Phoo Myat Thwe

21059409
UMSDQ5-15-3
Business Strategy Exam
2566 words
Listed below are five different CSR initiatives that JetBlue are currently following. Use
Porter and Kramer' (2006) Creating Shared Value (CSV) framework to evaluate all the
initiatives and then decide which they should continue & discontinue.

JetBlue Airways Corporation is a major American airline and low-cost carrier headquartered in
the Long Island City neighborhood of the New York City borough of Queens. JetBlue is now a
global, award-winning travel company with a commitment to customers and communities. It is
currently trying to consider five different CSR initiatives and so this paper will discuss whether
they should continue or not by evaluating those initiatives with a CSV framework which includes
generic social impacts, value chain impact and social dimensions of competitive context.

The first initiative is that JetBlue is working closely with the Federal Aviation Administration
(FAA) on implementing an updated air transportation system which will allow them to fly more
direct flights and save on the fuel used. JetBlue had the experience of profitability challenges and
its investors worrying about the stretch of it, during the face of high fuel costs in 2005. Due to
this incident partly impacts on loss and flight cancellation. The existing air transportation system
impacts inefficient routes and flight planning and navigation, the mechanical issues and fuel
consumption which are everyday activities of airline operation. In addition, saving fuel impacts
on cost saving which can positively affect JetBlue's economic value,as well as directly
decreasing the social issue [carbon emission]. So, this first initiative matches with the value
chain impact by the CSV framework, which defines [.             ], and so, JetBlue should decide to
continue this process of updating the air transportation system. 

Second initiative is about “JetBlue have created the T5 farm at terminal 5 of JFK Airport New
York. The urban farm produces potatoes and herbs using organic methods and recycled
materials”. By creating this farm, although JetBlue could create the unique competitive
advantages such as local produce, health benefits and sustainability, Neither Jetblue is a food and
beverage company nor the ability to compete in the Aviation market. Producing potatoes and
herbs are not the everyday activities of JetBlue. This production is likely to solve or reduce
general social issues (food security) which is not significantly affected by JetBlue’s operation
and the inability to for long-term competitiveness. Moreover, the concerns of the shareholders
will turn to this creation because the consequences would not support profitability. Hence, this
initiative should be discontinued. 

The third initiative is about investing in start-up projects such as Joby Aviation, who are
developing fully electric passenger aircraft. The benefits of electric aircraft are the lower cost of
electrical energy compared to aviation fuel, the reduction of noise and exhaust emissions.
According to the literature by (Sou & Uyen, T., 2018), the aircraft with electric motor can reduce
14 decibel in noise production from the electric aircraft. Another environmental concern is the
effects of engine emission on climate change especially on global warming.  The effect of engine
emission can cause chronic respiratory diseases which are related to health concerns. Otherwise,
according to Aguilar, F. J. (1967), climate change (global warming) is stated as an environmental
factor and health concerns are mentioned as a social factor or environmental factor, among the
PESTLE factors which are considered as part of the external environment. Finally, noise
pollution and air pollution are social issues in the external environment that significantly affect
JetBlue’s long-term competitiveness. 
The fourth initiative is about partnering with The NC studying the value of Caribbean coral reefs
to motivate the conservation of coral. Also, one third of JetBlue's flights are to/from the
Caribbean. However, the social issue (25% of marine life would lose their habitat) is not the one
which is significantly affected by everyday activities of JetBlue and not the one which is affect
for long-term competitiveness and so this should not continued.

The first initial is about JetBlue has started to voluntarily offset the CO2 emissions of all
domestic US flights by funding projects that help remove CO2 from the atmosphere. CO2
emission can be considered as the social issue which will affect long-term competitiveness. And
it can be considered as well as funding projects to hep remove the emission ,and is currently
solving this issue which is significantly affected by JetBlue’s everyday activities. 

To sum up, five initiatives are B and D are in generic social impacts, A and E are in value chain
impact and C is in social dimension impact.
The Resource-Based View of the firm emphasizes the allocation of resources to
gain a competitive advantage (Barney, 1991). Evaluate the extent to which this
applies to the success of CEMEX utilizing the case study.

