Plan For A Foreign Exchange Trading Company

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Company and shall be returned to Plan For A Foreign Exchange Trading Company when
requested.

This is a business plan and does not imply an offering of securities.

 Table of Contents

1. Executive Summary 1
Business Opportunity
Product/Service Description

2. Company Background 3
Business Description
Company History

3. Business Plan For A Foreign Exchange Trading Company 5

4. Services 6

5. The Industry, Competition, and Market 7

Market Definition
Primary Competitors
Customer Profile

6. Marketing Plan 10

7. Financial Plan 12
Investment Plan
Break-even Analysis
Liquidity Plan
Earnings Plan
Risk Analysis

8. Conclusion 20
Plan For A Foreign Exchange Trading Company 1

1. Executive Summary
Due to fluctuating profit margins, the financial industry is turning toward international
business concepts. Foreign exchange trading especially is just one such concept that lately
showed significant growth potential for the future. Based on electronic trading systems,
significant growth rates can be expected to persist in the near future, so that investments in
that segment are very profitable.

The goal of this start-up is the operation of a foreign exchange trading company that offers
automated trading accounts for the customers. Products will be offered to institutional
investors and financially strong individuals. In addition to this core business, the company
offers a selection of financial consulting services which will help to increase sales revenues
and utilize personnel capacity.

1.1 Business Opportunity

The foreign exchange trading industry currently shows a strong growth marked by a
higher demand, but also growing costs for electronic systems and employees. The
development of new business strategies and solutions seems critical for new industry
players to get market shares and survive in this highly competitive industry. The choice
of services, as well as the development of unique trading systems, can be one strategy in
this field of business. Additionally, comprehensive cost and risk management is of
critical importance for a solid stream of revenues. Big industry players have shown that,
even in a competitive market, growth rates of more than 20% can be sustained.

Many businesses in the financial industry have failed to adjust their strategy when
customer demands and environmental factors changed. On the other hand, companies that
reacted flexibly to their changing environment show significantly higher revenues and
margins and increased shareholder value. Particularly, new trading systems and new
forms of distribution with an international focus support the successful businesses.

The operation of a foreign exchange trading company with a unique trading system that
offers individual accounts and additional services for their customers is the core of this
start-up. A strong focus of this business will be placed on the development of new and
innovative trading strategies for the customers that deliver a significant value. As an
add-on, a broad range of customized services will be offered, which will help utilize
company and employee capacity. Another key element of this business will be risk
management, which will increase customer satisfaction and optimize profits.

The operation of this volatile and risky business requires a good knowledge of the foreign
exchange trading markets, as well as a competitive service concept to increase customer
satisfaction. The expectation to explain the trading strategy and the trading system is
likely to require a high degree of individual customer advice. However, it is critical that
this service is offered with a strong focus on cost management.

One central goal of the proposed business strategy is the development of a unique
corporate identity. Such identity will create customer loyalty and help gain a competitive
Plan For A Foreign Exchange Trading Company 2

advantage. Therefore, it is planned that, in addition to the selection of new and interesting
services, a company design is developed. For this reason, the service around the offered
trading accounts and the additional businesses is very extensive.

The required investment for the proposed business is moderate compared to other
companies in the industry. Labor is expected to be the main cost driver, whereas no other
substantial investment in fixed assets is required. Depending upon the location, the
minimum required investment amount ranges between $150,000 and $160,000 in the
start-up phase, based on a 18-20% average revenue margin. This amount is well within
the financial requirements observed for other comparable companies.

1.2 Product/Service Description

The business will operate in the foreign exchange trading industry with a unique
electronic trading system. An additional source of revenues is the sale of customized
investment and financial services. This will range from risk management to portfolio
optimization. Cross selling is planned to be one of the prime strategies in this business,
since all services are targeted to serve a similar need and can easily be combined.
Synergy in selling services across business segments is likely to boost earning further.
Net earnings are expected to be at least 3% above traditional trading businesses with only
one or two sales segments.

