Organisational Strategy: Challenges, Resources, Competitive Environment and Growth Options

This report analyses the key challenges faced by Wizz Air in the European market, evaluates its resources and internal business situation, analyses its competitive environment, and identifies strategic options for future growth in the international and European market.

Organisational Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Analysis of the key challenges the company will be facing in the external market in Europe
with the help of PESTLE Analysis.........................................................................................1
Evaluate the resources and internal business situation of the company in Europe................2
Analyse the competitive environments of the company in Europe........................................3
Directions and strategic options that a company can pursue for future growth both in
international and Europe market ................................................................................. 5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Organisational strategy refers to the set of strategies that comprises of series of many
actions and steps that companies take to achieve their long term goals. Wizz Air, legally
incorporated as Wizz Air Hungary Ltd. is a aviation carrier company established in the year 2003
and is headquartered at Budapest, Hungary. The report will present an analysis of the key
challenges that company faces with the help of external environment in Europe. Moreover, it will
cover analysis about resources of company and internal business situation in Europe. Further, the
report will cover analysis about competitive environment of an organisation in Europe and at the
end it will identify the methods for the company to expand in the international market.
MAIN BODY
Analysis of the key challenges the company will be facing in the external market in Europe with
the help of PESTLE Analysis
The flight operations are increasing rapidly, Wizz Air Ltd. Has to face certain challenges
in their operations that may be political or economical in nature. PESTLE analysis can be done to
understand the various environmental factors that affects the business of Wizz Air. With the help
of PESTLE Analysis the company could understand the opportunities and challenges which has
been created due to certain forces such as political, economic, social, teachnological, legal and
social in the field of aviation.
Political: These factors plays a very significant role in the industry of aviation and there are
various reasons for growing importance of political factors in the industry of aviation in UK
country. The Political stability and favourable government policies helps to create attractiveness
and business-friendly environment in the overall aviation market in the UK (Clifford, Fornadel
and Peters, 2021).
Economical: The economic factors and situations in a country has the direct impacts on the
profitability and operations of Wizz air. However, at certain times the economic conditions
of UK has suffered a lot for example the BREXIT situation creates uncertainty as well. Even
though Wizz Air has sustained its growth and profits by indulging its investments in
strategic areas like, customer experience and changing its business operating models to
adapt to the changes.
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Social: Social factors are based on numerous demographic factors and changes that plays a
significant role in the industry of aviation. Wizz Air focuses on safety, convenience, low
cost benefits and so on to enhance consumer experience to maintain its reputation and social
image of airlines companies (Loizia and et. al., 2021).
Technological: Technology is also a centric factor that affects the growth of airline industry
across UK. The Wizz Air has focused on the development of fuel efficient, safe aircraft
models and better sales and consumer support services to stay ahead in technological
advancements. The company has made improvenments on technical level in various areas
such as streamlining of website to the booking process on the online basis.
Legal: These are one of the major concern for aviation industry in the UK market where non
compliances to the legalities can result in major fines. Apart from convenience to customers,
passenger security and environment impacts there are laws related to labour and
employment, contract and aviation activities. The Wizz Air follows all the required legal
expectations in the UK as well as across many other nations.
Environmental: The environmental factors affects the aviation business across the UK due to
consistent rise in the awareness of climate change. The Wizz airlines has developed its most
optimum fuel efficient tanks that helps in complete combustion of fuel and releasees low
carbon in the air. This provides benefits to the company for sustainable growth and making
the environment healthy (Damayanti and Rahadi., 2021).
Evaluate the resources and internal business situation of the company in Europe.
For analysing internal business situation and resources of company of Wizz Air into
result-oriented manner then SWOT analysis can be considered as support system for finding out
the resources.
SWOT analysis of Wizz Air
STRENGTHS: Wizz Air is one of the lowest unit cost between European Airlines according to
CAPA, CASK database. They also offer low fares as well as compared to all of its competitor
while remaining in money-making situation and thus drives towards claim and market share as
well(Šimková., 2018). They also have the important market share in its selected market and also
have the uppermost stage of ancillary profits in Europe. They also have strong financial
performance due to which they can perform into the out of box manner at organisational level.
