Organizational Strategy: Wizz Air's Challenges and Growth in Europe

This report analyzes the organizational strategy of Wizz Air, a low-cost airline headquartered in Hungary, focusing on the challenges it faces in the European market. Using tools like PESTEL, SWOT, VRIO, and Porter's Five Forces, the report examines the external environment, internal business situation, competitive landscape, and potential strategic directions for future growth. Key challenges identified include political and economic factors, technological advancements, and environmental concerns. Internal analysis reveals strengths in distribution management and supplier relationships, but weaknesses in workforce attrition and financial planning. The report concludes by suggesting strategic operations and directions, such as market penetration, market development, product development, and diversification, to ensure sustainable growth for Wizz Air in both European and international markets. Desklib offers a variety of resources, including past papers and solved assignments, to aid students in their studies.

Organisational
Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Analyse the key challenges facing the company in the external environment in Europe...........3
Analyse the internal business situation and resources of the company in Europe......................4
Analyse the competitive environments of the company in Europe.............................................6
Strategic operations and directions could the company peruse for the future growth both in
Europe and international market.................................................................................................7
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Organizational strategy refers to the set of actions which is used by organization for
achieving the organizational vision, mission and objectives for long time. With help of using
different strategies the profit, productivity and work efficiency of the organization are easily
increased. The company which is chosen for analysing the challenges faced by the organization
is Wizz air. Wizz air is a low cost career air line company and is headquartered in Hungary. The
company was established in 2003 and main aim of this company is to facilitate best services to
consumers at the time of travelling. Various challenges are described in this report which was
facing by the organization at the time of running their operational activities. This report are made
on the basis of secondary data which includes newspapers, journals, magazines and from other
sources. This report also covered on the basis of evaluating internal factors with in the
organization. This report are also prepared with help of using different methods which includes
PESTEL, SWOT, VRIO, Porters five force model and so on. This method is highly essential for
evaluate the competitor effectively.
TASK
Analyse the key challenges facing the company in the external environment in Europe
PESTEL analysis is a tool which is utilized by the organization for examining macro
external factors. These factors are highly responsible for decreasing or increasing the
productivity of organization in various aspects which are described below -
 Political – In this stage company faced various challenges in political manner (Bojadjiev,
2019). It includes government rules and regulations, political stability and taxation
system. In context to Wizz air, due to their global operational activities they faced
difficulties to manage the tax and policy system effectively. It leads to decrease the
productivity of company in political manner.
 Economical – It refers to those components which has a major impact on company's
departmental and operational functions economically (Kantabutra, 2020). It includes
organizational growth, unpredictable inflation and disposal income of consumers and so
on. In context to Wizz air, due to world wide service activities management decided to
maintain the price affordable and low. Because all customers has different income level
and with the help of this strategy of this strategy profit are easily increased.

 Social - It refers to those components which are responsible to influence the attitude,
desire and behaviour of customers (Kodama, 2019). It includes buying habits, population
growth and health consciousness. In context to Wizz air, management maintained
effective work culture in their company in the form of facilitating best service to
customers. In good work culture effective attitude are maintained by employees towards
consumers. All these elements are helpful for maintaining relations with users for long
time.
 Technological – It basically refers to those components which faced by company in form
of technology (Lestari, MUHDALIHA and Putra, 2020). It includes use of artificial
intelligence, communication systems and social media. In context to Wizz air, due to
high booking by customers in specific period management decided to use effective
payment system with help of using AI technology. In this technology payment are done
in fast manner and stress are also reduced for employees.
 Environmental – In this stage organization get affected naturally by the environment
which includes increasing pollution targets, shortage of raw materials and so on. In
context to Wizz air, management faced high difficulty in weather forecasting because in
weather forecasting equipments are not worked properly. It leads to enhance the ticket
cancellation chances of the customers which create threat for the profit of organization.
 Legal - It refers to the legal norms and government activities which affects the
organization legally and directly in their operational activities. In context to Wizz air,
management must follow the safety and advertising standards and wage system in thir
organization which was implemented by government. It leads to increase the productivity
of employees within the organization for long time.
Analyse the internal business situation and resources of the company in Europe
SWOT Analysis refers to the method or tool which is used by organization for identify
their strength, weakness, threat and opportunity which are described below -
Strength includes -
 Strong distribution management - Due to worldwide operational activities Wizz air has
the strong distribution network which leads to increase market share and profit of
organization easily.