Figure 1.1 shows the revenue mix across segments in the start-up phase. This projection
is based on the expected strategic direction, investment amount and business
environment. As the core business, the foreign exchange trading segment is expected to
generate the largest share in revenues. The sale of investment services is expected to be
another important generator of revenues, which also helps utilize invested capacity. The
sale of financial consulting is expected to be intensified depending upon market
conditions.
Plan For A Foreign Exchange Trading Company 3

2. Company Background
The goal of this start-up is the operation of a foreign exchange trading company with several
services. The focus of this business will be on the demand from institutional and private
investors which shows the highest profits. Additionally, the sale of investment services and
financial consulting is planned to reach an optimal utilization of personnel and company
capacity. An initial investment amount of at least $150,000 to $160,000 is required, which
will allow the operation of a small business with 6 to 8 employees. Sales revenues are
expected to range between $1,500,000 and $1,800,000 in the start-up phase and the operation
is expected to generate profits starting in the first or second business year.

2.1 Business Description

Management is expected to have a solid knowledge of the foreign exchange markets and
the offered services to influence the customers. The goal is to create an innovative
business in which the customer experiences competent service. A well chosen and
targeted selection of offerings will complement this strategy. Both aspects are core
requirements to build customer loyalty. Repeat customers are expected to generate
revenues of 80% and more. Although this strategy is likely to require additional
investments, it is expected that revenues per customer will increase significantly and
range above industry average. Furthermore, this strategy will provide a clear entrance
barrier for prospective competitors.

The development and promotion of a corporate identity is another central task for
management. Given the homogeneity of businesses in this industry, the development of a
corporate identity will markedly increase sales revenues and build a customer base.
Furthermore, a corporate identity will support expanding the business to a larger
international target market.

2.2 Company History

In the start-up phase, the management is operated as a one-person-business. This set up
carries a certain risk potential because of the high equity stake the manager bears and the
personal and statutory liability assumed. However, this set-up preserves a high degree of
flexibility in managerial decision making.

The number of personnel to be employed depends on the structural complexity of the

operations and the desired size. Figure 2.1 shows a break up of costs in the industry. It is
expected that the target employee earns a monthly salary of $6,500 to $9,000 based on 45
hours per week. The sales and service area requires 1 to 2 employees on average. Due to
illness and vacation times, in the long run an average of 8 permanent employees will be
required after the start-up phase. With increasing sales and better utilization of employee
work time, revenue margins will increase and thus, costs per employee will decrease on
average. With revenues ranging around $1,500,000, capacity utilization is expected to be
around 85%.
Plan For A Foreign Exchange Trading Company 4

During the start-up phase, a single person will attend to all necessary management task,
coordinate employees and provide strategic direction to the developing business.
Accounting, administrative and machine maintenance will be covered by two employees.
Sourcing and marketing will require one employee.

Finding the optimal location for a business is one of the success factors in the short and
long run. This is also important for international businesses because taxes, employees and
additional costs are crucial for all businesses. The following analysis is based on 10
businesses in the financial trading industry. Since a small company is recruiting its
customers typically from the home country and later from a worldwide area, a national
location is considered as the core market.

For the location with a core market in the selected region, the following factors are
relevant:

The taxes and other administration costs are low.

Administrative costs are expected to be comparably small given the expected revenues.
The possibility to recruit additional personnel is favorable.
Rent is reasonable.
Infrastructure is stable.
It is easy to find appropriate employees.

Because of the favorable growth perspectives in the chosen market and growing
investment activities, we expect to realize yearly growth rates in revenues of 15-20%
given a 4% economic growth rate.
Plan For A Foreign Exchange Trading Company 5

3. Business Plan For A Foreign Exchange Trading Company

One of the key elements of a successful business in the foreign exchange trading industry is a
sophisticated trading system. The core of the profit maximization strategy is to minimize the
administration costs and to increase the investment volume. Sales are based on investment
fees with the following structure:

annual basic fee - 3% to 5% depending on the investment sum

performance fee - 15% to 25% depending on the absolute performance

The specific investment strategy will be monitored constantly and vary according to the
projected performance. This strategy provides a competitive edge against other companies in
the environment and is expected to generate an additional demand and the possibility for a
price mark-up.

