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SEBA PRESENTATION Radisson Hotel South January 21, 2010

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  • SEBA PRESENTATION Radisson Hotel South

    January 21, 2010

  • NAIT

    9 Academic Schools

    85,000 Full and Part-Time Students

    Delivers Training and Education in 23 Countries

    Certificates, Diplomas, Applied Degrees and Degrees

    Has identified Applied Research as a Strategic Focus

    Is The Largest Apprenticeship Trainer in Canada

  • JR Shaw School of Business

    Serving Albertans for more than 40 years

    Average more than 2,000 students per year

    Diplomas, Applied Degrees and Baccalaureate Degrees

    Has had 2 Research Chairs endowed by JR Shaw

    Faculty facilitate the delivery of CBUs MBA

    One of the largest business schools in Western Canada

  • Baccalaureate Degrees

    FUS established to manage all degrees at NAIT

    BBA and BTECH-Technology Management

    New Health Informatics Degree CAQC approved

    BTECH Construction Management being reviewed

    BBA has received CASB, CMA and CGA approval

    On-line, evening, week-end [24-7] delivery modes

    New focus on credential enhancement for working learners

  • The Business Faculty

    More than 110 full-time teaching faculty

    Approximately 20 are pursuing or hold PhDs

    36 hold professional designations CA, CGA, CMA, CFP

    90% are pursuing or hold a minimum of a Masters degree

    Average 12 and 13 years of industry and PS experience

    A reputation for quality teaching for more than 4 decades

  • Purpose

    To try to put the events of 2009 in context

    To identify how businesses are affected by these events

    To inform you about what NAIT is doing to help

    To answer any questions you may have

  • Global Uncertainty Prevails

    Economically and financially, we are in unchartered waters

    Regulatory failure and excessive risk taking has led to a banking meltdown that triggered a global financial crisis.

    Significant regulatory restructuring is required

    Massive fraud has resulted in shareholder losses that total in the billions which may have negative long-term effects

    and implications for investor confidence and markets

    BRIC countries are positioned to rival US economically and can be expected will leverage their improved economic

    positions for further gain in 2010 and beyond

  • Jack WelshWorld Business Forum, NYC, September 24, 2008

    I believe that we are in for a hell of a timea deep downturn. The first quarter of next year will be brutal

    We will be slow to get out of it, de-leveraging is huge. Got to get our balance sheets back; to free up markets

    For all of you here running a company, you have to take action, dont ponder. Get ready for real tough times.

    Get your cost structure in place. Be sure you are not over-leveraged. Take care of your best people

  • Michael PorterWorld Business Forum, NYC, September 24, 2008

    Refocus on economic fundamentals. Stay focused on the strategy. Dont over react to distressed conditions

    Make sure you are cutting costs and restructuring towards a strategy, rather than cutting across the board

    Take advantage of opportunity. When the market is down, get into a fundamentally good (better) position

    Seize opportunities for restructuring and dont be afraid to make discontinuous moves if they become available

  • US-Canadian Situation

    Our economy is highly dependent on the US economy. US Federal debt obligations in 2009 are 74.6-trillion (est.)

    Job loss is 323,000 from 2008 high. Unemployment: 8-9%. Rising unemployment will increase defaults on existing

    credits which may trigger a second round of credit tightening a clear threat to recovery

    Recovery has been aided by low interest rates which will rise as last years crash in energy/metals prices wears off - which could trigger inflation and unwind stimulus

    Protectionist trade actions are gaining momentum and currency risk could damage exports and recovery

  • CFA Forecast DinnerShaw Conference Centre, January 20, 2010

    Stefane MarionChief Economist & Strategist, National Bank Financial

    Gary Smith, PhD, CFAChief Economist, Alberta Investment Mgt. Corp (AIMCo)

    Gary Chapman, MBA, CFAManaging Director, Guardian Capital LP

  • 2010 Financial Forecast

    No consensus, de/inflationary camps, crisis of confidence

    Weak US appetite for borrowing/lending, de-leveraging

    Cautious, conservative, crisis of confidence, hopeful?

    Improvement is expected but ragged and inconsistent

    Overall, 5% TSX, S&P; CADUSD; Oil USD $75-92;

    30 Yr. Bonds 5%; Gold USD $800-1,320

  • 2009 in Retrospect

    Financial fallout continues bankruptcies reach new high

    Retrenching in Afghanistan US commits 30K more troops

    Iran and Iraqs fraudulent election results and protests

    Divisive US debate on healthcare reform. Is it affordable?

    H1N1 pandemic global vaccine supply distributed

    G20 replaces G8 as main global economic forum

  • PSE Global Trends

    Demand for global business education is rapidly increasing

    Transformation continues to be driven by globalization, technology, demographics and social imperatives

    Privatization, marketization, QA and internationalization

    Doctoral faculty shortages are a reality

    Intense competition for students and funding continues

    Financial stewardship is becoming an issue

  • A New Experience?

    Our expansion was larger so the downturn is larger than anything that we have experienced before

    Consumption excesses in the West became production excesses world-wide so the contraction is global

    Since the growth cycle was so long (16 years) this is the first downturn for many businesses and policy-makers

    Our economy is beginning to recover. But, will it last?

    Some views from JRSSBs Finance Caucus . . .

