APPENDIX 1 EXHIBIT 1- Layers of the business environment 1. The macro - environment (using the PESTEL model) 2.

. Industry (or sector) (using 5 forces model) 3. Competitors ( using strategic groups, market segments and critical success factors) EXHIBIT 2 - PESTEL ANALYSIS Political Hungary in 2004 joined EU Strong government power in US to ban/regulate alcohol and distribution Hungarian government did not offer any trade support to the nations wineries Economic Exchange rates Duties and import costs (abolished within EU but exist for US) Hungarys import duty reduced to one-third due to EU Cost of obtaining multiple wholesale licenses Capital intensive industries Lack of resources in Hungary Hungarian government did not offer any trade support to the nations wineries Baby boomers have the disposable income Social Change in eating habits and seek for alternative beverages Consumer types Baby boomers are increasing in numbers Technological Internet-based alcohol sales between states Environmental Cost of land/availability in old and new world Favorable weather conditions in Hungary Legal Fragmented legal system in US on distribution of alcohol US can be considered as 50 separate countries. A state government has the right to ban alcohol, set up state run distribution outlets Some jurisdictions prohibit direct shipping of alcohol between states Fragmented distribution system Complicated and costly to obtain wholesale license Many states required an independent third-party wholesaler by law EXHIBIT 4 SCENARIO ANALYSIS Nich market with quality wine in the existing states Nich market with quality wine in all states EXHIBIT 5 IDENTIFY KEY DRIVERS Baby boomers ready and having the disposable income for quality wine Nich market

US is a huge expanding market

EXHIBIT 6 - FIVE FORCES ANALYSIS 1- Threat of entry (complex legal system, barriers to entry due to government actions, MMI experience in the market so difficult for new players, existing big players dont se MMI threat because it concentrates on niche market) 2- Threat of substitutes(weak, wine has its own market) Scope of increase per capita consumption from 2.5 in US to at least 8 (the case in Europe) via getting share from other beverages. 3- Bargaining Power of buyers(MMI licence in 26 states, force is weak since no concentrated buyers, not possible for buyers for backward vertical integration, chance to switch supplier since it has direct competition) 4- Bargaining Power of suppliers- (Force is weak since Monarhia Holdings and Morarchia Borazati supply MMI) 5- Competitive Rivalry(High entrance barriers, weak buyers power, competition not equal size, concentration on niche, satisfactory industry growth lead to decreased rivalry. Increased rivalry because of low differentiation