CEMEX is a global building solutions company and leading supplier of cement, ready-mixed
concrete and aggregates. This paper will evaluate the extent of CEMEX Mexico’s success by the
allocation of resources to gain a competitive advantage. The concern about gaining competitive
advantage will analyze through VRIO framework adapted from (Barney, 1991 and 1995)

Resources  Valuable Rare? Difficult to Well- Strategic

? Imitate?  organized Implications

Brand Reputation  Yes  Yes Yes Yes Sustainable

competitive
advantage

HRM Skills Yes Yes Yes Yes Sustainable

Competitive
advantage 

Deep relationship with Yes Yes Yes Yes Sustainable

distributors and competitive
consumers advantage

the manufacture of ready Yes No No Yes Competitive Parity 

mix 

Ownership of Yes No No No Competitive Parity

transportation vehicles

CEMEXNET Yes Yes Yes Yes Sustainable

competitive
advantage 

Construrama Yes Yes Yes Yes sustainable

competitive
advantage 

To provide a basis to begin mapping out and clearly understand what resources make the firm
succeed and provide competitive advantage. Intangible resources are brand reputation, HRM
skill, deepening relationships with distributors and end users and the rest of others are tangible
resources. 
CEMEXNET is valuable because of its value, “reliable, transparent and flexible. It is rare
because there is no satellite communication system in Mexico's cement market. It’s difficult to
rare because of driving best practice and standards as a defense. And it is well-organized to the
process of production and effectively managing orderfillment. So CEMEXNET is a sustainable
competitive advantage.

HRM skill is considered as valuable because of ability and knowledge for staff and training and
health and safety and it is . It is difficult to imitate becasue to attracts top talented staff depending
on its brand image “ global leader” and “attractive employer. It can be considered as well-
organized as it even trains for dangerous situations. So, this can be included in sustainable
competitive advantages. 

Construama network is valuable for independent retailers, because of the assistance and training
across many business practices (eg,marketing, staff training) and 90% brand awareness is the
proof according to case study. It is not just a chain but more than construction material chains.
So, it is rare in the market by looking at the growth of it and it is difficult to imitate because it is
derived from the concept of one stop shop and the brand reputation of CEMEX influence in
Mexico. 

The manufacture of ready mix and owning of transportation vehicles are competitive parity.
Since there are many other ready mix suppliers in the market, it is not rare and since anyone can
follow the steps of making ready mix, anyone can sell it so that it is not difficult to imitate. But
however, it has the value of ready mix , the right timing and logistics and ready mix process is
well-organized. Ownership of transportation vehicles have the values of reliability and flexibility
to use anytime. It is not rare to own a vehicle and easy to imitate (buy it) and it is not well-
organized. 

Brand Reputation is also a kind of intangible resource. By the VRIO framework, it is valuable as
it can improve trust, customer retention, and broad advocacy all lead to more sales. In case study,
due to the reputation of CEMEX, high calibre staff are interested in applying for jobs, that means
they trusted that “a global leader company” will offer the best experience and the security of
lives. 

CEMEXNET, Construama, the manufacture, occupying transportation vehicles 

It can be considered as CEMEX has the competency of having a strong distribution network
(which is a competitive advantage) to become stronger supplier power (capability) among the
competitors. This competency is valuable, rare and difficult to imitate and well-organized. From
this extent, CEMEX can even be considered as “Largest Supplier Power” which mean the
success of CEMEX. 
 

Jet Blue management decided to add a 'mint class' to increase their profits. Critically discuss
whether it is likely to do so using Porter's 1996, 2014) ideas, ensuring you discuss the effect on
the firm's value proposition.

JetBlue Airways Corporation is a major American airline and low-cost carrier headquartered in
the Long Island City neighborhood of New York City. JetBlue is now a global, award-winning
travel company with a commitment to customers and communities. According to the
management, they decided to add a 'mint class' to increase their profits. This paper is about the
discussion of the effect on the firm’s value proposition if they add ‘a mint class’ by using
Porter’s 1996 and 2014 ideas. 