They also have developed good track record of profitability.
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WEAKNESSES: Wizz air majorly dependent on summer months and their earnings are highly
seasonal in terms of nature. The also operates with lower frequencies as compared to its
competitors. It has particularly happened in that case when it is compared with full service
airlines and also against its other LCCs.
OPPORTUNITIES: It has further growth prospectives in particular continent such as
Central/Eastern Europe. First is that the region is inexpensively less developed than Western
Europe and therefore its GDP growth rate tends to be higher. Second is that transfer links and
economic growth with western Europe are increasing as as result of growth of European Union
to include several Central/Eastern European countries in recent years(Stöhring., 2017). The
company has lower unit cost from A321 orders and they also placed an order with Airbus for
purchase of 110 Airbus A321 neo aircraft. According to strengths of Wizz Air, they already
have high level of ancillary revenue. They also have further liberalisation that can open up new
market opportunities. The company has benefited from access to the liberalised EU market.
THREATS: The organisation has fierce competitor with Ryanair and digit one by seats overall
in its target region. Ryanair comes out to the front in countries where they both compete. To its
helpful impact on the Wizz Air's unit cost, THE A321 NEO is also expected to have at least
some negative impact on yield as it has more seats to fill compared with the existing fleet.
It has been analysed that according to strength of Wizz Air, the internal business situation
of the company is far better as compared to other companies because they can earn enough
amount of revenue with support of their customers(Вецко., 2018). The resources which has been
utilised within the company in terms of opportunity of an organisation supports for further
development and growth of Wizz Air.
Analyse the competitive environments of the company in Europe
The competitive environment of any organization involves the dynamic external factors that
basically involves the business functions and competes. In addition to this, it depicts that
more the sellers of the service or product more will be the competitive in the environment.
In context to Wizz air (Leisen, Steffen and Weber, 2019). It competitive environment
involves all the political, social, economic, legal, technological and environmental factors
that creates a major impact on the macro environment of the organisation. The changes
which occurs in the macro environment have a direct influence on the operations of the
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business but also influences the other business in travel and leisure industry. It basically
involves the porter five forces that helps in shaping the competitive and strategic landscape
of the business.
The political factors plays a significant impact in order to determine the impact it have
on the Wizz air and its long term profitability in a particular market or country (Yang and
Lin, 2020). In context to wiz air the organisation is having its operations in various countries
and is exposed to various risk factors and the political environment of each nation or
country. In order to run successfully in Europe, the organisation need to analyse few factors
that involves the trade regulations and tariffs which are related to the consumer services, risk
of militarily invasion, importance of the travel and leisure sector in the Europe’s economy,
legal framework for contract enforcement and other various factors before entering into the
market.
It involves factors such as interest rate, inflation rate, savings rate, economic cycle and
foreign exchange rate in order to determine the aggregate investment and demand in the
economy (Clarke and Gholamshahi, 2018). In context to Wizz holdings, the organisation
uses country’s economic factors such as consumer spending, travel and leisure industry
growth rate and various other factors. In order to enter in the European market, it is
important to consider the various economic factors that involves the stability and exchange
rates of the Europe currency, type of economic system in the countries of operation,
efficiency of the financial markets and government intervention in consumer related services
and free market, economic system type in the countries of operations, efficiency of the
financial markets , inflation rates, interest rates, business cycle stage etc (Cai and Li, 2018).
It basically involves ways of doing things and the society’s culture of a business in an
environment. It basically involves the attitudes and beliefs of the people plays a vital role in
the marketers at Wizz air holdings. In order to survive in the European market, the
organisation need to analyse few social factors that involves culture, leisure interests, skill
and demographics level of the population. As the technology is fast unsettling various
business across the board. The organisation should not only consider technological analysis
but should also focus on speed. In order to survive in the European market, it is very
important to understand the various technological factors that involves rate of technological
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diffusion, technology’s impact on product offering, impact on value chain structure etc
(Audretsch and Belitski, 2020).
