Jet Blue - Strategic Management - Assignment Example

Jet Blue Part One What is the most important problem facing Jet Blue The most important problem that Jet Blue is facing is their ability to sustain their enormous growth in the industry. Jet Blue started operations in 1999 following Southwest's low cost solution but with value added in-flight features. After the 9/11 attacks, Jet Blue was one of those few airlines that managed to remain profitable. Banking on the success of initial years, Jet Blue expanded its services, destinations and airplanes to provide its travelers more travelling options at a low cost. This success story was one of the greatest until some competition, Ted (Delta) and Song (United) started to take away its customers. Jet Blue embarked on an ambitious expansion plan, adding new planes and routes much faster than it added passengers. With the added capacity for more passengers, but customer base falling due to competition, Jet Blue started to face its most crucial problems. The profits started declining until in 2006 Jet Blue reported its first ever loss. Jet Blue could not utilize its planes to full capacity to meet the increasing fuel charges. Till now, Jet Blue hasn't been able to recover fully although the company is profitable again. (Press Release - Jet Blue, 2006) (Kahn, 2004) 2. What recommendation(s) would you make to Jet Blue, and in what order of priorities Jet Blue needs to take some drastic actions to realize its full potential once again. Here is a list of recommendations that Jet Blue should follow. a) Focus on the core activity i.e. giving a relaxing low cost flying solution to the customers b) Sustain competitive advantage through offering unique, difficult to replicate and flexible in application services (Kotelnikov, 2001) c) Balance customer satisfaction and competitive market forces with internal cost and innovative growth. (Kotelnikov, Balanced Business System, 2001) d) Sell of its extra airplanes that are being rarely used e) Remove routes that don't break-even or are not profitable f) Invest the money received from selling planes in advertising and by offering lower fares to the customers g) Remain committed to the work 3. How do you balance between your commitment to shareholders and your commitment to the community The shareholders of a company want higher returns on the shares in the form of dividends and value of the share. On the other had, a community doest care what returns the shareholders get. They want the company to conduct a business that either gives a positive return to the community or does not hinder the community in either way. To balance between these two, a company must realize that most of the shareholders are a part of the community; hence they would want the well being of the community as well as their own interests in the company. Therefore a company should concentrate more on the needs of the community which eventually would be in the best interests of the shareholders as well. Part Two The business firm should try to get useful information about competitors by: 5 - Careful study of trade journals - This is secondary research which will help in developing business. 1 - Wiretapping the telephones of competitors - Its illegal and unethical therefore it must never be attempted 4 - Posing as a potential customer to competitors - This may be unethical since you won't be actual customers, however important information can be gotten this way. 2 - Getting loyal customers to put out a phone "request for proposal" soliciting competitors' bids - This is ethical since you don't your the customers actually don't need the bids therefore this practice is not encouraged. 5 - Buying competitors' products and taking them apart - after buying something, it becomes your property (unless stated otherwise) therefore taking it apart to analyze is okay. 2 - Hiring management consultants who have worked for competitors - consultants are not your employees thus this practice is not appropriate since it would be unethical if consultants give some information about the competition 1 - Rewarding competitors' employees for useful "tips" - this is giving bribes and it is completely unethical and may also be illegal in some nations therefore it must never be attempted 5 - Questioning competitors' customers and/or suppliers - questioning is fine as important information can be gotten, however there should be no force involved to answer the questions 1 - Buying and analyzing competitors' garbage - it is completely unethical and may also be illegal in some nations therefore it must never be attempted 1 - Advertising and interviewing for nonexistent jobs - it is completely unethical therefore it must never be attempted 4 - Taking public tours of competitors' facilities - if public tours are open, then it is okay with the competitor to share its company's secrets hence this practice is okay 3 - Releasing false information about the company in order to confuse competitors. 4 - Questioning competitors' technical people at trade shows and conferences - questioning is fine as important information can be gotten, however there should be no force involved to answer the questions. Also it depends on the technical people how much information is okay is give out 5 - Hiring key people away from competitors - this is okay since a fair employment game is played to hire competitor's employees 5 - Analyzing competitors' labor union contracts - if union contracts are open to public, then its okay to view and analyze them 1 - Having employees date persons who work for competitors - this is unethical since this is done only to extract information from the competitors without their knowing it. 1 - Studying aerial photographs of competitors' facilities - it is completely unethical and may also be illegal in some nations therefore it must never be attempted Works Cited 1) Kahn, J. (2004). Investors Head For The Exits At JetBlue. Retrieved January 8, 2008, from CNN Money: http://money.cnn.com/magazines/fortune/fortune_archive/2004/02/23/362203/index.htm 2) Kotelnikov, V. (2001). Balanced Business System. Retrieved January 8, 2008, from 1000 Advices: http://www.1000advices.com/guru/business_success_balanced_wheel_vk.html 3) Kotelnikov, V. (2001). Sustainable Competitive Advantage. Retrieved January 8, 2008, from 1000 Advices: http://www.1000advices.com/guru/strategy_competition_sca_vk.html 4) Press Release - Jet Blue. (2006). Retrieved January 8, 2008, from Jet Blue: http://investor.jetblue.com/phoenix.zhtmlc=131045&p=irol-newsArticle&ID=942110&highlight= Read More