The development of an electronic trading system is a key elements of a successful trading

business. To utilize the capacity, external institutional customer can also use this system for
their own trading business. Especially, the following points will be covered by the system:

risk management
increase of trading revenues
reduction of spread costs
automatic administration of all accounts
performance measurement

The system will be further developed according to the past and current performance.
Plan For A Foreign Exchange Trading Company 6

4. Services
Additional service offerings related to the core business provide other fields of business. The
available competence will be used for further business activities that will generate additional
revenues. While this is not a core business segment, this concept has growth potential
because the demand for investment services is rising. Initially, the investment in inventory,
technical equipment and personnel capacity of this segment is limited. Especially, the supply
of complex investment planning with a higher priced range will require extensive service.
The following services will be offered to the customers:

hedging strategies
portfolio optimization
financial consulting

This strategy will help utilize the capacity in personnel, since it allows for an optimal
coordination of employees. All employees will be trained to cover all aspects of individual
services for the customer. Therefore, it is necessary to have a high knowledge about the
offered services. This concept is adaptive to changes in customer demand.
Plan For A Foreign Exchange Trading Company 7

5. The Industry, Competition, and Market

A careful analysis of the market and competitive forces in this industry is a key element in
assessing the business potential of our project. This analysis will provide marketing and sales
data that are indispensable to develop the business potential optimally. The main competitors
are comparably-sized medium and large foreign exchange trading companies in the
international environment with a similar selection of products and services. Since the
planned project is of international scope with a single headquarter, the competitive analysis
will have to focus on the international and local market. The market and competition analysis
will be based on the entire market.

5.1 Market Definition

Figure 5.1 shows average growth figures in revenues of the foreign exchange market
during the past 10 years. Despite slowing global economic growth in general, and in the
most local industries in particular, a lot of companies have experienced constant growth
rates of more than 15% to 20% since 1999. For 2005, a growth of 11% is expected with a
strong development in the third and last quarter.

Despite slowing economic growth and decreasing customer demand, the foreign
exchange trading industry underwent a relatively favorable development. New and
innovative business concepts and trading systems in the sector still show high growth
potentials, while growth rates of traditional businesses in that industry were below
average. The significant growth of new business concepts is primarily due to sharp cost
control and more efficient business strategies that accounted for higher revenue and
earning figures. According to industry estimates, 30% of such innovative businesses
gained from cross-selling activities between their business segments. Sinking prices of
administration and employment costs have allowed the industry to partially compensate
for slowing demand. Savings in input costs were also due to decreased development
costs. However, starting in 2006, this trend is expected to reverse and growth rates will
pick up markedly, despite the uncertainty in the development of worldwide economic
developments.
Plan For A Foreign Exchange Trading Company 8

5.2 Primary Competitors

The competitive environment is primarily determined by the choice of item groups, but
also the regional location. But, regardless of the selection of items, high mark-ups are not
feasible in the long run since this will attract competitors who compete away any rents.
With a high density of businesses in one location, businesses with the highest marginal
cost will be driven out of the market. Such locations will yield a return of 12-14% on
average. This is the expected equilibrium return in a saturated market. To further analyze
the competitive environment, it is necessary to define the players in that environment. A
firm that generates $500,000 to $1,500,000 in revenues and employs 5 to 10 people
should regard a firm with revenues and personnel 3 times this figures as a viable
competitor. On the service side, businesses with a comparable selection of offers are
regarded as competing in the same market segment. Figure 5.4 shows the size of
businesses in this market segment, which also includes different products and services
that will be sold worldwide. The numbers are based on average revenues of companies
that run their business more than five years.

5.3 Customer Profile

The specialized way of distribution and offerings are primarily targeting medium and
large international investment companies, but also companies from other businesses that
operate with different currencies. A possible segmentation to identify different customer
groups is by segmentation of different lines of business. Figure 5.2 shows the demand for
foreign exchange services from different lines of business. Numbers are based on
averages per company of a particular group multiplied by the number of companies in the
respective group. This gives total demand share per group. As can be seen, companies in
the industry segment, like car manufacturers, have a high demand for foreign exchange
trading services. Figure 5.3 shows revenues by yearly revenues of potential customers.
The figure shows revenues generated per profit group. Numbers are based on the average
profit per customer and the number of customers per profit group. As can be seen,
customers in the middle income bracket generate the highest revenue streams. High
frequented low income groups, such as small and medium companies, generate relatively
low revenue streams, because these companies have their own foreign exchange groups.
Plan For A Foreign Exchange Trading Company 9
Plan For A Foreign Exchange Trading Company 10

