Breifing Paper

To: Board Of Directors SmartWear

From: External Consultant

Subject: Analysis of Environment of SmartWear (SW) & Major risks

Introduction: This breifing paper Analyses the environment in which SmartWear operates and consider how this might
impact its business model, mission and strategic goals and assesses the major risks presented by SmartWear’s current
business model, and suggests appropriate mitigating actions to manage these risks.

(A) Analysis of the environment :

Political:

The country is experiencing political uncertainty because of its coalition government. When the Government will be
unstable, the SW relations with its suppliers and customers interntionally would be damaged as they would be less confident
about SW and you will face loss of oppurtunities from suppliers and revenues from customers.

Economical:

The economy is currently in the middle of a deep economic recession, However, investors would be concerned whether to
further invest in your company considering the fact that economy is in downturn. This may lead to loss of financing and
cashflow problems.

Social:

Recession and political unstability has contributed to record high levels of unemployment, low business confidence and a
steady decline in the standard of living of the general population.

Overall the customers spending capability would be low due to which SW who targets the lower end would benefit from the
large volumes of customers in home.

Technological:

The dominant sectors in your country are Financial services, Retail, Defence technology and Tourism. So technologically
your environment has not developed much. Due to this, you might not be able to develop technologically in order to gather
more customers. This would lead to loss of oppurtunities which are available if there is a trend to use technologically
advanced systems.

Legal:

SW has to remain fully compliant with the Noria Code of Corporate Governance a listing requirement for all companies on
the Noria Stock Exchange. Any breaches by the SW would lead to no compliance with the Code and your company might
face penalty and legal costs.

(B) Major risks & appropriate Mitigating actions

Risks Recommendation

Business Risk: SW has to follow its model of catering the customers

Due to economic recession, Customers disposable income is who's paying capacity is low, this would attract the
customers in this economic downturn when the
low and SW is facing the risk to lose its revenue from
customers. customers need to spend low in order to survive.
Political Risk:
You should focus more on the sales in house during
Due to political unstability, there is a risk that SW would the time of political unstability and develop strong
lose international customers or suppliers due to a negative relationships with suppliers and customers
image of the country's governement. This will lead to loss of internationally.
revenue and customers.

Compliance Risk:

There is a requirement to follow the Code of Corporate SW has to maintian the ethical standards by
strengthening their internal controls and should adopt
Governance to maintain the listing on stock exchange. there
th ethical practices in order to comply with the code of
is a risk that business might face compliance risk if there is
corporate governance.
any breach in the code. This would lead to legal fines and
penalties.

Best Regards,

External Consultant

Report

To: Board Of Directors SmartWear

From: External Consultant

Subject: Company’s strategic position in Southland

Introduction: This report analyses the company’s strategic position in the Southland market to determine why SmartWear
appears to be performing so well in this particular country compared to Noria.

(C) Analysis of Strategic position in the Southland market:

Population:

The Population in Southland is 5,780,000 which is equals to 55.5% of population of Noria. While Working age population
is 3,450,000 which is 59.6% of total population in southland which is lower as compared to Noira where 62.9% is the
working age population.

Working Population and Growth:

The strategic position in Southland is better than Noira because even though the working population is lower than Noira but
still the growth in that population is 0.8% which is far more than Noira. Also the younger working population is 5% more in
Southland than Noira that means more volume of energetic workforce which means more effective work mangement in
Southland.

Average annual earnings:

In Southland, Average annual earnings are $51,700 which is 6.59% more than Noira which makes its population average
spending more than Noira and they can contribute to your revenue more in Southland than Noira
Unemployment rate:

In Sothland it is 6·2% in the current year 5%last year, even though unemployment rates have increase still they are lower as
compared to Noria where 8.8% is unemplyment rate currently. Southland might seem to have increased unemployment in
this year but it is still lower than Noria and average annual earning on indiciduals is also more than nOria, so this is why this
contributes to strong strategic position in Southland.

Central bank interest rate:

This is 2·50% which Increased by 1·0% over 18 months. It is lower as compared to Noria where it is 1.5%. Higher interest
rate fromcentral bank indicates that the earning and spending capacity of individuals in Southland is greater tha Noria that is
why bank might have increased the interest rates. This indicates reason of the strength in the Strategic position in SOuthland.

Inflation rate:

It is 1·4% and stable as compared to 2.2% in Noria which means that the customer bargaining power is relatively higher
than the customers present in Noria. As a customer for your suppliers, you might have a strong impact in southland leading
to cost saving.

Political and economic system:

Democratically elected government which has been elected by the people of southland indicated that the Political systme in
SOuthland is stable as compared to Noria where political coonditiond are unstable. This might also be th eReasoon why you
have a strong strategic position in Suthland.

Industry Environment:

As the trend in Southland indicates that there is Technology development, you might have more data availablity there as
compared to Noria that might also be the reason that you are able to grow more in Southland than in NOria

Best Regards,

External Consultant