  • Mustaq Ahmad, PhD


    Education: Economics (Illinois)Position: InstructorIndustry Exp: 2 yearsTeaching Exp: 24 yearsExpertise: Economics

    Curriculum DesignProf. ConsultingPublications AuthorApplied Research

  • Anna Beukes, PhD*


    Education: Economics (S.A.)Psychology (S.A.) *ABD (Finance)

    Position: InstructorIndustry Exp: 12 yearsTeaching Exp: 15 yearsExpertise: Investment Banking

    Financial AnalystProf. ConsultingApplied ResearchPublications Author

  • Ivan Ourdev, PhD


    Education: Com Physics (Alberta)Position: InstructorIndustry Exp: 13 yearsTeaching Exp: 4 yearsExpertise: International Business

    CommercializationApplied ResearchFinancial ServicesProf. ConsultingPublications Author

  • Richard Ford, PhD


    Education: Business (Cranfield)Position: InstructorIndustry Exp: 20 yearsTeaching Exp: 10 yearsExpertise: Supply Chain Mgt.

    Operations/LogisticsBest PracticesProf. ConsultingApplied ResearchPublications Author

  • Andy Igonor, PhD


    Education: Business (Bristol)Industry Certification

    Position: Associate ChairIndustry Exp: 12 yearsTeaching Exp: 10 yearsExpertise: Information Tech

    Info/Bus SystemsProf. ConsultingApplied ResearchPublications AuthorCurriculum Design

  • Doug Short, MBA


    Education: Business (Alberta)Position: Chair, FinanceIndustry Exp: 16 yearsTeaching Exp: 27 yearsExpertise: Textbook Author

    Curriculum DesignFinancial ServicesProf. ConsultingApplied ResearchCase Studies

  • National Expectations

    The recovery will be more gradual/onerous than expected

    Regulatory reform is required to stabilize markets

    True recovery wont happen until private demand resumes

    G20 policy, US debt, increased protectionism are factors

    Rising unemployment and inflation could slow recovery

    Economy, climate change, nuclear diplomacy are priorities

  • Is Alberta Better-Off?

    Credit is slowly coming back into the banking system

    Cautious businesses are increasing their equity positions

    Oil prices and Sands spending is expected to be up in 2010

    Construction costs are down fueling increased building

    Gas royalties have declined triggering government cuts

    Climate change regulation/requirements is still unknown

    Recovery in Alberta is expected to arrive in late 2010

  • What It Means for Business

    We are recovering but there are more bumps ahead

    Take the time to prepare for set-backs and opportunities

    Carefully assess your business risks and vulnerabilities

    Identify and prioritize short-term readiness initiatives

    Broaden focus, prepare for multiple scenarios

    Globally, keep your eyes on China

  • Why Watch China?

    They have less debt/financial obligations than the US

    Demographics/cost structure are more favorable than US

    Consumer goods trade generates a huge surplus

    Quality of life, education and training are improving

    Developing technology around old-economy manufacturing

    Economic and Financial firepower is substantial

    Can be expected to push position

  • Some Key Questions

    Are the right people in the right roles?

    Have the key risks facing your business been identified?

    Is decision-making being responsive to market changes?

    Are resources being allocated to support key value drivers?

    Have costs, customers and suppliers been prioritized?

    Are stakeholders informed and involved?

  • Assessing Business Risk


    Key People, Products, Services, Channels

    Information I-Technology Equipment


    Customer Value Proposition, Profit/Loss

    BrandPartnerships Alliances Stakeholders





  • Short-term Readiness

    Increase efficiency, manage cash flow (Cash is King)

    Cut nice-to-haves, reduce debt and other liabilities

    Be credit conscious; aggressively manage working capital

    Focus equally on customer and key employee retention

    Improve customer services/incentives; enhance marketing

    Leverage proven products/services; delay LT investments

  • Consider Multiple Scenarios

    Several scenarios should be considered

    Conventional business models may no longer be viable

    Management teams should be assessing options

    Implementation plans should be developed

    Ensure all stakeholders are involved

    Ensure an effective communication strategy is in place

  • Action Summary

    Make adjustments and/or cuts for new realities

    Continue to invest in core strengths and key resources

    Communicate, Communicate, Communicate

    Offer employees incentives and customers new solutions

    Maintain pricing and focus on capital (and how its used)

    Evaluate efficiencies related to out-sourcing/off-shoring

    Upgrade your personnel and consider acquisitions

  • Contributing to Our Community

    Through JRSSBs Community Connections initiative, faculty are able to provide Edmonton-based businesses with a strategic business risk assessment (as above)

    All assessments are coordinated through my office

    If you are interested in taking advantage of this business risk assessment opportunity, call 780-491-3008

    Thank you!

    Slide 1NAITJR Shaw School of BusinessBaccalaureate DegreesThe Business FacultyPurposeGlobal Uncertainty PrevailsJack Welsh World Business Forum, NYC, September 24, 2008 Michael Porter World Business Forum, NYC, September 24, 2008 US-Canadian SituationCFA Forecast Dinner Shaw Conference Centre, January 20, 20102010 Financial ForecastSlide 132009 in RetrospectPSE Global TrendsA New Experience?Mustaq Ahmad, PhDAnna Beukes, PhD* Ivan Ourdev, PhDRichard Ford, PhDAndy Igonor, PhDDoug Short, MBANational ExpectationsIs Alberta Better-Off?What It Means for BusinessWhy Watch China?Some Key QuestionsAssessing Business RiskShort-term ReadinessConsider Multiple ScenariosAction SummaryContributing to Our Community