UWE Student ID: 24036041

Module code: UMSDQ5-15-3

Module title: Business Strategy

Word Count: 3071

Part A

In recent years, the role of business in sociological, environmental, and economic challenges has
increasingly come to light. Generally acknowledged businesses prosper at the expense of the
community at large (Porter and Kramer, 2006). Partnerships need to take the lead in reuniting
society and business. By addressing society's needs and challenges, the concept of shared value
may serve as a solution to the issue and provide benefit for everyone. According to Porter and
Kramer (2006), shared value is a new strategy for making money instead of focusing on
sustainability, social responsibility, or even charity. It's critical to reframe a company's goal such
that it emphasizes providing shared value rather than just maximizing profit. This change has the
potential to boost productivity and spur innovation throughout the world economy. A new set of
crucial best practices for all businesses is introduced by shared value, which has the potential to
be a major component of policy. This strategy not only promotes corporate success but also has
wider positive impacts on the economy and society.

The purpose of strategy is to choose a particular role and a distinctive value chain to deliver on
it, Shared value opens up for the “company” many new needs to meet, new products to offer, and
new customers to serve (e.g. produce company that emphasizes on environmental issues), and
new ways to configure the value chain. In their influential work, Porter and Kramer (2006)
contrast shareholder theory, which emphasizes profit maximization for shareholders, with
stakeholder theory, which broadens a corporation’s responsibilities to include all stakeholders
affected by its actions. They introduce the concept of value chain impacts, identifying the
positive and negative effects a company's operations have on society. Additionally, they discuss
the social dimensions of competitive context, emphasizing how improving societal conditions
like education and infrastructure can enhance a company's competitiveness. Porter and Kramer
advocate for integrating corporate social responsibility (CSR) strategically into core business
operations to create shared value that benefits both society and businesses. This article will use
Porter and Kramer's CSV framework to critically identify which projects from the previous
JetBlue should be implemented.
Initiative A, All earnings from the golf outing, which unites JetBlue employees and corporate
partners for a day of golf, are given to environmental charity. JetBlue provides shared value by
encouraging social participation and supporting environmental concerns through the organization
of this event. This program includes stakeholders in producing social and environmental benefits,
going above and beyond the conventional corporate philanthropy method. However, JetBlue's
value proposition and main business activities could not be directly aligned with the "Swing for
Good Golf Fundraiser". It is possible for shareholders to contend that the corporation ought to
prioritize undertakings that have a direct bearing on its financial outcomes and long-term
viability. Therefore, JetBlue might consider discontinuing this initiative.

Initiative B, Food trash from JFK's Terminal 5 is recycled by JetBlue in collaboration with
Royal Trash Services into fertilizer for farms. JetBlue helps to the creation of a circular economy
and lessens its environmental effect by employing trash recycling methods. By cutting expenses
and enhancing environmental performance, this program generates shared benefit for the
organization Repurposing food waste into a valuable product like fertilizer might potentially save
waste management expenses for the organization, as opposed to disposing of it as regular
garbage and perhaps incurring disposal fees. This illustrates how the program generates shared
value by improving the environment and the bottom line of the business at the same time.
Enhance, JetBlue should continue to do this initiative.

Initiative C, One aspect of the CSV program is JetBlue's investment in start-ups, such Joby
Aviation, which is focused on creating entirely electric passenger aircraft. By tackling several
aspects at once, such as technology innovation, economic growth, and environmental
sustainability, it generates shared value. It is feasible to lower CO2 emissions from gasoline
consumption by utilizing sustainable energy. JetBlue's investment in cutting-edge technologies
helps to foster the growth of a more efficient and sustainable aviation sector. Thus, Jetblue
should continue to invest in this project.

Initiative D, JetBlue and The Nature Conservancy collaborate to assess the importance of
Caribbean coral reefs and encourage their preservation. This program tackles social
responsibility, economic growth, and environmental sustainability because one-third of JetBlue's
flights travel to or from the Caribbean. JetBlue upholds its image as an ecologically conscious
airline, promotes local businesses, and helps preserve important ecosystems via research and
conservation initiatives. However, it is unclear from this endeavor if Jetblue would profit
monetarily from it, because funding coral protection necessitates a significant financial outlay.
Therefore, continued investment in this initiative should be considered.

