Action planning
The executive is the most significant position in an organization. This is because it is charged with the responsibility of setting long term goals which seek to help the organization grow financially. Although the executive is not involved in the day- to- day running of an organization, nonetheless, it establishes formulas and strategies that are implemented by managers working under them. The success and failure of business is mostly dependent on decisions made by the CEO. Sound management results in massive profitability while negligence and non- compassing decisions may lead to a financial crisis.
Leadership and culture are always at the heart of every successful business. At Jet Blue airline, Neeleman, the CEO and president of the airline, stresses on the importance of customers who forms the bulk of their business. “JetBlue is true to its business model, in which it promises its passengers a comfortable seat with a television, monitor, peanuts, and service with a smile. All the airlines are struggling to remain afloat but that does not mean that passengers have to suffer too.”
When an action is taken, the top management must identify the type of people they are going to transact business with. This is important as people of different social strata have different tastes. Another important thing to ensure satisfied customers is developing a good business culture that recognises the customer as part of the business and not an outsider (Ireland, Hoskisson and Hitt, p. 57). Another important aspect of good business is innovation. Although Neeleman was a university drop out, he founded Jet blue airline, the first airline to offer electronic reservations in 1993. Clearly, this is a true mark of innovation. The ability to be flexible and take advantage of opportunities is paramount in the growth of the company. For instance, JetBlue analyses the cost of offering food to the passengers, and realises that it would incur more expenses. As a remedy, the company introduces snacks. Although they are cheaper than actual food, they are receiving higher ovations than food.
Analysing the current strategic position and new strategic position
JetBlue has witnessed three distinct revolutions in its operation. The first two revolutions have been experienced in the current period of its operation with Neelam as the CEO. The first stage was characterised by growth and expansion of the company. The second stage involves fighting for survival due to stiff competition. The last phase is the recuperating period.
Growth and development
Neeleman started the airline business in 1994 as a partnership deal with Morris of Morris Airline. By 1992, the partnership had obtained a certificate from the FAA to start their operation as a regular airline with their base in Salt Lake City International Airport. In 1993, Southwest took over and Neeleman was employed as an executive. Between 1993 and 204 was a period characterised by growth and expansion (Tsao, p. 10). The company reached the exponential phase of growth in late 2003 and at this point, it ceased to generate any profits. In the second quarter of 2004, the airline registered a drastic drop in profits. This was attributed to the occurrence of natural factors which had not been accounted for and there were also no provisions to cater for these.
In the fight for survival, the company embarked on measures to prevent a looming sinking crisis and a possible management under receivership. Jet blue decided to shift attention from long distance air travel to short travels. They also reduced the capacity of their airplanes from 162 to 156 in order to reduce the consumption of fuel. In the recuperating stage, the Jet Blue airline comes up with a return to profitability plan strategy in order to regain the position they held before the off slopes. The change of management is also going to make a positive impact in restoring the financial strength of the company. Neeleman says “when you are the founder and an entrepreneur and you get mired in the operation, it’s not good for anybody:”
Recommendations
The Provision for disaster management: These monies would cater for any unexpected inconveniences. Although it increases on operational costs it saves a great deal when the risk occurs. In the Jet blue case, the company was hit hard by the sudden rise in the prices of fuel and they had only bought a few barrels.
Employing expertise
People with general know- how and expertise should be consulted before venturing to business without assessing the detrimental effect they may cause the business. Jet blue Airline failed to take the recommendation from the analyst who had warned them from purchasing the Embraer-190. This resulted in the company incurring more costs in training employees and meeting the high cost of maintenance.
Works Cited
- Ireland, Duane, Hoskisson, Robert and Hitt, Michael. Understanding Business Strategy (2nd Ed). Mason, OH : South–Western Cengage Learning, 2009. Print.
- Tsao. Amy. Thinking of taking off with Jet blue? Business week Journal. 2002.