Porter (1996) defines that value proposition is a statement which includes what customer needs,
which customer served and not to and at which price. In application of JetBlue, it served Budget
airline Passengers and they are not serving luxury passengers. They will fulfill the needs of
“comfort and space” onboard and egalitarian manners. The price is set as a low price. By Porter
(1996), trade off choices are made in the value proposition. However, Porter (2014), in the
statement of the 2nd trade off choices from lines of defense against imitation, in making that
choice you are also committing to what you are not going to do even if the alternative might be
attractive so it is meaningfully different. The types of customers who are not served have been
already mentioned in the value proposition by Porter (1996). Hence, according to Porter (2014),
JetBlue is not going to fulfill the needs which are meals, baggage transfer and economy class
manners and the premium price is not going to be set. 

By the 3rd lines of defense, to  deliver this proposition, comprises the three order of fit which is a
way for JetBlue to align the activities with its chosen strategy to achieve sustainable competitive
advantage. 

1st Order Fit: Simple consistency 

The activities which fit with the low-cost strategy of JetBlue are choosing less competitive
routes, single type of aircraft utilization, maintenance and training ticketless booking, fuel price
hedging, no baggage transfer and rigorous staff recruitment. 

2nd Order fit: Reinforcing fit

The activities which fit with each other are more leg room, no extra fees, sea-back TV screens,
free snacks and it’s True Blue reward system which produced free tickets quickly, the Egalitarian
manners.

3rd Order Fit: Optimization of effort

The activities which are fit to afford optimization are the use of high technology (TV screen,
Free WiFi), extraordinary service (unlimited snack, more legroom, no baggage transfer), lean
workforce (family culture,compensation (profit sharing plan), no union policy, team based
culture.

After Mint, the target segment at Mint is the Premium air travel segment -Economy passengers
(who are not going to served), Mint passengers will get large screen (the activity which does not
aligned with low cost from 2nd order fit) , Help-yourself kiosk for soft drinks (the activity which
does not fit with low cost strategy from 2nd order fit) and snacks, larger Seat back screen (which
seems aligned with 2nd order fit), Fist bag fee. So, these all addition are totally unaligned with
lines of defense and unfit with customer segment, unfit with needs as well because all these Mint
activities are fit with the commitment which are not going to do (mentioned in VP, trade off
choices) and Premium price is fit with the price which is not going to set. The addition of a Mint
class, could also attract more business travelers, who are willing to pay more for a better
experience, which can lead to more revenue for the airline. This could also help the airline to
offer more flights and routes, which could benefit budget passengers in the long run. Mint class
could also offer better services and amenities, which could result in a more pleasant flight
experience for budget passengers. Some budget passengers may be willing to pay slightly higher
prices for a more comfortable and convenient flight experience, while others may be more price-
sensitive and would prefer to stick with the budget options. Some passengers may be willing to
tolerate more crowded flights and less legroom in exchange for lower ticket prices, while others
may be more concerned with comfort and are willing to pay more for it. It's also important to
note that, budget passengers who have been loyal to the airline may be more likely to remain
loyal even if the airline adds a premium class, while passengers who are less loyal may be more
likely to shop around for other budget options. The risk of alienating budget passengers is that If
the airline raises ticket prices too much or makes other changes that negatively impact budget
passengers, it could risk alienating these customers.Overall, the main effect will be in chaotic
situation, which does not fit with existing value proposition and definitely cannot defense to
imitate.

 
References

Sou, Uyen T. (2018) "Electric Aircraft and the Environment: A Literature Review," McNair
Research Journal SJSU: Vol. 14 , Article 12.
https://doi.org/10.31979/mrj.2018.1412 https://scholarworks.sjsu.edu/mcnair/vol14/iss1/12.[19

Aguilar, F. J. (1967) Scanning the Business Environment, New York:Macmillan Company. 

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management,
17: 99-120. [especially pp. 99-103 and 105-112].

Barney. J. (1995) Looking Inside for Competitive Advantage, Academy of Management

Executive, 9, 4: 49-61