JetBlue Airways Corporation has been a rapidly growing discount airline and biggest success story in the industry by using its strong customer service considerations and low fares to build a solid, growing customer base. David Neeleman, CEO and director began JetBlue in 1999 and flying since 2000 after his previous airline company-Morris Air was brought by Herb Kelleher, the Southwest Airline founder. He signed a 5-year non-compete agreement not to launch another airline. Kelleher hired Neeleman at Southwest but was not happy with the structured environment he did not control and was fired (Essentials of Entrepreneurship p78). JetBlue's strategy is developed around its core competencies. The company has benefited by being able to start with a clean slate. It has a last-mover advantage and its information technology infrastructure and use has given JetBlue a sustainable competitive advantage. Starting with a clean slate gave Neeleman and President, COO David Barger the advantage of handpicking a management and supportive staff that reflected their vision. JetBlue's management has numerous years of airline industry experience. The team members have catered to customers, they've been customers, and they have extensive backgrounds on what it takes to be successful in the industry. In the early planning process, 20 members of JetBlue's management staff met for two days and settled on five core values: safety, caring, integrity, fun and passion. These five values result in a superior customer and crewmember experience (Motley Fool). JetBlue is different from other discount airlines. While Southwest and JetBlue use the same type of jet (Boeing 737 for Southwest and Airbus A320 for JetBlue), Jet Blue planes accommodate 162 passengers versus Southwest holds 135 passengers. The use of this plane allows the maintenance costs to stay low. This low maintenance cost is lower than any other carrier in the industry. JetBlue also focuses on longer flights (Essentials). Neeleman decided to upholster every seat in leather, which costs $15,000 more per plane. The leather surfaces are easier to maintain and last much longer (Essentials). Another advantage is its workforce is nonunion. Neeleman is not against unionization but he would prefer to avoid them. He feels if management and employees trust one another and if people feel they are compensated fairly, he believes that there's no need for a third party.
Westjet has a unique corporate spirit: To enrich the lives of everyone in WestJet's world by providing safe, friendly and affordable air travel (2). In order to fulfill this company mission, westjet pursue to become one of the five most successful international airlines in the world by 2016, providing the guests with a friendly and caring experience that will change air travel forever.
It has stayed relevant to the market through its propelled philosophy of relationships to generate profits in the business. Since its establishment in Monroe, Louisiana the once tiny airline has stretched to greater heights serving in 6 continents. It has also established a distinguishable name among its competitors with a reputation of leading customer services. However, even as an established venture, the company needs to maximize its profits in order to stay in business and expand in to new territories beyond its conquered boundaries. A strategic analysis was carried out by our team to establish the company’s current situation. A SWOT analysis was performed to come up with three referenced, strategic alternatives. This alternatives are meant to act as a strategic guidance to the company in order to enhance growth. The strategic recommendation provided will improve and enable the business to cope with the competitors while the implementation of the strategy section will outline the way to go about achieving these alternatives in the business setting. Lastly, we put up a discussion on the evaluation procedures and necessary controls for the
As part of marketing in business, strategy is a leading light because it is a plan of action designed and followed by businesses to become successful. Three companies in the same industry can offer similar products in a completely different ways. Branding is everything and understanding what customers want determines a company’s brand position. Airline companies are great examples of numerous companies offering the same product. Major differences in brand and quality management come when comparing three airline companies that offer the same product such as Spirit Airlines, Jet Blue and American Airlines. Although their product is the same, the processes to marketing their product are completely different.
Southwest Airlines strategy of focusing on short haul passenger and providing rates as low as one third of their competitors, they have seen tremendous growth in the last decade. Market share for top city pairs on Southwest's schedule has reached 80% to 85%. Maintaining the largest fleet of 737's in the world and utilizing point-to-point versus the hub-and-spoke method of connection philosophy allowed Southwest to provide their service to more people at a lower cost. By putting the employee first, Southwest has found the key to success in the airline business. A happy worker is a more productive one as well as a better service provider. Southwest will continue to reserve their growth in the future by entering select markets only after careful market research.
Having a low amount of cost in their operations is one of the contributing factors in Southwest Airlines’ financial success. Such low cost model of the corporation is brought about by an effective strategy. Southwest uses only one type of aircraft – the fuel-efficient Boeing 737. This tactic keeps training and maintenance costs down. Moreover, the no-frills approach to customer service contributed to the low cost of operations for Southwest. The airline does not serve meals on board, and there are no luxurious or first class seats offered. Services like these have been seen by the airline as unnecessary for an airline that provides a short-haul trip from city to city. By these, Southwest were able to offer low price tickets to customers, which was good for the company because most people would prefer to fly without those services mentioned if it meant for cheaper ticket price.
