JETBLUE AIRWAYS: CHALLENGES AHEAD
Case Study: Global Strategic Management
Table of Contents
1. SUMMARY 2
2. ANALYSIS 2
1) INDUSTRY ENVIRONMENT ANALYSIS 2
I. PESTELE 2
II. PORTER'S 5 FORCES MODEL 3
2) ANALYZE THE INTERNAL ENVIRONMENT OF JETBLUE 4
I. VALUE CHAIN ANALSIS 5
II. VRIO ANALYSIS 6
3) FINANCIAL ANALYSIS 6
3. RECOMMENDATIONS 8
1) MARKET DEVELOPMENT: FLYING INTERNATIONALLY 9
2) MARKET PENETRATION: INCREASE ADVERTISING AND EXPAND TO OTHER MEDIA 10
3) RELATED DIVERSIFICATION: BUILD PARTNERSHIP TRAVEL WEBSITE 10
4) PRIORITY WISE IMPLEMENTATION OF STRATEGIES: 10
5) IMPLICATIONS 11
1) REPUTATION OF COST LEADERSHIP INTERNATIONALLY 11
2) CONSOLIDATION IN AIR TRAVEL INDUSTRY 11
3) INCREASE IN CONNECTIVITY AND AIR TRAVEL 11
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VALUE CHAIN ANALSIS
Primary:
Inbound logistics • Online booking gave greater control on management of seat sales as compared to ticketing through agents
Operations • Paperless cockpit
• Paperless ticketing
• Single aircraft type reduces training costs and usage of manpower
Outbound logistics
• The new A320s are more spacious and fuel efficient
• On time departures
Marketing and Sales • Online ticketing as an efficient distribution channel
• Fair pricing/ effective pricing
• Market segmentation
Service • Constant touch with customers
• Refund customer for inconvenience
• First hand customer feedback
• Invest in trainings
Secondary:
Procurement • Well-made procurement plan with support
Technology development. • Investment in technology
• Process innovation like online-ticketing, paperless cockpit, automation in baggage handling
Human resource management • Reward systems like ESOPs, profit-sharing
• Innovative recruitment polices
• Culture promotion
• Non-unionised workforce
General Administration • Top management,
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Extending flights to major hubs in Europe to use that as start off for flights heading to Asia and China etc. to mitigate risk of losing customers as a result of unplanned delays.
Question: Finally, while unions are prevalent at every other airline, how can JetBlue maintain an environment where employees remain committed, dedicated and satisfied?
As indicated that employees working with JetBlue is not unionized and majority consists of them working on lower level which forms a strength for JetBlue being the fact they are highly trained and offer better customer service. Also after the attack of 9/11 security concerns on airport have increased to create trust among the passengers.
JetBlue should think of increasing their fares marginally so that they are still the lowest –priced competitor in market but can make more money in order to pay more for better security at airports and better pay/benefits for employees so that stay as the same and don’t go on strikes. Rise in fare prices will also help counter the pressure on operating expense caused by increase in the rise fuel price in the recent years.
2) MARKET PENETRATION: INCREASE ADVERTISING AND EXPAND TO OTHER
According to MBASkool (2015), a SWOT analysis has been completed to show some of the opportunities and threats that American Airlines faces. They are listed as follows:
JetBlue Airways, the latest entrant in the airlines industry has gone through the initial stages (entrepreneurial and collectivity) of the organizational life cycle rapidly under the successful leadership of David Neelman. JetBlue Airways is currently in the formalization stage of the life cycle where in it needs to create procedures and control systems to effectively manage its growth. Also as it proceeds to grow further to reach the elaboration stage, JetBlue needs to continue to align itself with the environment in order to maintain its sustained growth.
Governmental regulations and legalities are another key threat for JetBlue. Airline regulations can increase expenses and potentially create inefficiency in operations in order to meet regulation requirements. Additionally, restrictions related to international trade, tax policy, and competition can thwart expansion efforts.
