Environment as Viewed by Michael Porter’s Model of Competitive Forces

A. Describe the environment, as viewed by Michael Porter’s model of competitive forces, that Valuejet was trying to compete in. consider competition, suppliers, customers, new entrants, substitute products? The five competitive forces that shape strategy are competition, suppliers, customers, new entrants, substitute products. Michael E. Porter demonstrates how the five competitive forces can be used in any industry. The results from all five forces not only look at the narrow aspect of competition rivals but as well as broader aspect of competitive interaction within an industry.

These five competitive forces can also be used in the case of Valuejet. Competition within the airline industry is highly competitive, even though the airline industry is among least profitable industry. The fights between competitors in the airline industry are exclusively on price try to give the customer lowest prices possible. Valuejet push the envelope too far while trying to cut their operating cost in order provide their customer with the best price.

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Since consumers are very price sensitive and are using online travel agencies such as Orbitz and Priceline to compare prices between companies. Making the airline industry ever more competitive and even harder for new entrants. Valuejet use suppliers or services such as SavreTech as subcontractors, in which could help Valuejet lower its cost and help lower the price for the customers. ValueJet also beat their substation by providing customers a faster and more convenient of traveling compare to taking a bus or train to their destination. . Is the use of subcontractors ethical? The text book define ethic as “a code of moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong”. I don’t think the use of subcontractor are ethical because people believe the company, which they are buying from are doing its own work and effort in producing its product or services. For example, would it be ethical for a student (a company) using an outside source (subcontractor) to do his/her school paper?

However, lately subcontractor has been put in the spot light because of their lack of responsibility. b. What was ValueJet’s competitive advantage? Valuejet competitive advantage was its cost-cutting that range from the pilots salary to the mechanics. By Valuejets decreasing its operating cost, which therefore decrease its ticket prices, and helping their airplanes tickets to be sold-out. Making Valujets a popular choice for consumers for air travel and as well as to investors making ValuJet stock one of the most desired stock on the market. B.

What position in the ValuJet organization did Sabretech fill, why was this a problem? If this were your company would you have used them? ValuJet hire Sabretech, owned by Sabreliner, and licensed by the FAA to perform critical work. If I was a manager for this company I wouldn’t of hire Sabretech. By looking at Sabretech I can see that they were lacking an ethical structure. A Structure that should represent various systems, position, and programs of a company to encourage and support ethical behavior. Such as whistle-blowing an employee disclosure of illegal, unethical practices.

By encouraging whistle-blowing employees would not delay in telling regulatory agencies. Perhaps in helping avoid any future tragedy like this one. C. Can you generalize the about the Ethical/Value problem created by communication processes between the FAA, NTSB, Sabretech, and Valuejet, especially for those who value truthfulness and open communications in performing their work? Before the accident, the Federal Aviation Administration’s (FAA) oversight of ValuJet did not include any significant oversight of its heavy maintenance functions.

The FAA’s inadequate oversight of ValuJet’s maintenance functions, including its failure to address ValuJet’s limited oversight capabilities, contributed to this accident. Also the failure of the FFA in not disclosing any information that pertain to the incapable of ValuJet keeping up with its aircraft require maintenance. D. a. An example of decision making it’s the decision made by the managers of Valuejet to hire an outside company to do its work on their aircrafts.

Therefore putting their whole reasonability on Sabretech in handling and controlling company procedures. b. Planning- moving the public through thin air cheaply and at high speed by helping the entire industry to understand just how far cost-cutting could be pushed. Organizing- ValuJet had hired an outside company to do the job. Leading-The operation had grown used to taking shortcuts. Controlling- The supervisors and inspectors failed miserably here, not supplying the required safety caps and verified that those caps were being used. . SabreTech’s Miami facility hire many Spanish-speaking immigrants onto their work force, but quite obviously the language barrier created many problems. Thus English-speaking engineers, who wrote the orders and technical manuals as if they were writing to themselves. The real problem, in other words, was engineer language and the lack of communication, d. The stakeholders that was connected to Valuejet were the flight attendants, ramp agents, and mechanics of the company.

These employees have to depend on their company to succeed in order for them to keep having jobs. E. What effect did government (FAA and NSTB) play on the credibility of ValueJet? FAA regulators had begun to worry that the company was moving too fast, and not keeping up with its paperwork, but there was no evidence that the people involved were inadequate. However, FAA’s administrator David Hinson said “I would fly on it” calling valujet safe on the day after the ValuJet accident linking the FAA’s reputation to that of ValuJet.

The NTSB is a technical agency, its job is to examine important accidents and to issue nonbinding safety recommendations to industry and government. The NTSB did an even better job than usual, not only pinpointing the source and history of the fire but also recognizing some of its larger implications. That Valuejet did a poor job on supervising SabreTech and allowing them to take shortcuts. F. Although Valuejet went out of business, they are still in business. How? Valuejet merged with AirTran Airways.

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Environment as Viewed by Michael Porter’s Model of Competitive Forces. (2016, Oct 04). Retrieved from https://graduateway.com/intro-marketing/