BUS630: Managerial Accounting
Instructor: Oscar Lewis
April 25, 2011
1. What is JetBlue strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion?
Product leadership and customer value proposition are definitely Jet Blue’s strategies for success. They pride themselves on low fares and great customer service. They are also focused on bringing low airfares to customers that need low fare options to fly to destinations with high airfares. Jet Blue has been so successful in their strategies that they have the highest percentage of seat capacity utilized. They have certainly created a winning formula.
2. What business risks does JetBlue face that may threaten its ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks?
Jet fuel prices and operating costs are two of the business risks that Jet Blue faces. An example of a control activity the company could implement to reduce these risks is putting into place a contract that puts jet fuel at a fixed price for a certain amount of time. In addition, another possible risk is foreign exchange and a contract should be entered to protect their proceeds. JetBlue’s workforce could seek to unionize. This process could result in work slowdowns or stoppages and it could increase operating expenses. Control activities: Establish a Human Resource Management Department that proactively works with employees to ensure that their morale remains high and that they feel fairly treated.
3. How can the concept of unit level activities be applied to an airline? More specifically, what are 2 examples of unit level activites for JetBlue? What steps has JetBlue taken to manage these unit level activities more efficiently?
In a manufacturing context, a unit refers to an...