Initiative E, JetBlue started the "Support our Firefighters" campaign in the wake of the
devastating forest fires in California, with the goal of gathering $100,000 to provide donations to
US firemen. By solving a social issue (helping firemen), our effort fosters community
participation and provides shared value. JetBlue improves its social effect and fortifies its ties
with stakeholders by taking proactive measures in times of crises and promoting societal well-
being. In the opinion of stakeholders, this initiative can help JetBlue increase the company's
image in the community, whereas for shareholders this initiative does not bring any benefits to
the business results of the business.

In Conclusion, Creating Shared Value (CSV) is being implemented at JetBlue, which emphasizes
the approach's limits as well as its revolutionary potential. Though some programs, like recycling
food waste, clearly benefit JetBlue's operational efficiency, others, like protecting coral reefs,
call for large outlays with uncertain financial benefits, making it difficult to defend them to
investors who are more concerned with short-term gains. JetBlue should integrate CSV more
deeply into its core business strategies, improve stakeholder communication to highlight the
long-term benefits, and closely monitor the social and economic effects of these initiatives. As
needed, it should adjust its strategies to better align with business goals and societal needs. These
actions will help maximize the impact and sustainability of CSV.

Part B

1. CEMEX

All assets, capacities, organizational procedures, firm qualities, information, expertise, etc. are
thought to be considered company resources. overseen by a body that permits the body to create
and put into action plans that improve its efficacy and efficiency (Daft, 2015). Business
resources are strengths that a business may employ to develop and carry out its plans, according
to the terminology of classic strategic analysis (Wernerfelt, 1984).
When a company uses a value-creating strategy that is not simultaneously embraced by other
current or potential competitors, it is said to have a competitive edge (Barney, 1991).
An organization is said to have a sustained competitive advantage when it is implementing a
value-creating strategy not simultaneously being implemented by any current or potential
competitors and when these other firms are unable to duplicate the benefits of this strategy
(Barney, 1991). Thus far, it has been proposed that a theoretical model must be developed to
identify the origins of sustained competitive advantage, beginning with the premise that firm
capital may be heterogeneous and immobile. In Barney's (1991) view, a resource of a firm needs
to have four essential qualities in order to give it a significant competitive advantage: it must be
valuable in the sense that it can be used to seize opportunities or counteract threats in the
business environment. Furthermore, it must be unique among competitors of the firm; it must be
hard to perfect imitate, and there must be no viable strategic alternatives that can provide a
comparable level of value, even if they are neither. Below are possible competencies of CEMEX,
by applying the VRIO framework, we can clearly state which of them are sustainable
competitive advantages.

Construrama
Due to the huge amount of bagged cement sales, construction material merchants became a key
CEMEX distribution channel for individuals doing their own building projects or working with
small contractors. The majority of the businesses were little, nameless, and occasionally
untrustworthy, even though CEMEX owned and controlled a few chains and outlets. CEMEX
has developed a network for small merchants called Construrama because of the significance of
this distribution system. The national brand was standardized in terms of store architecture,
logos, and point-of-sale technology by the Construrama network, which also supplied regional
and nationwide advertisements. CEMEX provided help and training for a variety of industrial
tasks, including as hiring new employees, marketing, managing inventories, and creating do-it-
yourself guides for consumers. Members often saw growth, a rise in the variety of customers,
and an expansion in the product line (maybe going from 50 to 500 items). Members may provide
goods from other vendors, but they were obligated to carry CEMEX's cement. Over 90% of
Mexicans were aware of Construrama's brand, which is far greater than that of other businesses
that sell building supplies.

Cement manufacturing

The manufacturing of cement is essential to the construction sector, especially for the creation of
concrete, which is a common building material. A key participant in this business, CEMEX
operates globally with a potential annual capacity of 29.3 million tons, while Mexico's annual
consumption surpasses 36 million tonnes. CEMEX controls a strong 50% market share in
Mexico. While the fundamental components and methods of cement manufacturing are widely
used and easily duplicated, CEMEX stands out for its excellent distribution networks, logistics,
and customer support. In order to operate heavy gear, manage heating processes, and source
supplies, the sector requires rigorous management. To improve the effectiveness of its
operations, CEMEX has made significant expenditures in technology and logistics, including its
own satellite communications network, CEMEXNET.