 Having reliable suppliers - Wizz air has the reliable suppliers which is highly essential
for serving best quality food products to customers in time.
Weakness includes -
 High attrition rate in workforce - If we compared with other airline industry the
employees of wizz air are leaved their job in large number (Nurcholis, 2021)x. Because
company did not give proper training and wages to employees.
 Financial planning - Due to focusing on low cost pricing company are not able to
providing best quality service to customers. It leads to decrease the profit of organization.
Threats includes -
 Shortage of talented employees – It create threat for organization because it is not
possible for single owner to keep eye on every branches (Ocasio, Laamanen and Vaara,
2018). Due to this problem profit are not easily increased.
 Use of new technology – It creates threats for organisation because when made
comparison with other competitors, management did not facilitate watching movies in
their airlines. It leads to create negative impression in the minds of the customers.
Opportunities includes -
 Use of different pricing strategies – It means that management must fix different prices
for all customer segments according to season. This strategy is highly beneficial for them
to enhance their productivity in long term.
 Providing additional benefits – This strategy is highly useful for attract large number of
customers with facilitating additional features such as providing discount offers, vouchers
and so on.
VRIO Analysis refers to the analytical tool which is used by organization for evaluating
company's competitive advantage and their resources. In this process strategies are developed by
organization for achieving their success in long term. VRIO stands for valuable, rare, imitable
and organized. And in this model assessment are made systematically.
 Valuable - For wizz air organization financial resources and good quality food products
are the most important asset for them. With the help of these resources company easily
increase their revenue and market share easily (Ojo and Mellouli, 2018). When company

facilitate best quality products to customers then organization easily increased their value
in the minds of users.
 Rare - Wizz air is one of the company who provides better wages and effective positive
work environment to their employee's for encourage them. This strategy helped the
workers to polish their skills and talent which is highly essential for organization to
maintain their behaviour and attitude good towards customers for long time.
 Imitable - The supply chain management of the wizz air is highly imitable from other
competitors because their distribution channel are very costly (Seo and Kim, 2021). The
main reason for increasing cost is the use of AI technology in their airlines and in
organization. Because with the help of this technology activities between the company
and customers are done in fast manner which includes booking of flight tickets and so on.
 Organized – Wizz air is one of the company who organized their activities in systematic
manner from top to lower level and also with the consumers. It means that with help of
effective communication the flight are hold by authority for five to ten minutes if the
customer getting late. This shows that problems of the customers solved in time if they
face any type of difficulties.
Analyse the competitive environments of the company in Europe
Porters five force model is a tool which is used by utilized by organization for
evaluating the current market situation. The factors which are considered for analysing the
competitor or market are described below -
 Threats of new entrants (High) – It basically refers to entering new product with high
tech specifications in the market by the competitors which create high threat for
organization. In context to Wizz air, management must made lot of investment in
research and development department for introduce new features in their airlines. It leads
to overcome this problem easily.
 Threat of substitute products (Moderate) – It refers to provide same substitute to the
consumers with high quality by the competitor airlines. It create moderate level of threat
to the organisation because customer preferences are changing day by day. In context to
Wizz air, it is necessary for management that they must maintain the stocks of products