It involves the liability laws and environmental laws that exists within the country. In
context to wiz air, the organisation need carefully understand the standards and
environmental factors that involves climate change, endangered species, recycling and
various other factors. It basically involves the institutions and legal framework which are
made in order to protect the intellectual property rights of a business. In context to wiz air,
the organisation need to consider few legal factors before entering into the European market
which involves data protection, discrimination laws, consumer protection , ecommerce etc.
Directions and strategic options that a company can pursue for future growth both in
international and Europe market
The international expansion strategies basically involves the multi-level strategies plans
and formal plans which are used by organisation in order to prepare themselves to enter in
the international market and lead to more growth prospects and more profits. In context to
Wizz air, there are various strategic plans and directions that help the organisation for the
future growth both in the international market and Europe (O'Dwyer and Gilmore, 2018).
The strategic plan basically involves the analysis of market, landscape and health of the new
target market. The market analysis basically involves market investment analysis, consumer
attitudes, market size and growth potential, state of economy etc.
The marketing strategy involves the marketing channels, brand positioning, marketing
KPIs and also the pricing evaluations based on market’s economic environment (Marquis
and Qiao, 2020).When a organisation expands its operations into overseas and European
market it helps in providing the company with benefits of long term risk mitigation.
Moreover in context to Wizz air, the diversified market presences helps organizations to
succeed better in the overseas market. There are various benefits of expanding company’s
operations in the European and overseas market as it helps in expanding the customer base,
cost effective product production, new market’s tax incentives and refreshing a lifecycle of
products (Gereffi, 2018).
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CONCLUSION
From the above report it had been concluded that organisational strategy plays a very
important role in implementation of strategies in the organisation in order to achieve long
term objectives of the business. In context to wiz air, the organisation has faced a lot of
challenges when it comes to external environment of the business. The report helps in
analysing the key challenges that the company suffered in the European market. In addition
to that it also helps in analysing the resources of the company and internal business situation
in Europe. Moreover it includes the analysis of the competitive environment of the
organisation in the Europe and identification of various methods of strategic options and
other ways in order to expand its operations in the overseas and international market.
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REFERENCES
Books and Journals
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sustainable high-performance micro-house concept in Indonesia. Journal of Asia
Entrepreneurship and Sustainability, 17(4). pp.49-74.
Loizia, P. and et. al., 2021. Measuring the level of environmental performance in insular areas,
through key performed indicators, in the framework of waste strategy
development. Science of The Total Environment, 753. p.141974.
Šimková, Z., 2018. Komunikační strategie portálu cestujlevne. com.
Stöhring, J. C., 2017. Analyse und Vergleich der Vermarktung einer Billig-und einer
Linienfluggesellschaft und der Auswirkung auf den Flugtourismus in Deutschland am
Beispiel von Lufthansa und Ryanair.
Вецко, Т. М., 2018. Удосконалення системи стратегічного управління підприємства в
умовах сталого розвитку (Master's thesis, Київ).
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Cai, W. and Li, G., 2018. The drivers of eco-innovation and its impact on performance: Evidence
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Clarke, T. and Gholamshahi, S., 2018. Developing human capital for knowledge based
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Gereffi, G., 2018. Contending paradigms for cross-regional comparison: development strategies
and commodity chains in East Asia and Latin America (pp. 33-58). Routledge.
Leisen, R., Steffen, B. and Weber, C., 2019. Regulatory risk and the resilience of new
sustainable business models in the energy sector. Journal of cleaner production, 219.
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Marquis, C. and Qiao, K., 2020. Waking from Mao’s dream: Communist ideological imprinting
and the internationalization of entrepreneurial ventures in China. Administrative Science
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O'Dwyer, M. and Gilmore, A., 2018. Value and alliance capability and the formation of strategic
alliances in SMEs: The impact of customer orientation and resource
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Yang, Z. and Lin, Y., 2020. The effects of supply chain collaboration on green innovation
performance: An interpretive structural modeling analysis. Sustainable Production and
Consumption, 23. pp.1-10.
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