Anastasiya Kozlovtseva BUS 490 Strategic Management Ramonien Lineta Homework Assignment 1 February 7, 2012

Exercise 1 Wizz Air

Search for information using the Internet. On one page, list ten opportunities and ten threats that face the company. Be specific in stating each factor. Then write a twp-page summary of your findings. Include a bibliography to reveal where you found the information. Wizz Air Company-Wizz Air is a value-oriented airline that focuses on innovation all along the way of the customer journey. Our aim is to make flying affordable to the citizens of CEE, as well as to provide a new travel experience to all travelers in the EU (Wizz Air, n.d). Opportunities: 1) Growing demand for low cost airfares. 2) One of the main competitors- Hungarian Malev Airlines went out of business 3) Technological Advancement 4) High Rates of Unemployment in Europe 5) Economic Climate 6) Globalization of the businesses 7) Friendly Legal Policies 8) Launching new routs 9) Move their operations to a less costly airport (Warsaw Modlin Airport) 10) Orientation on businesses Threats: 1) Exchange Markets Fluctuations 2) Technology 3) Oil prices are fluctuating

4) Tight competition-- Ryanair, EasyJet, BerlinAir 5) Natural disasters 6) Involvement of Airlines in EU emission trading system 7) Dependence on the economic cycle (Ryanair and its low cost flights in Europe, n.d.) 8) Terrorist attacks anywhere 9) Air Transportation Substitutes 10) Threat of new entrants There are many opportunities and threats for Wizz Air Airlines. They include economic, political, social, legal, technological and competitive forces. Wizz Air is a low cost airline company. As the demand on low cost airfares is growing annually, it is an opportunity for the company to expand its operations and thus, gain profits. Wizz Air carried 11 million passengers in 2011, a growth of 15% (Wizz Air, 2012). An opportunity to get over the client base of Malev Airlines arose as it went out of business. The demand for Wizz Air grew, however, it has to expand to match it, and not to lose it to the other competitors such as Ryanair and EasyJet. Wizz Air is committed to operate new, best-in-their-class technology aircrafts, maintained by some of the most reputable companies such as Lufthansa Technik. This enables the company to achieve a consistently high standard of service for travelers (Wizz Air, 2012). As technological innovations are developing faster and faster every day, the products which were top ones yesterdays are out of date today, because of the increasing competition they become cheaper to buy. Wizz Air is investing USD 100 million into expansion. According to XpatLoop news as of March 2012, the airline will add two Airbus A320 aircraft to its Budapest base, a 66% increase in overall capacity. The rates of unemployment are high in most European countries, according to Wizz Air their expansion in March 2012 will result in 700 new jobs. It will be not hard for Wizz Air to find new workforce, because there are not many choices for people where to work, they will agree to work for a smaller salary; this is an opportunity for the company to save some money for new investments.

Most businesses are going international these days, for this reason companys representatives have to travel around to conduct businesses abroad. As Wizz Air does not include a fee for the luggage in its immediate fare, businessmen can travel just with the carry on and safe a lot of money. The airlines of a particular country cannot provide solutions for the demand of the citizens of this particular country. Different airlines have their competitive advantages and disadvantages. Even though the competition is present, most European countries are open to the new airlines using the airports, especially as they are paying huge fees to the airports. The threats are similar to the opportunities, but they are opposite of them. People are tightening their budgets because of the economic falls. They try to use the most efficient ways of transportation, some people switch to the buses and trains when traveling around Europe. Because of the technological development many companies operate internationally through the internet communication. Employees are hired by skype interviews; buildings can be found and bought through the internet. The currency exchange rates are not stable; there can be losses in the countries where the currency weakens. On the other hand, operating in the countries with different currencies helps to weaken this affect. Another important factor for the airlines is the prices of the oil. Wizz Air is a low cost airline, and it is hard to serve their target group when the prices for oil rise. If there are terrorist attacks in the airplanes anywhere in the world, people develop fear, and fly less. Natural disasters can act as threats to flying; an example can be a volcano in Iceland which stopped all the flights for several weeks. Wizz Air has some primary competitors: Ryanair, Easyjet; if these companies decide to go to the same locations Wizz Air goes; it will be a very tight competition even though it is already happening, more overlapping can decrease the share Wizz Air has.

