploitation of Newest Technologies in Anti"fraud Management

10.45 Discussing Western Risk Management 14.30 Coffee Break Experience – Overview of 2009-2010 Events 11.45 Best Practice in Risk Management

15.00 Alternative Ways of Mitigating Risks

13.00 Lunch

16.00 Concluding Discussion 16.30 Close of Conference

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