Cemexnet

To meet these difficulties and achieve operational improvements, CEMEX has made major
investments in technology and logistics over the past 25 years. In order to network the business's
activities, CEMEX invested in its own satellite communications system, known as CEMEXNET,
as the Mexican phone system was unstable and inadequate. It made it possible for the company
to efficiently manage order fulfillment and promote best practices and standards across the
production process. The firm felt that as a consequence of the expenditures, it was far ahead of
its domestic and international competitors in terms of supply chain management and logistics.
Infrastructure
CEMEX's infrastructure indicates that while the infrastructure is valuable in enhancing
operational effectiveness and customer service, it is not particularly rare in the industry and can
potentially be imitated by competitors. CEMEX operates 15 cement plants with a total capacity
of 29.3 million tons per year across Mexico and manages 286 concrete ready mix plants. This
extensive network ensures significant production and distribution efficiency. However, these
types of infrastructure are not unique and are achievable by other firms with sufficient capital
investment. For example, in Mexico alone, there are 32 production facilities with an estimated
total capacity of 60 million tonnes. The integration of advanced technology such as CEMEXNET
and bespoke IT applications adds value, but similar technologies are increasingly accessible to
competitors, reducing the rarity and imitability advantages. While CEMEX is well-organized to
exploit this infrastructure, ensuring continued competitive advantage will require innovation
beyond mere infrastructure, as the elements of its setup are not unique and can be emulated by
others in the sector.
CEMEX has effectively utilized its assets to carve out a competitive position for itself in the
global cement and construction markets, especially by capitalizing on its robust market share in
Mexico. The Construrama network and the CEMEXNET technology both stand as long-term
competitive advantages because of their useful, uncommon, unique, and well-organized qualities,
as demonstrated by the deployment of the VRIO framework. The RBV framework, however,
doesn't provide any guidance on managing and developing competencies. By integrating the
Dynamic Capabilities Framework into its strategy plan, CEMEX overcomes the drawbacks of
the Resource-Based View and positions itself to effectively handle the constantly changing
demands of the international construction sector (Prahalad and Hamel, 1990). CEMEX can
sustain its competitive advantage by improving its capacity to detect and react to market shifts,
grasp new possibilities, and continuously adapt its operations.

2. JETBLUE

Strategic success depends on being different, not merely the best, as Michael Porter's "Strategy
as Choice" idea emphasizes. Porter (1996) argues that a corporation may differentiate itself from
its competitors by purposefully selecting a distinct set of activities that offer a distinctive value.
This method highlights the fact that operational effectiveness alone does not provide a sustained
competitive advantage. Based on the crucial idea of trade-offs, Porter claims that the core of
strategy is the decision to carry out distinct or comparable tasks in a different manner from
competitors. In order to prevent dilution from trying to straddle numerous strategies, these trade-
offs aid in defining a strategy's limits and preserving strategic concentration. In addition, Porter
addresses the idea of fit, elucidating that a robust competitive advantage frequently stems from
how effectively an organization's operations complement and enhance one another, forming a
coherent strategy that is challenging for rivals to imitate.

JetBlue's value propositions focus on exceptional customer experiences, differentiating itself

from other budget airlines with extra legroom, free high-speed Wi-Fi, and complimentary
refreshments, all aimed at maximizing passenger comfort. Additionally, JetBlue offers
affordable premium services through its Mint program on select routes, providing lie-flat seats
and premium amenities at competitive prices to attract business and leisure travelers seeking
luxury without the high cost. The brand also emphasizes reliable and efficient travel, utilizing
technology like mobile boarding passes and real-time flight updates to enhance operational
efficiency and customer satisfaction. JetBlue's commitment to fuel and cost-efficiency through
the use of fuel-efficient aircraft and cost-effective measures ensures sustainability without
compromising service quality.
1st order of fit
 Jetblue’s Tailored Value Chain

