Jetblue Strategic Management

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Industry Profile: Market Size: Approximately $95 billion Market growth rate: Domestic 2.9%, International 5.0% (forecasted to 2017) Stage in life cycle: mature for domestic, growth for international Number of companies in industry: 43 mainline carriers and 79 regional airlines Scope of competitive rivalry: primarily major carriers (revenue more than $1 billion). Legacy carriers developing low-cost offshoots Customers: 661 million domestic passengers. Expected growth in business customers Degree of vertical integration: mixed; some have low cost reservation systems, alliances with regional and international airlines as well as hotels. Hedged fuel costs. Sabre Holdings and Galileo International connect airlines with travel agents. No…show more content…
Service – simple to use reservation system, ticketless travel, pre-flight conveniences, pre-assigned seating, leather seats and extra leg room, free DIRECTV service and complimentary snacks and ‘comfort kits’. JetBlue customer Bill of Rights Core competencies Valuable Rare Inimitable Organised to take advantage Collective knowledge base Extendable to multiple markets Competitive Implications Unique Organisational Culture • • • • • • SCA Customer service • • • • • • SCA Marketing Strategy • •  TCA Flight and Hotel packages • •  TCA Reservation system • •  TCA Cost management • •  TCA Low Price •  CP Scale of Economy  CD SCA –Sustained competitive advantage TCA – Temporary competitive advantage CP – Competitive parity CD – Competitive disadvantage Strategic considerations: 1. Declining Profits ==> Though having began as a very profitable organisation, JetBlue has produced a financial loss for the last two years of the case study. ==> Growth of current liabilities. ==> Lacklustre profitability for shareholders 2. Response of legacy airlines ==> The introduction of competitive, low-cost carriers by the large legacy airlines 3. Reconstruction of its organisational culture ==> As the company grows its flat organisational structure will have to develop to handle the chain of command as well as continue a 4. Two kinds of airplane ==> While Southwest (who continue to make a profit) insist on
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