Outside of the previously mentioned factors, there are other factors that significantly impact J.B. Hunt’s operation. One of these factors are the customers that the company caters to. As previously mentioned, a majority of J.B. Hunt’s customer base is made up of Fortune 500 companies. Therefore, J.B. Hunt becomes very reliant on these customers and these customers play a big role in the company. As a matter of fact, the top ten most lucrative customers accounted for about 29% of J.B. Hunt’s revenue for the year 2015 (10-k, 7). This is risky for J.B. Hunt because even if just one of these major companies walks out, J.B. Hunt can lose a large amount of their revenue. To make matters even more risky, JBI, ICS and JBT do not offer long-term contracts …show more content…
Hunt’s operations. When regarding technology, J.B. Hunt relies on information technology in all of their segments in order to operate (10-k, 8). If a disruption was to occur at any point during the year, J.B. Hunt’s ability to operate is negatively affected. In order to decrease the likelihood of these drastic occurrences, J.B. Hunt incurs additional costs in order to establish and maintain technology security programs and disaster recovery plans (10-k, 8). Along with these additional costs, J.B. Hunt must also incur additional costs when they are unable to recover an increase in the cost of fuel (10-k, 7). Much like technology, fuel plays a major role in the trucking industry and the volatile nature of the price of fuel is risky for trucking companies. In order to limit this risk, J.B. Hunt does implement a fuel surcharge revenue program with many of their customers, which allows J.B. Hunt to recover most of the higher fuel costs. However, there can be situations in which the timing is off from when the price of fuel changes and when the bill was sent to the customer (10-k, 7). This could sometimes result in a loss of profit for J.B. Hunt and is another factor that can affect their financial results at the end of their fiscal
If it can be determined that the depressed prices for lean hogs are only temporary, inventories could and should be kept at cost basis. In this case, adjusting prices to match current market prices would not be necessary. Future prices indicate a recovery before the end of the fiscal year. Futures prices will surpass cost in February and remain above cost for the remainder of the fiscal year. The future prices support claims that the price fluctuations are only temporary in nature, and do not reflect a permanent downward shift in hog prices. Since inventories once impaired cannot be marked up to reflect changes in market conditions, this strategy could be beneficial to the company later on. In this case inventory would not be shown on the books at an unfairly low value.
After conducting a basic 10 year financial analysis of the company, it has become evident that even with a highly competitive market structure they are able to improve on their performance. Ranging from 2004 to 2013 financial information, the company has shown a significant increase in their sales revenue roughly $3865 million sales in 2004 to almost four time that valuing $12970 million in 2013, which was an “increase of 10.4% over the 53 week prior year” The company’s growth strategy has been to diversify its product market and make them...
The industry has loyal customers with broad customer base that lowers the collective bargaining power of buyers to medium. The switching cost is very low and thus the customers can turn to a service provider who provide faster and innovative service but this is overcome by customized services and integrating into their customer supply chain.
