Crafting and Executing Strategy

2432 WordsNov 13, 201010 Pages
Crafting and Executing Strategy Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy The airline industry is facing one of its most difficult times in history. A worldwide recession along with the terrorist attacks of September 11, 2001 have led to a decrease in passenger traffic, reduction in revenue and rising fuel prices. Additionally, airline companies face the increase competition from new entrants. The shortage of pilots has also caused problems for the airline companies. In 2008 when the economy started to take a down turn, businesses began to cut back on employee travel, consumers were being more conscious about their spending. Airlines had to come up with a strategy by…show more content…
This would keep its risk low. If JetBlue used an option contract to hedge rising fuel prices when prices decreased the option would expire worthless and JetBlue would only lose the premium paid. If JetBlue used a swap agreement instead of an option contract to hedge rising fuel prices and prices decreased, JetBlue would have to pay the counterparty the full extent of the loss. JetBlue has been successful and has maintained a conservative financial strategy. Even though it continues to operate in an environment of high fuel prices and a weakening economy, JetBlue continues to manage its business very cautiously. JetBlue is in a position of strength with a solid cash position. It is committed to maintain sufficient liquidity to withstand an extended economic downturn. Discuss JetBlue’s strategic elements of cost, organizational culture, and human resource practices and evaluate whether each element provides the organization with a competitive advantage JetBlue offered new and differentiated attributes for customers such as personal television for every seat with direct TV and satellite radio. Every flight came with snacks. JetBlue makes it easy to book a flight online and once the customer got to the airport, he or she would be able to print the boarding pass without having to stand in long lines. This saved the customer time and saved JetBlue money by cutting staffing cost.
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