6. Marketing Plan
In the start-up phase, it is a central task of the marketing concept to establish name
recognition and a unique trade mark. Later on, the strategy will primarily be targeted to gain
new customers and create customer loyalty of repeat customers. Several marketing and sales
promotion strategies are available in the financial industry. Figure 6.1 shows different
marketing elements and their use in marketing strategies, as well as their estimated potential
success factor. The figure can serve as a direction for the planning of a marketing and sales
promotion strategy. The numbers are based on typical businesses in the financial industry. As
can be seen, printed advertisements target a large potential customer group, but at a relatively
high cost. Printed advertisements in international newspapers and financial magazines are
regarded as very beneficial in the start-up phase to attract a large group of potential
customers and draw attention to the range of articles offered. 49% of businesses in the
financial industry use printed advertisements and about 60% of this group regard this as the
most beneficial form of marketing. Sales promotion strategies have temporary effects only.
They are used at business openings primarily and offer special discounts. 49% of businesses
use sales promotion strategies frequently and 81% of the users responded that this instrument
is successful. Marketing alliances with other financial businesses to generate cost savings
and increase efficiency are used rarely. Such strategies include mutual use of marketing and
web promotion events and joint promotion arrangements. Only 45% of businesses have used
these elements and 55% of these regard this instrument as beneficial. Web and e-mail
marketing is used frequently in the financial industry, although this would be a relatively
inexpensive additional effort. Direct mailings are a very efficient strategy that sends mailings
to selected customers or institutional investors. Since spreading costs of such mailings are
very low, this marketing element provides a useful tool for special offer promotions.

The use of marketing and sales promotions proceeds as follows: as a broad base to attract
new customers, the strategy will include a combination of printed advertisements and special
offers with opening discounts. Furthermore, a group of customers will be selected for direct
mailings. This strategy is expected to continue for 3-4 months, after which the effort will turn
towards creating customer loyalty for regular customers. This strategy is supplemented by a
regular marketing strategy and direct mailings to regular customers. A marketing alliance
and online advertisements will also come to use.
Plan For A Foreign Exchange Trading Company 11
Plan For A Foreign Exchange Trading Company 12

7. Financial Plan
A sound financial plan is the key factor for the success of a business start-up. Investors and
banks will base their funding decision on the information given in this plan. Besides a plan of
the financial needs, this plan must insure that the business is always liquid and ultimately
profitable. Since the sales and earnings projections in the business plan are based on
expectations, the financial plan has to be revised and refined on a constant basis so that
discrepancies can be uncovered and solved instantly. The inputs for this financial plan are
based on 22 businesses of different size and market segments in the foreign exchange trading
industry, which serve as a group of comparable firms, as well as own estimates based on the
planned business environment. Revenue estimates are conservative and expense projections
include a cushion for unforeseen contingencies.

The initial capital requirement is estimated to be $150,000 to $160,000. The sales margin is
expected to be 15-20%, whereby each business segment contributes differently to sales and
earnings. The foreign exchange trading segment for customers, of all segments, will have an
average contribution to sales in relative terms (16.5%), but given the high sales volume, the
largest in absolute terms. Revenues from trading of own equity investment portfolio is
expected to have a sales margin contribution of 25.5%. The sale of services is expected to
generate a 12% to 15% sales margin, while the margin from sales of financial consulting is
expected to be closer to about 10%. Figure 7.1 shows the source of revenues by segment
during the start-up phase.

Depending on the initial investment sum, cost and revenue estimates vary. Figure 7.2 shows
the expected relationship of cost and revenues. As can be seen, the relationship is not linear
everywhere, but costs decrease relative to sales at an initial investment of $150,000. This
effect is due to the better utilization of capacities in personnel at rising revenues at constant
cost. If capacity is fully utilized, additional personnel must be recruited. At an investment
sum of $400,000, administrative costs are expected to return to a linear relationship of sales.
At sales levels between $1,000,000 to $2,000,000, costs increase by the factor 1.85. The cost
revenue relationship is important, not only during the start-up phase, but also for planned
further expansion. Often such expansion strategies are based on this relationship. Other
industries are able to generate cost savings of 30-50% during expansion periods, while for
the financial industry, this factor is close to 15%. At a specific size, this relationship reverses
because administrative costs rise sharply. This affects small businesses between 10 and 20
employees most severely.

The details of the financial plan are laid out in more detail as follows:

Section 7.1 gives an investments schedule. This includes all investments necessary during the
start-up phase.

Section 7.2 gives a break-even analysis that shows revenues at the break-even point. Every
additional sales revenue adds to profit and vice versa.