substitute every time. It is helpful for maintaining customer satisfaction level towards
company for long period.
 Bargaining power of suppliers (High) – It refers to putting pressure on company by
suppliers for increasing price in their product (Ramazan, Öncü, and Mesci, 2020). In
context Wizz air it is high for company because for supplies profit is very important for
run their activities smoothly. Due to this reason company maintained sufficient margin
for suppliers in their product. It leads to maintain proper supply chain management for
long time with suppliers.
 Bargaining power of buyers (Low) – It refers to put pressure on organization by
customers for availing services and product at profitable and valuable pricers. In context
to Wizz air, it is high low for them because for consumer air line is the suitable choiuce
for saving the travelling. Due this reason management fix their prices affordable in all
season. This strategy influenced the customer to avail the services in long run.
Strategic operations and directions could the company peruse for the future growth both in
Europe and international market
Ansoff matrix is a strategic tool which is used by company to maintain their sustainable growth
in market between the competitors. In this process company mostly focused on four strategies
which are described below -
 Market penetration - In this stage organization mostly fused on increasing the sale of
existing product in existing market (Vithayaporn, 2021). Therefore it is necessary for
management that they must provide average and fair to consumers with additional
financial benefits. It includes facilitate meals facility to them at free of cost and so on. It
helped to increase the sale of the ticket and growth of company are increased easily.
 Market development – In this process organization highly concentrate introducing new
facility in a an existing market to customers. In context to Wizz air, authority must
provide high quality digital facility to consumers in the airport in their section. It includes
wifi facility, entertainment facility like watching movies, news and so on. When
customers received these type of facilities by organization then definitely positive word
of mouth spread easily.
 Product development - This strategy highly focused on developing new market with
help of using existing product. Therefore it is necessary for Wizz air that they must

provide additional benefits to consumers in service (Sen, Kotlarsky and Budhwar, 2020).
It includes complimentary drinks, ice creams at free of cost which leads to enhance the
buying power of consumers easily. This strategy also helped the organization to facilitate
new customers easily.
 Diversification – This process helped the organization develop new market and new
product both. In context to wizz air, management must introduce new flights and new
routes for increasing their connectivity between various countries and with customers.
Because this strategy is very helpful for increase convenience and satisfaction level of
consumers for long time. It also helped to decrease the travelling time of consumers.

CONCLUSION
After the analysis of above information it is understood that organization strategy is a
essential tool for company to handle any type of problematic situations easily. With help of using
various strategies by organization effective coordination and good relation are easily established
with consumers for long time. Effective relationship also helped to increase reputation and
portfolio of organization in long run. For keep the organization structure effectively supply chain
management and suppliers played the major role for achieving raw materials in time. Effective
strategy also helped the company to achieve their vision, mission and objectives successfully.

REFERENCES
Books and Journals
Bojadjiev, M. I., 2019. Development of Instrument for Measurement of the Organizational
Alignment-from Vox Organizationis to" Four Organizational Culture Types and Four
Leadership Styles. Universal Journal of Management., 7(5) pp.186-199.
Kantabutra, S., 2020. Toward an organizational theory of sustainability
vision. Sustainability, 12(3) p.1125.
Kodama, M., 2019. Business innovation through holistic leadership‐developing organizational
adaptability. Systems Research and Behavioral Science, 36(4) pp.365-394.
Lestari, S. D., MUHDALIHA, E. and Putra, A. H. P. K., 2020. E-Commerce Performance Based
on Knowledge Management and Organizational Innovativeness. The Journal of
Distribution Science, 18(2) pp.49-58.
Nurcholis, L., 2021. The mediating effect of knowledge exploitability and organizational agility
on the relationship between marketing adaptation strategy and sustainable competitive
advantage. Contaduría y administración, 66(1) p.7.
Ocasio, W., Laamanen, T. and Vaara, E., 2018. Communication and attention dynamics: An
attention‐based view of strategic change. Strategic Management Journal, 39(1) pp.155-
167.
Ojo, A. and Mellouli, S., 2018. Deploying governance networks for societal
challenges. Government Information Quarterly, 35(4) pp.S106-S112.
Ramazan, K. A. Y. A., Öncü, M. A. and Mesci, M., 2020. the mediating effect of organizational
learning on the relationship between the cost leadership strategy and business
performance: A study on travel agencies. Journal of Economy Culture and Society, (62)
pp.323-343.
Sen, S., Kotlarsky, J. and Budhwar, P., 2020. Extending organizational boundaries through
outsourcing: toward a dynamic risk-management capability framework. Academy of
Management Perspectives, 34(1) pp.97-113.
Seo, S. and Kim, D., 2021. OSINT-Based LPC-MTD and HS-Decoy for Organizational
Defensive Deception. Applied Sciences, 11(8) p.3402.
Vithayaporn, S., 2021. Organizational effectiveness enhancement through the lens of lifelong
learning. ABAC ODI JOURNAL Vision. Action. Outcome, 8(2). pp.98-115.