JetBlue's strategic activities form a cohesive value chain that directly addresses the three critical
dimensions, ensuring a superior customer experience while maintaining operational efficiency.
Customer experiences are enhanced through the airline's commitment to comfortable seating and
high-quality in-flight services, supported by rigorous cabin crew training and a strong focus on
customer service. Marketing efforts play a crucial role here, highlighting these comfort features
to set JetBlue apart from other low-cost carriers. In terms of convenience, JetBlue simplifies the
travel process with streamlined ticketing and efficient gate operations, significantly easing the
boarding experience. The airline leverages robust IT systems to facilitate seamless online and
mobile interactions, allowing passengers to effortlessly book and manage their flights, further
enhancing convenience. On the affordable premium service front, JetBlue maintains competitive
pricing through careful fuel management and efficient flight operations. Additionally, its
marketing strategies and loyalty programs are designed to communicate this value effectively,
reinforcing JetBlue’s position as a top choice for economical air travel. Collectively, these
interlinked activities ensure JetBlue not only meets but exceeds passenger expectations in each
dimension, securing its competitive advantage in the highly competitive airline industry.
Trade-off:
Before Mint: JetBlue was distinguished by its low-cost, high-quality service model, which
featured comfortable seating and no additional fees for the first checked bag. This strategy was
aimed at providing superior customer service to gain a competitive edge. The company avoided
additional costs that typically come with higher service tiers, which was central to maintaining
its low-cost position. This positioning helped JetBlue cultivate a strong customer base that
valued the combination of affordable fares and comfortable, friendly service.
After Mint: With the introduction of Mint, JetBlue ventured into the premium service segment,
a significant shift from its original egalitarian service model. Mint offered upgraded features like
lie-flat seats, upgraded amenities, and premium dining, aiming at a higher-paying customer
segment that would typically choose traditional legacy carriers. This strategy shift involved
trade-offs: while potentially alienating some of JetBlue’s core customer base who appreciated its
simple, one-class service, it opened up a new revenue stream that could significantly increase
profitability per flight, especially on competitive transcontinental routes.
JetBlue's decision also reflects Porter's emphasis on the importance of making clear strategic
choices that differentiate a company from its competitors. With Mint, JetBlue not only sought to
differentiate itself from other low-cost carriers but also positioned itself to compete directly with
premium services offered by traditional airlines. This strategic choice is aligned with creating
unique value that is hard for competitors to replicate quickly.
2nd Order fit
 Activity-system Map

Michael Porter's idea of the second and third levels of fit is well aligned with JetBlue's strategic
initiatives, which are carefully crafted to support and strengthen the airline's primary value
propositions. This shows a strong integration and strategic coherence throughout the company's
operations. The second level represents JetBlue's dedication to providing an excellent travel
experience at a fair price. Features like spacious leather seats, personal TVs, free Wi-Fi, and the
removal of seats to create more room all work together to dramatically increase customer
comfort and satisfaction. The airline's high aircraft utilization strategy, which combines rapid
gate turnarounds and point-to-point flights with a single model of aircraft (A320s), is also crucial
in preserving high efficiency and low operating costs, a prerequisite for low-cost operations
without sacrificing the caliber of service. Additionally, JetBlue promotes a productive staff by
implementing policies like a profit-sharing plan and a non-unionized workforce, both of which
guarantee excellent customer service and operational effectiveness.
By using cost-effective strategies like eliminating baggage transfers, sophisticated ticketing
systems, and second-city airports, JetBlue improves its operations to decrease redundancy and
save costs at the third level of fit. JetBlue's value proposition is directly enhanced by these
strategies, which augment its affordability and dependability in service. Along with advocating
for fairness and a bill of rights for customers, the airline also fosters equality, which strengthens
its dedication to providing an exceptional customer experience by encouraging openness and
establishing consumer loyalty. By working together, these coordinated efforts not only coexist
but also positively reinforce each other, creating a long-term competitive advantage through cost
savings from effective aircraft utilization, improved customer satisfaction from targeted service
improvements, and the development of a devoted and driven staff that advances the business's
value propositions.

In conclusion, JetBlue demonstrates its dedication to a unique value offer by improving

customer experience and operational efficiency through its strategic alignment with Porter's
theory. Combining Porter's approach with the Blue Ocean Strategy may help overcome these
obstacles and take advantage of emerging possibilities (Kim and Mauborge, 2005). By cutting or
eliminating less valuable services, investing more in cutting-edge technologies, and developing
new market spaces like hybrid travel experiences or improved health and safety features, JetBlue
may be able to surpass conventional competitive boundaries thanks to the Blue Ocean Strategy's
ERIC model. In addition to strengthening JetBlue's market positioning, this strategy would
promote profitability and sustainable development in a changing business environment.
References

Porter, M. E., & Kramer, M. R. (2006). Strategy and society: The link between competitive
advantage and corporate social responsibility. Harvard Business Review. 84 (12): 78-92.

Porter, M.E. (1996) “What is strategy?” Harvard Business Review, 74(6): 61-78

Daft, R. L. (2015). Organization Theory and Design. Cengage Learning.

Wernerfelt, B. (1984). "A Resource-Based View of the Firm." Strategic Management Journal
5(2): 171-180.

Barney, J. (1991) Firm Resources and Sustained Competitive Advantage. Journal of

Management. 17 (1), pp.99–120.

Prahalad, C.K. and Hamel, G. (1990). "The core competence of the Corporation", Harvard
Business Review, 68, 3, pp.79-91

Kim, W.C and Mauborgne, R (2005). "The Ocean Strategy: From theo to practice, California
Management Review, 47, 3, 105-121