Section 7.3 gives a liquidity plan. This plan is based on current cost and revenue estimates
Plan For A Foreign Exchange Trading Company 13

from Section 7.2. Liquidity must always be positive.

Section 7.4 contains a long-term profit projection for the first 4 years of business. The
projection shows the critical amount of revenues at which the business is profitable and how
profit develops over time.

Section 7.5 provides a risk analysis. The risk analysis contains critical factors that may
impact the financial numbers presented in this plan.

7.1 Investment Plan

The investment plan comprises primary capital needs for the foundation and operation of
a foreign exchange trading company with different services for sale. The plan also
includes initial marketing and sales promotion expenses.

The figures are based on a business with 3-5 employees and expected revenues of
$950,000 in year 2-3.
Plan For A Foreign Exchange Trading Company 14

7.2 Break-even Analysis

The break-even analysis shows how earnings rise as a function of sales. The break-even
point is the point at which revenues from sales cover total costs (fix costs and costs rising
with sales). This analysis is important for the development of the liquidity plan. If the
break-even point is not achieved, in the long run the business loses liquidity and may
become insolvent. This requires that a critical amount of revenues must be generated.

At a sale revenue of $600,000 and given fixed costs, the business will generate a profit.
Fixed costs are estimated at $420,000 to $430,000 and variable costs at $180,000.

At a realizable revenue of $1,000,000, after 2-3 years profits will rise to $170,000
pre-tax. This represents an earnings margin of 17% pre-tax and 11% after-tax. These
estimates are realistic in this market segment. Increasing sales volume will increase
pre-tax earnings margins, but this development reverses when administrative costs begin
to rise sharply. Up to a sales volume of $3,000,000, earnings margins rise to 18.5%, after
Plan For A Foreign Exchange Trading Company 15

which the margin decreases to constant 17.5%.

Figure 7.3 shows at which critical sales volume the business generates a profit. This
serves as a base for a pricing strategy. Additionally, the graph shows the amount of sales
at which a marketing campaign can be run profitably.

7.3 Liquidity Plan

The liquidity plan shows the amount of finances necessary to assure permanent liquidity
of the business. The plan is based on 4 representative months of a typical business with 3
to 5 employees, annual sales of $1,300,000 and net profits of about $300,000. Revenue
estimates are drawn from a standard normal distribution.
Plan For A Foreign Exchange Trading Company 16

7.4 Earnings Plan

The earnings plan shows the results from ordinary operations. The plan is based on the
first 4 years of business. Revenue estimates are drawn from a normal distribution with an
estimated growth rate of 20 to 30%. Figure 7.4 shows profit over time.
Plan For A Foreign Exchange Trading Company 17

7.5 Risk Analysis

The risk analysis considers critical factors that may lead to a failure of the business
concept. Such factors can involve failures during the implementation phase, as well as
during operations. Such potential factors are ordered according to the probability at
which they can arise. Shown is the key factor that led to the failure only. Data are drawn
from questionnaires of 10 financial trading businesses with comparable product offerings
and revenue- and cost structures that went bankrupt during the last 3 years, as well as
analyses of different research institutes.

1. Insufficient demand: This is the most frequent reason that leads to business
failure. This includes permanently low demand, as well as a temporary collapse in
demand. Often demand estimates were too optimistic at the outset. Such failures might
also come from external shocks of the market instead of operating deficiencies. 19% of
businesses with insufficient demand go bankrupt. 50% of these businesses report that,
once demand slacked, they did not react accordingly, because they believed that this
phenomenon was only temporary. Since the expected frequency of customers during the
Plan For A Foreign Exchange Trading Company 18

start-up phase is still low, a critical success factor is to focus promotional effort so as to
generate customer loyalty early on, which will help minimize the effects of demand
fluctuations. This is also important for the future development of the business.

2. Behavior of Competition: Due to low entry barriers, additional businesses can

enter the market at low cost. Approximately 16% of insolvent businesses were driven out
of the market by that competition. A better trading system, service concept, innovative
ideas and concentration on core businesses are easy means for an entrant to gain a
competitive edge.

3. Personnel and capacity utilization: Often personnel capacity cannot be adjusted

easily when demand slows down. Currently, financial businesses have a capacity
utilization rate of personnel of 80%, i.e. 80% of employee working hours can be directly
credited to sales. At small businesses this value is often lower, which means that 20% of
working hours arise without generating any further revenue. 13% of such businesses go
bankrupt for this reason.