The protection enhances the ability of sustaining a business in a competitive marketplace for the long run. A firm should also undergo the DYB strategy to get rid of business units and other resources that do not add value to the company 's performance. It should adopt the GYB strategy, in which it would utilize the business opportunities lying at its disposal to its advantage. As a direct result of these two strategies, the company would gain a substantial competitive edge against rivals, as well as boost its profitability in the long run (Grimm, Lee & Smith, 2010). Knowing that today 's business environment is characterized by heightened competition that has led to extensive gaps between industry leaders and laggards, and that there are greater churns among the industry rivals, the GYB and DYB strategies are essential for any modern company. More importantly, the GYB strategy should be focused towards the increase of
The company has established good relationships with most of its customers which has assisted it to create high level of brand and customer loyalty
Harvard Business School case 274-116. Cooper Industries, Inc. Retrieved on August 31, 2008, from University of Phoenix, Resource, FIN/545 web site: https://mycampus.phoenix.edu/secure/resource/resource
Jet Blue’s strategy to use a combination of cost leadership and differentiation strategies at the same time in an integrated way helps Jet Blue to overcome any major drawbacks and risks associated with any of the standalone individual strategies. The components and enablers for Jet Blue’s low cost strategy and differentiation strategies are complimentary to each other and they mutually reinforce Jet Blue’s overall integrated combined business level strategy. This combination of low cost and differentiation strategies enables Jet Blue to provide a high quality low cost differentiated customer service experience. This helps Jet Blue create a unique value and also provides a unique competitive advantage for Jet Blue to outperform its competition and achieve long term
Using high level aircraft and employee productivity with minimizing cost by reducing aircraft turnaround time at the gate, Southwest was able to generate an operating revenue of 17.7 billion dollars and an average passenger load of 80.1 percent (Southwest, 2014). A major contributor to the airline’s success is fuel hedging. Fuel hedging is a contractual tool used to mitigate rising fuel costs. Fuel hedging allows Southwest to establish a fixed or capped cost, via a commodity swap or option. When buying a fuel swap, if the price of fuel drops, then the company will be forced to pay the above market rate. When purchasing a fuel call option and the price increases, the company will receive a return that offsets their actual costs. Some fuel call options require an upfront cost. In the previous scenario, if the cost of fuel decreases the company will not receive a return on the option, but will benefit from buying fuel at the lower cost. Southwest Airlines has leveraged this technique and in doing so avoids high fuel costs; drastically important to a company whose annual fuel consumption in 2012 topped approximately 1.9 Billion gallons (Southwest,
...ar. 2). Airlines and bus companies are also equating the extra fuel costs into their ticket prices.
This paper will analyze the mission and vision statements of JPMorgan Chase & Co against the performance of the organization. An evaluation of how well the company lives out its mission and vision statement will be provided. The organization’s strategic goals link to the company’s mission and vision will be assessed. An analysis of the company’s financial performance to determine the link between the company’s strategic goals, strategy, and its financial performance. A competitive and marketing analysis of JPMorgan Chase & Co will be conducted to determine its strengths and opportunities.
The article raises the issue of revenue growth stalls that affect even the most successful companies. The article focuses on four major causes of the crisis. The first cause is the premium-position captivity that is”the inability of a firm to respond effectively to new, low-cost competitive challenge or to a significant shift in customer valuation of product features” (p.54). The second reason is the innovation management breakdown that is”some chronic problem in managing the internal business process for updating existing product and services and creating new one” (p.56). Third reason is the premature core abandonment that means “the failure to fully exploit growth opportunities in the existing core business” and “acquisitions of growth initiatives in areas relatively distant from existing customers, products, and channels”(p.56). Finally, the fourth cause is the talent bench shortfall that is “a lack of leaders and staff with the skills and capabilities required for strategy execution” (p.58). Authors emphasize that these causes are mainly within management control since they result from “a choice about strategy or organizational design” (p.54).
Difficult to regain trust of existing loyal customers who expected high quality and performance when in competition with other firms in upper trade market.
The system adopted by 7-eleven maximizes the threat for new entrants. That’s means that threat of new entrants of 7-Eleven is low. It is because 7-Eleven has already reached economies of scale through maintaining a strong customer base and brand loyalty. Over the years, 7-Eleven has increases their customer and brand loyalty. The access to latest technology and capital investments in the same ensures that the barrier for entries for new entr...
The Ford Motor Company has been in business since the nineteenth century, and it has enjoyed a rather successful run as one of the top automobile-making industries in the United States. Ford Motor Company is a prosperous business because of strategic planning and changes that it was willing to take a risk on developing and implementing. Successful corporations have to adapt to the constantly changing environment or the company will be doomed to failure. In other words, customer shopping habits change as new products are introduced to the market or when other factors beyond Ford Motor Company’s control affect which vehicles are sold. For example, there is an increased demand for fuel efficient cars when the average price per gallon
Loyalty customers gain the more cost advantage and benefit, this resist competitors very hard to match. Promoted cost bind to loyal customers to sustainable growing.