Jetblue Resource Based Model

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Q. Critically evaluate the contribution of the resource-based view of the firm to the discipline of strategic management. Illustrate your answer with examples. Strategic Management refers to the analysis, decisions, and actions undertaken by an organization to create and sustain competitive advantages. The resource-based model introduces a different perspective - from competitive positioning model - to strategic planning by looking at the resources and capabilities of the firm. Prior to the development of the resource-based model, strategic planning consisted only of the competitive positioning model, whose origins came from Porter’s Five Forces model. However, competitive positioning looks only at the industry; it stresses the need for external…show more content…
High Bargaining Power of Seller, as fuel suppliers essentially control the cost spent on each flight, and the only two suppliers of JetBlue (namely Airbus and Boeing) have a wide customer base, which makes JetBlue replaceable. High Threat from Substitutes since there are low switching costs and multiple airline companies available. Low Threat of New Entrants from high costs/capital required for entry, difficulty in differentiating, difficulty in building brand image and loyalty when competing against large airlines. High Rivalry Among Existing Competitors from the numerous existing competitors such as Delta, United, and American…show more content…
It is important to note that Porter’s ‘winning formula’ consists of selecting an industry to excel in, performing an analysis of its industry position, and maintaining this position to generate competitive advantage. The strategy here is to focus on the industry and outcompete rivals. The internal workings and assets of the firm is not of concern. As a response to Porter’s framework, the discipline of business strategy has developed a model concerned with matters internal to the firm. The resource-based model ignores the idea of the industry and focuses on how the unique capabilities and resources of a firm provide the basis for strategy. The strategy chosen should allow the firm to best exploit its core competencies relative to opportunities in the external environment. Resource-based model rests on two critical assumptions regarding resources: Resource heterogeneity; the idea that similar firms possess different bundles of resources to achieve competitive advantage. For instance, Apple and Samsung. Both firms are in the same industry, both are subjected to the same external forces, but the difference in their bundles of resources have led to different organizational
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