4. Liquidity constraints: Another frequent reasons for bankruptcy is insufficient

liquidity. In that case, it is possible that all liquid funds are used to cover losses or that
liquidity needs were planned too tight. To be able to flexibly react to changing liquidity
needs, it is important that sufficient funds be planned, even during the start-up phase.
Thus, 5-10% of the investment sum should be held as liquidity reserve permanently. 13%
of insolvent businesses reported liquidity as the reason for bankruptcy.

5. Over-indebtedness: Many business are run on a small equity base. The majority of
investments are funded by debt. If the business becomes unprofitable, debt obligations
cannot be covered. Little more over 10% of insolvent firms reported over-indebtedness as
the reason for going bankrupt. It is therefore important that a share of earnings is retained
for debt service.
6. Macroeconomic Conditions: In a cyclical downturn, revenue expectations may
not come in according to expectation. Although this factor does not affect the business in
itself, it does have an impact on profitability, liquidity and leverage. Costs remain
constant during such periods but revenues typically decrease, which affects overall
profitability. 10% of all insolvent businesses report that they went bankrupt due to
macroeconomic conditions, although the relevant indicators of the business looked
healthy.

7. Location and market: The market of the business and the selection of the right
potential customers is an important success factor and one of the fundamental decisions
that has an impact on the future prosperity of the firm. Therefore, a careful analysis is
necessary. More than 10% of insolvent businesses reported that they went bankrupt
because of the wrong market selection. Often start-ups did not consider that, even when
the choice of market may not be wrong at the outset, it may later become so when
economic conditions worsen. This may be due to structural changes or different interest
of customers.
Plan For A Foreign Exchange Trading Company 19

8. Wrong Business Decisions: Often wrong business decisions and difficult situations go
unnoticed for some period which can lead to a failure of the business. A critical and
independent reflection of a decision are critical factors to determine the value of a
management decision and evaluate the business' profitability. Studies have shown that
many businesses fail in their start-up phase because of management’s inability to make
sound business decisions, while once a business is settled, such mistakes are very rare. A
critical management instrument is the ability to detect potential failures and problems.
Certain key figures can help measure this ability and objectively determine a decision's
chance for success.

Figure 7.5 shows the relative importance of each factor for businesses that went bankrupt.
The numbers are based on the most relevant reason that triggered bankruptcy, but not the
reason responsible for bankruptcy. External factors that changed the competitive
environment and changing macroeconomic conditions were the most important reasons
relative to internal factors.
Plan For A Foreign Exchange Trading Company 20

8. Conclusion
The foreign exchange trading segment is one of the most profitable within the financial
industry, while almost any other segment, especially in the local markets, currently lives
through a difficult time. This situation is mostly driven by the competition of larger
international companies.

The relatively modest investment requirements and running costs provide a favorable
argument, since external funds from banks becomes more difficult given that the risk
aversion to finance such ventures has risen. A company with specific knowledge and
innovative ideas has good chances to move into profitable market niches and run a successful
business. Market conditions change constantly, as do customer demands. This is the chance
for businesses with innovative ideas and new offerings to secure a dependable customer
basis. Service is a critical factor that can earn a competitive edge. This is also true for new
trends in the industry to better control costs and increase efficiency.

For a successful operation of a foreign exchange trading company, six factors are critical and
central for the business strategy:

- In the foreign exchange trading industry, it is important that the customer experiences
comprehensive and competent service. This will secure customer loyalty in a market that is
very fast and competitive.

- Risk management is one central determinant.

- The utilization of personnel capacity is critical for the long-term profitability because of
changing margins and the constraints to flexibly reduce personnel. Therefore, the selling of
additional financial services is a further segment of the business that is integrated in the sale
of the whole business process.

- A carefully selected assortment of new technologies has the potential to gain a competitive
edge against competitors. Furthermore, a service that aims to give the customer an added
value through new services can justify price mark-ups.

- A critical factor in the financial industry is quality management. Better quality at lower cost
increases customer satisfaction. Deficiencies in service quality can lower demand, while
good service quality can help create customer loyalty.

- Cost management is a critical success factor for businesses in industries where margins are
low. Computer aided planning is an integral part of cost management.