JetBlue Airways has been affected by key external factors. The political factor that has affected JetBlue is the resentment towards union formation. Currently, JetBlue is a non-union company. This helps it keep its fixed costs low. Further, there are positive
JetBlue has always identified itself as a customer service company first, focused on providing customers a unique experience on every flight and with every interaction with JetBlue. (Annual report, 2005)
This entails persuading the customers to purchase the tickets and experience the SAA experience. The marketing and sales will increase the purchases of The following activities can be
JetBlue has been one of the most successful airlines since it first entered the industry in December of 1999. Founder, David Neeleman, set out to succeed by offering low-cost air travel in hopes of perpetuating his services to as many people as he could across the US. He was very adamant about having a very customer oriented business that catered to the needs of all. In doing so he wanted to emphatically promote his obligation to safety, caring, integrity, passion, while allowing the customers to have fun while traveling. There motto helps portray Neeleman’s belief stating “You Above All”. His primary goals had been to follow Southwest’s objectives of offering low rates to customers, focusing on customer’s needs and comforts while distinguishing itself with their amenities. Neeleman’s other goal was to establish his low-cost leadership strategy by concentrating his airline in a large popular metropolitan area that already is already correlated with high airfare (Peterson, 2004). He then began operating based out of the New York metropolitan area at John F. Kennedy International airport with his secondary locations in Washington D.C., Boston and Los Angeles.
The financing decision which is aimed at securing the purchase of the new 100-seat Embraer E190 aircraft would allow JetBlue to enter smaller markets while maintaining low operating costs, and increase flight frequency on existing routes. The low fares offered by JetBlue would allow it to attract new passengers who might otherwise not fly. Earnings from this market segment is expected to contribute to the profitability and positive financial performance of the company
Boeing’s management plan shows determination to improve through creation of new more members of their airplane family (commercial airplanes). This would also be achieved through integration of military platforms, systems for defense and the war fighter by use of network-centric activities. Boeing plan is also inclusive of creation of improved technology to solve problems across all business units. Boeing plans to e-enable airplanes where automation is the key to this development. Finally, Boeing is determined to arrange for financing solutions to its customers. Through this it will be able to attract more potential customers. Moreover, it can also be able to establish a better relationship with its customers through provision of incentives and sales promotion.
1. JetBlue's strategy for success in the marketplace is based on the cost leadership strategy, as outlined by Michael Porter (QuickMBA, 2010). This strategy relies on delivering products or services at a lower price than competitors, and using that cost leadership as the basis by which to attract customers. JetBlue essentially built their business model after Southwest Airlines, and the company's founders had experience with Southwest that helped them learn about the business. The JetBlue approach to cost leadership is focused on the mass market.
Launched just 8 years ago, today, the Jetstar Group consists of a network of value-based air carriers that deliver high quality air passenger services for budget-minded travelers across Australia, New Zealand and the Asia Pacific region. Beginning with just 400 employees, the company currently employs more than 7,000 people and carries about 20 million passengers a year. To gain some insights into how the Jetstar Group achieved this impressive growth in such a short amount of time, this paper provides a review of the relevant literature concerning the air passenger industry in general and the business strategy used by the Jetstar Group in particular. A summary of the research and recommendations for this company are provided in the paper's conclusion.
•Neeleman offered passengers a unique flying experience by providing new aircrafts, simple and low fares, leather seats, free Live TV at every seat, pre-assigned seating, reliable performance, and high-quality customer service. JetBlue focused on point-to-point service to large metropolitan areas with high average fares or highly traveled markets that were underserved. JetBlue’s operating strategy had produced the lowest cost per available seat mile of any of the major U.S. airlines in 2001—6.98 cents vs. 10.08 cents.
Air travel has drastically changed the way of life for many individuals that depend on air travel to take care of business. One of the top leaders in the air travel industry, The Boeing Company realizes in order to stay competitive in their chosen industry, an effective strategic plan should be implemented. There are several approaches that can be utilized, such as focusing on the external and internal objectives that could beneficial. Boeing strives to be the best aerospace-based manufacture in the world.
Table of ContentExecutive Summary1I. Introduction2II. Main Body1. History of British Airways22. Current strategic situation….42.1 Internal analysis42.2 External Analysis52.3 SWOT82.4. Current strategy93. Potential Strategic options124. Recommended strategic direction with rationale164.2 Strategy Evaluation175. Identification of critical success factors186. Performance measurement criteria197. Conclusion218. Bilbliography249. References24Executive SummaryThe main aim of this report is to undertake a review and analysis of British Airways. It is UK's leading airlines both at international and domestic level, with its operations spread over 300 destinations across the world. The report starts with a brief description of the company. Then the
JetBlue is related to three types of the management concepts in my personal understand, they are: product and marketing. First of all, in product concepts the company focuses on offer the best to fulfill their customer’s expectation “holds that consumers will favor products that offer the most in quality,