External Environment And Strategic Analysis : Combating Their Competitive Forces

2078 Words9 Pages
External Environment & Strategic Analysis: Combating their competitive forces

Background & Aspirations:
At the start of the twenty first century, JetBlue commenced service “to bring humanity back to air travel and to make flying more enjoyable”. JetBlue offered 75 destinations in the United States for any potential consumers requiring low-cost options for air travel. The replacement cost for consumers regarding the selection of airline travel is low. Providing the greatest value, through either incentives or travel experience, is crucial to how all airline companies conduct business.

Competitors:
There are twenty airline companies competing with JetBlue in similar regions. The composition of the airline industry goes through
…show more content…
This increases competition for any airline company who seek to provide greatest flexibility for their consumers.
In contrast to offering more with flexibility in air travel, JetBlue’s other competitor is United Airlines and Continental Airlines. United Airlines purchased Continental Airlines but continue their business with their respective names. Industry analysts speculate it as a strategic action to gain more control of pricing by manipulating supply by cutting capacity and limiting consumer options. The acquisition also reduces competition over strategic routes. The expected result is higher fares for consumers. In contrast to the Continental Airline acquisition, the Southwest Airlines and AirTran Airways acquisition affects JetBlue’s business by offering greater capacity and securing cost advantages. AirTrans strong profit margins synergized the acquisition and immediately increased Southwest Airlines exposure to airports by 20%.

Economic forces:
The economic forces that affect JetBlue’s business include the market for fuel, interest rates, exchange rates, inflation rates, unemployment rates, and discretionary income. JetBlue’s top line revenue is highly sensitive to economic factors such as interest rates, exchange rates, unemployment, and discretionary income. Consumers in the airline industry manage their use of airline services based on leisure and business. During times of economic
Get Access