Analysis of Business Organization

For team leaders of the Strategic Planning Committee, perspectives regarding Porter’s Five Forces model are readily available. The aforementioned model is applied in the case of Jet Blue Airways Incorporated. Jet Blue Airways Corporation is a business organization that offers a passenger air transportation services to the public in the United States. The main office of the company is located at Queens BoulevardForest Hills, New York City. The company was founded in the year 1998 and has 9, 398 current full time employees. The subsidiary of Jet Blue Airways Corporation named Live TV and LLC are the resources in order to provide an in-flight entertainment programs and systems.

In addition, the airline carrier is considered low-cost and low-fare that serves up to 47 destinations at present time. The key executives of the company include Mr. David Barger as the Chief Executive Officer, Mr. Russell Chew as the President and Chief Operating Officer, and Mr. Edward Barnes who worked as the Chief Financial Officer, Chief Accounting Officer and Executive Vice President. Therefore, it can be said that Jet Blue Airways provide services with style and value.

The Porter’s Five Forces Model was developed by Michael Porter to be used in completing a competitive analysis of a particular business organization. The competitive strength of a company can be made known and understood. Wrong steps and incorrect business plans can be avoided, if we know the strength and weaknesses of the business organization. Besides, careful analysis and decision-making can be made during strategic planning of the company. The usefulness of the model also includes identification as to whether new services or products have the potential to be profitable. As such, success in the business endeavor can be attained. The said model is useful for analyzing where power can be found in business circumstances.

Based on Porter’s Five Forces model, there are five forces that determine competitive power in a business situation and these are supplier power, buyer power, and competitive rivalry, threat of substitution and threat of new entry. First, Jet Blue Airways must increase the number of its suppliers of each key input, so that power of suppliers can be lessened. Assessment on how easy suppliers can increase their prices must be prioritized. The factors that must be assessed include the number of suppliers of each product needed, uniqueness of service of product, strength and control over the company and cost of changing from one supplier to another. The rule of the supplier power is that, the more the company needs supplier’s help and the lesser the choices of suppliers, the more powerful the company’s suppliers are. Second, Jet Blue Airways must analyze how quick buyers can drive prices down. The buyer power is very strong if not taken seriously by the company. The factors that must be considered during analysis include number of buyers, importance of each individual buyer, and the cost of switching from one buyer to another. The rule is that there should be many buyers connected with the company to limit buyer power.

Third, Jet Blue Airways must be prepared on competitive rivalry. The primary consideration in this force is the number and capability of the company’s competitors. The company must continue to offer distinctive and unique perks and privileges for customers. Jet Blue Airways can gain strength amidst competitive rivalry if competitors do not offer the same perks and privileges that the company provides to its customers. Fourth, Jet Blue Airways must be mindful of the threat of substitution. There are similar services that can be found in other airline companies that a customer might choose such that, Jet Blue Airways must be careful of possible substitution.

And fifth, Jet Blue Airways must also be mindful for threat of new entry. There are many people who are capable of entering the established market of Jet Blue Airways. There are myriad ways to weaken the position of Jet Blue Airways in the market, and these include little time and cost needed for a competitor to compete effectively, situation wherein few economies of scale in place, and little protection of key technologies. Hence, Jet Blue Airways must have durable and strong barriers to entry, so that preservation of favorable position in the market can be held.

Finally, it is not easy to maintain fair advantage during a stiff business competition without strategic planning. The Strategic Planning Committee strongly suggests that Porter’s Five Forces Model must be used in analyzing the company’s position in the market nowadays. In that way, successful business venture would continue to pave the way for Jet Blue Airways.