Essay About Profitability Of The Company And Strategic Alliances

How to Increase the Profitability of the Company and Keeping the Company Working?
[pic 1]     APPLIED MANAGEMENT JETBLUE’S CASEFACULTAD DE CIENCIAS SOCIALES Y HUMANÍSTICASESPOLTEACHER:María Cecilia morenoELABORADO POR:JOSÉ ARÉVALO             11/01/2016Key IssueHow to increase the profitability of the company and keeping the company working?SWOTStrengthsWeaknessesCustomers loyaltyLower fares than the industryOffers many destinations to their clientsHigh revenuesDevelop their own aircraft by their own university.High operating expensesHigh interest expensesLow or none profitability to their shareholders.The eighth biggest airline with a low market share of 4.2%Lack of system and headquarters capacity to respond to situations like the storm.OpportunitiesThreatsGet airplanes with higher fuel efficiencyMaking strategic alliances with other airlinesDemand growthOpen up new destinationsOffering their clients refunds and attendance in case something shows upRising jet fuel pricesThe emergence of new competitorsIncrease in wages policiesChange in government policies about participation of foreign companies on local companies’ equity.Hostile takeovers.Strategic AlternativesMaking strategic alliances with other airlines in order to split the costs and get profits.ProsConsConsiderable decrease in our expenses.New routes would be opened up easily.They might get the know-how of our service.JetBlue would lose its independence.Open up new destination by itself where the fuel is cheaper and closing those routes that generate high operating cost and not big revenues.ProsConsConsiderable decrease in our expenses in fuel and wages.New routes would let us charge fuel at a lower cost.We might lose clients from the destinations we close.It might take a longer time to open up the routes than in an alliance. JetBlue might keep the destinations they have and charge more in their prices and reducing staff that they consider is not useful to reach their goals.ProsConsConsiderable decrease in our expenses.Because of our clients loyalty and a slightly increase on the prices, revenues will increase.They have one of the most efficient staff in the industry, so they would give their service to the competition.They should redesign the responsibilities of the leftovers jobs and it might take time to redesign it properly.RecommendationMy recommendation for this case and try to fix the situation is to make the strategic alliances with other Airlines about the same size of us because we need to start generating profits for our shareholders inmediately. These alliances will help us to adquire inmediately new destinations without having develop an extensive logistic to decide with routes should be open and how much them will cost us and, obviously, it would take a long time. Unfortunately, we dont have the enough Budget to develop our own routes without having to share the revnues and taking the risk that the other Company might get the know-how of our service. Besides, firing many of our employees would decrease the level of attendance to our customers with is one of our outstanding points in our Company and we would let them free to go to other companies and help them to minimize the differentiation we have developed.