Economic crisis – the profits are falling down
I. Problem definition
Many companies are facing to the problem due to the economic crises which torments the whole world since last year, i. e. “Hewlett Packard lost 13 % of their profit from last autumn” (Beránek, J., Hospodářské noviny [Economic News], 2009, translated by: Eliška Čerohubá). Many people have been released and the profits inevitable fall down. Companies have to change their strategies about gaining profit. Vodafone Czech Republic a. s. – “a company found in 2005 when took over a Czech telecommunication company Oskar” (www.vodafone.cz). “The company posted a 35% decline in first-half profit and lowered its full-year sales target amid a challenging market in Europe and competitive and regulatory pressures” (Fuscaldo, D., Vodafone Posts 35% First-Half Profit Decline, 2009). It’s necessary to think deeper and find any solution about this problem. “The company is targeting cutting costs by 1 billion pounds by 2011” (Fuscaldo, D., Vodafone Posts 35% First-Half Profit Decline, 2009).
Declining profits at Vodafone Czech Republic a. s. due to economic crisis.
II. Justification for problem
a) What information do I know?
I know that the economic crisis influences many companies. The impact is recognizable in the most branches of either industry or financial segment. The crisis started in USA and expanded to almost whole world. I know the percentage which Czech economy felt down – it’s around 2,5 % of GDP.
b) What information do I not know?
I miss the exact number about real profit and expenditures for the last year; it’s due to company policies.
c) What assumptions will I make because I lack certain information?
I will try to find out some solutions for this problem even I don’t have the proper information about the real numbers from the company. I will come up with some strategies which should be helpful for the company.