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How to Increase the Profitability of the Company and Keeping the Company Working?

Autor:   •  January 11, 2016  •  Case Study  •  328 Words (2 Pages)  •  564 Views

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  • Key Issue

How to increase the profitability of the company and keeping the company working?

  • SWOT

Strengths

Weaknesses

  • Customers loyalty
  • Lower fares than the industry
  • Offers many destinations to their clients
  • High revenues
  • Develop their own aircraft by their own university.
  • High operating expenses
  • High interest expenses
  • Low 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.

Opportunities

Threats

  • Get airplanes with higher fuel efficiency
  • Making strategic alliances with other airlines
  • Demand growth
  • Open up new destinations
  • Offering their clients refunds and attendance in case something shows up
  • Rising jet fuel prices
  • The emergence of new competitors
  • Increase in wages policies
  • Change in government policies about participation of foreign companies on local companies’ equity.
  • Hostile takeovers.

  • Strategic Alternatives

  • Making strategic alliances with other airlines in order to split the costs and get profits.

Pros

Cons

  • Considerable 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.

Pros

Cons

  • Considerable 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.

Pros

Cons

  • Considerable 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.

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