V. Review of the Micro and Macro Environment 1. Micro Environment a. Competitors other tropical fruits (kiwi, banana, pineapple..

etc.) There are only few tropical products in the market due to the geographical difficulty of transporting it. Fruits, in general, are easily perishable and that is why most companies only manufacture fruits that are available within their area. In this regard, tropical products are normally priced higher than the other fruit products. Companies in this sector are few and normally do not compete directly with each other. Instead, they invest on differentiating their product to create their own niche in the market. other fruit juices Apple juice and Orange juice are the most common and probably have the biggest market share in the fruit juice sector. Both are widely distributed and can be seen in every supermarket. Based from Euromonitor, Si-Eckes Kft is still the leading manufaturer in Hungary with 24% market share. But like many others, they offer a wide selection of fruit juices that are almost similar

b. New entrants

Threat of new entrants is low. The capital needed to invest in manufacturing or just by distributing fruit juices is significantly high. In addition, existing firms already have established their own market shares and competing with them would be too costly for any starting company.

c. Substitutes Fruit juice is considered as a healthy drink and is sometimes priced higher than other beverages. Also, substitute products such as softdrinks and other ready-to-drink beverages are being offered to health conscious customers by either lessening the sugar content or by including additional nutrients.

d. Power of clients The bargaining power of the customers can be considered as high. It is attributed from the fact that beverage industry, specifically fruit juice sector,

already has numerous companies that offer the same product. The wide selections of juices, as well as other beverages, in the market give the customers more bargaining power over the companies.

e. Power of the suppliers The power of the supplying company in the juice sector as a whole is low. Both manufacturers and distributors could easily source their fruit juices from a number of suppliers. However, the suppliers of the coconut juice have medium to high bargaining power. Only few companies offer the product due to its very short shelf life, which is less than 3 weeks.

a. Geographical Hungary is located in Central Europe. About two-thirds of its territory is flat and lies less than 200 meters above sea level. It has two important rivers, which also serve as waterways the Danube and the Tisza and three major lakes Balaton, Velence and Fert. In addition, the country is rich in thermal and medicinal waters and springs. (Hungarian Chamber of Commerce and Industry 2009)

Climate:

Temperate; cold, cloudy, humid winters; warm summers

b. Economic The living standards of the people of the Budapest region are moderate to upperlevel. The private sector accounts for over 80% of GDP. Foreign ownership of and investment in Hungarian firms is widespread.

Average Gross Income: 71,500.- HUF (Hungarian Forint) per month Income Sources: Through work in urban industries whether service or product related. Products/crafts: Mining, metallurgy, construction materials, processed foods, textiles, chemicals (especially pharmaceuticals), and motor vehicles. Trade Partners: Germany 28%, Austria 10%, Italy 8%, Russia 7%

-Mark Aderholt, F. Strategy Coordinator, Budapest, IMB, and Hungarian Chamber of Commerce and Industry 2009 Being an export-driven, open economy, Hungary has been impacted severely by the global recession and the decreasing demand from its main export markets, especially in sectors such as the automobile and consumer electronics industries. Thus, in 2009, GDP has shrunk by 6.5 %, primarily due to slowing domestic consumption and a decline in investments. Due to its open policy toward foreign investment and central geographical location, the country is a preferred location for foreign direct investment. c. Political The President is the head of state, elected by Parliament and serves a largely figurehead function. Parliament is the dominant source of power in Hungary and is comprised of elected representatives in a single chamber. The Prime Minister is elected by a simple majority of the members of Parliament. (Hungarian

Chamber of Commerce and Industry 2009)

d. Legal STANDARDISATION, PRODUCT CONFORMANCE AND QUALITY The Hungarian Standards Board (Magyar Szabvanygyi Testlet) has exclusive rights to issue national standards and to endorse European standards as national standards; it closely co-operates with international bodies, primarily with the European standardization organizations. Businesses show a keen interest in establishing and authenticating quality and environment management systems corresponding to the requirements of the EU. The corporate tax rate:16%. The rate of general turnover tax (VAT) is 20%, and 5%. As of 1 July 2009 it is 5%, 18% and 25%. (Hungarian Chamber of Commerce and Industry 2009)

e. Cultural

Population: 10 million (UN, 2010) Capital: Budapest (2million approx.)

0-14 years: 15% (male 763,553/female 720,112) 15-64 years: 69.3% (male 3,384,961/female 3,475,135) 65 years and over: 15.8% (male 566,067/female 995,768) (2010 est.) Median age: 40 years old

Family Structures: Family oriented; with many families living together in multigenerational homes. Neighbor Relations: Privacy is highly valued in this society and relations between neighbors tend to be better in residential neighborhoods as opposed to high-rise apartment buildings where people are living in closer quarters. Authority/Rule: Elders and heads of families tend to have the authoritative role. Social and political committees are also respected and their decisions are generally enforced. Centralized decision-making process.

Cultural Change Pace: Slow to medium. With Budapest being a culture center, it is exposed to many more changes than the more traditional parts of Hungary. Change generally takes place in Budapest first and then spreads into mainstream Hungarian culture. Self Image: Hungarians often adopt a national defensive posture due to a history of invasions and conquering. Recreations: Outdoor sports such as soccer, rowing, canoeing, and nature hikes are very popular. Indoor team sports such as handball, water polo and table tennis are also very popular. Activities such as shopping, movies, theaters, concerts and relaxing at a coffee shop or srz (local pub) are popular activities for passing time and unwinding. Art Forms: Music, choir, painting, canvassing and sculpting. - by Mark Aderholt, F. Strategy Coordinator, Budapest, IMB

Hungarian Culture (Very high uncertainty-avoidance) The uncertainty inherent in life is felt as a continuous threat which must be fought High stress; subjective feeling of anxiety "I am under something more powerful than myself." The reason of my misfortune is others and life. Hungarians have a tendency to be under the circumstances, and to blame others for their misfortunes. Hungary's history: experience of being dominated. Psychologist Margit Honti says, We know what it is to be losers. We have all been losers for centuries. History professor Antal Szerb: Those who were thinking logically in Hungary always despaired. Tight rules for children on what is dirty and nem szabad (touching dogs, taking things in mouth, crawling, eating or drinking icecold things, walking around barefoot, etc.) Acceptance of familiar risks; fear of unknown situations and of unfamiliar risks What is different, is dangerous Teachers supposed to have all the answers To know the rules feels more secure than disturbing. Time is money and there is never enough Emotional need to be busy A value and an inner urge to work hard

Diligence is a value, means reliability and is to be respected Precision and punctuality of Germans are valued Motivation by security and esteem or belongingness Pessimism is a state of mind with Hungarians. Realism is a value. According to Hungarians, an optimist is a person who is poorly informed. Hungarians think that if a news is bad, it must be true. Optimist: I think we live in the best of all possible worlds! Hungarian: Im afraid so. In the end of folk tales "they lived happily until they died". http://www.filolog.com/hungarian_mentality_uncertainty.html