References Ryanair and its low cost flights in Europe | Marketing Plan | GRIN | Scholarly Paper (Advanced Seminar). Publish your essay, bachelor or master's thesis and term paper.. (n.d.). GRIN | Wissen finden & publizieren | Diplomarbeit, Masterarbeit, Dissertation, Hausarbeit, Referat verffentlichen. Retrieved February 6, 2012, from http://www.grin.com/en/e-book/87815/ryanair-and-its-low-cost-flights-in-europe Wensveen, J. (Director) (2010, February 23). THE AIRLINE INDUSTRY: Trends, Challenges, Strategies. Leadership and Policy Seminar Series. Lecture conducted from The University of Sydney Faculty of Economics and Business, Sydney

Wizz Air. (n.d.). Wizz Air. Retrieved February 6, 2012, from http://wizzair.com/about_us/company_information/?language=EN XpatLoop. (n.d.). Malv Is Dead, Long Live Low Cost Carriers? - Expat Life In Budapest, Hungary - Current affairs. Xpatloop.com - Expat Life in Budapest, Hungary - News, Events, Movies & More!. Retrieved February 6, 2012, from http://www.xpatloop.com/news/malev__is_dead_long_live_low_costs_ryanair_wizzai r_smartwings_air_berlin_jet2 XpatLoop. (February 3,.2012). Wizz Air To Invest USD 100 million In Budapest - Expat Life In Budapest, Hungary - Travel.Xpatloop.com - Expat Life in Budapest, Hungary News, Events, Movies & More!. Retrieved February 6, 2012, from http://www.xpatloop.com/news/69367

Exercise 2

Competitive Profile Matrix

The main competitor for Samsung Electronics in the phone industry is Nokia Company. CPM showed that both companies engage in a very intense competition, each having a competitive advantage of some sort, and a weakness in another area. Even though Samsung is behind at the moment, Forbes (2011) predicts that Samsung Electronics may win the market share and become the first one in the industry.

References: About Samsung - Samsung. (n.d.).Samsung US | TVs Tablets Smartphones Cameras Laptops Refrigerators. Retrieved February 7, 2012, from http://www.samsung.com/uk/aboutsamsung/ Samsung Looks to Overtake Nokia in 2012 - Forbes. (2011, December 29).Information for the World's Business Leaders - Forbes.com. Retrieved February 5, 2012, from http://www.forbes.com/sites/greatspeculations/2011/12/29/samsung-looks-toovertake-nokia-in-2012/ Samsung vs Nokia Market Share Competition | Everything About Gadget. (2011, November 9). All Gadget News And Blog. Retrieved February 5, 2012, from http://gadget.satellite-stream.com/samsung-vs-nokia-market-share-competition.html

Exercise 3

Porters Five Forces Analysis

The Pharmaceutical Industry 1. Rivalry among competing firms The rivalry among competing firms is intense in the pharmaceutical industry. The companies compete in advertising strategies, pricing, and new product development and introduction. The pharmaceutical market share is growing in Europe, and this fact makes rivalry a little less tight. 2. Potential Entry of New Competitors There are many barriers to entry the business. The biggest barrier is R&D which needs to be done before the new company enters the market. Many companies already have economies of scale which is a threat to the potential firms. The access to the distribution channels become an obstacle. Nevertheless, new firms may come with fresh ideas, newer technology. Overall, there are many barriers, so the threat of entry is low. 3. Potential Development of Substitute Products The substitutes for existing products can be generic products. However, there are few or no substitutes for the drugs after they are fully developed. 4. Bargaining Power of Suppliers There are different suppliers in the pharmaceutical industry. If the company is branded, its suppliers will have high power for bargaining because the threat of reducing quality or increasing the prices will affect the company a lot. Pharmacy is a very original industry, and it is hard to switch from one supplier to another. However, if the company buys chemicals they are standardized and suppliers can be changed easily. Furthermore, labor is another category of suppliers; thus there is a very high unemployment in most countries the labor would have low bargaining power if they ask higher wages. 5. Bargaining Power of Consumers Consumers in the pharmaceutical industry can be powerful if they buy large quantities of the product. Government is a very costly consumer as it demands the reduction of the prices. References: Planning, u. t., & most, C. R. (n.d.). Competitive Strategy in the Pharmaceutical Industry. Jobs Australia - Pharmaceutical and Medical Professionals. Retrieved February 8, 2012, from http://www.pmpconnect.com/pharmaceutical _competitive_strategy.htm

The Textile Industry 1. Rivalry among competing firms Rivalry among competing firms in textile industry is high, and we can see it because the products produced are generic, there are some legal tariff threats to the imported textile, and currently some of the largest firms on the market have only a 10% market share.

2. Potential Entry of New Competitors The threat of entry is pretty low because before the entrance a firm has to invest a lot into the manufacture technology. There is a lack of the access to the raw materials, as they mostly grow in Asia, so Asian firms have competitive advantage in entering the market.

3. Potential Development of Substitute Products More and more substitute products are developed in the textile industry. Synthetic chemicalbased materials were developed, they are cheaper to manufacture, and therefore, they became threats to the natural textiles. Even though natural textiles are more expensive, the trend in the industry is in favor of them. Many people prefer natural fabrics and are ready to pay for them premium prices.

4. Bargaining Power of Suppliers Raw materials are available, and the cost of switching is not too high. Although, sometimes there are synthetic products which may be in short supply at the moment.

5. Bargaining Power of Consumers Consumers have some degree of power, and they want lower prices. Nevertheless, because many costs are evolved for the final product, the power is not too high.