...ry long and successful history in the airlines industry, which makes it one of the leading airlines in the world. Also, it provides the most comfortable flights and services to its costumers and employees, which makes it unique.
Use of technology and automated processes to reduce reservation, ticketing and customer services costs. Paperless cockpits, use of e-manuals, electronic ticketing, owning its own in-flight entertainment provider, automated baggage handling are some of the examples where Jet Blue’s use of technology has lowered operating costs.
Although JetBlue focuses on service value through highly productive personnel and aircraft, potential consumers are still interested in value when they fly; the Price aspect of the marketing mix. Customers are interested in quality service at a reasonable price.
British Airways has focused its mission and objectives towards satisfying its key stakeholders that include employees, customers, Government and the British public. The company has been successful in dealing with cultural differences that arise between the UK and foreign countries, adopting a geocentric approach to hiring workers. The airline has also created a flexible organisation that responds quickly to the changing needs of its consumers.
The mission of Southwest Airlines is a dedication to the highest quality of service delivered with warmth, friendliness, individual pride, and company spirit (Mission…, 2007). The company also provides opportunities for learning and personal growth to each employee. Creativity and innovation is very important and highly encouraged, for the purposes of improving effectiveness. Employees are to be provided the same concern, respect, and caring attitude within the organization that the employees are expected to share with the customer. Southwest Airlines was initially created to be a low-cost alternative to high price of intra-Texas air carriers (Freiberg, 1996). Southwest’s fares were originally supposed to compete with car and bus transportation. It was a little airline, and it would withstand the test of time. As a discount, no-frills airline, it would provide stiff competition for larger airlines. Their strategy was to operate at low cost, offering no food, no movies, no first class, and no reserved seats. They created their own market and provided increased turnaround times at the gate, by avoiding hub-and-spoke airports and opting for short-haul, direct flights. Through this market approach, Southwest has a majority of market share in the markets they serve.
There are few things that are impressive about Southwest Airlines first one is how they treat the employees. For Southwest Airlines employees are first and customers are second. If the employees are treated well that will bring in happy customers. Next is that Southwest is not only with their low prices but is able to create a competitive advantage by offering a fun and humorous experience when flying. Finally another impressive fact is when Herb Kelleher’s retire from CEO position yet remained a Southwest employee till July 2014. Even after the retirement he was still active with the Southwest Airlines that reflected his enthusiasm and dedication for the
The first initiative that they were able to gain in competitive advantage was the reduction of costs. They have been able to use an online system where consumers can reserve tickets avoiding which avoids using travel agents. Having this systems reduces costs for the company as well because they do not have to hire nearly as many as employees. Along with buying tickets, JetBlue has been able to use other systems to reduce costs which helps them with the maintenance of their planes and organizing information that involves every aspect of their business ranging from their planes to their employees and consumers. The second initiative that JetBlue uses is the creating of new services. By creating their new online services and systems they are able to gain competitive advantage because it allows easier and less expensive accessibility to their services. Not only have they created new services but they are able to differentiate these services from their competitors because of the easiness and quality of the services that they do provide. They not only focus on making their services the best but also the highest level of customer service that they can offer which other airlines struggle to do. Other competitors have realized that JetBlue is beating them in many aspects in the business that they have needed to adjust what they are doing to catch up. Even with the jumps in technology use with the other companies, JetBlue has still been able to enhance their services to continue to gain competitive
To apply and the all ‘ rules of game‘of an business we taking an aviation company known as “Jet Airways” before we get into, here are some intro points about this company.
This concept was challenged by Southwest Airlines by marketing itself as a cost leader. Their entire growth curve in the industry has been attributed to its cost effective strategies which has made it more efficient and successful than traditional airlines.
The target market of JetBlue airlines is customers who along with low cost seek services. The services provided by JetBlue included in-flight entertainment, TV on every seat, satellite radio, extra leg room, free unlimited snacks, and leather seats. The target market of JetBlue is also the leisure traveler, the low cost ticket seeking traveler, and the cost conscious business traveler. JetBlue has actually, posed a threat to the other low cost airlines like the Southwest Airlines.