Jetblue Strategic Management


Length: 759 words (2.2 double-spaced pages)
Rating: Excellent
Open Document
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Text Preview

More ↓

Continue reading...

Open Document

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 mention of airlines employing in-house catering.
Learning curve effects: not a factor in this industry
Ease of exit/entry: aircraft, terminals, infrastructure and staffing are expensive
Technology/Innovation: R & D essential in creating efficiencies and reducing expenses with turn-around times, fuel costs, reservations etc
Product Characteristics: diverse; customers can receive top end service through to low cost travel and ongoing international hook-ups.
Scale Economies: the industry contains several very large players and multiple medium to small players
Capacity utilisation: high rates required to achieve suitable profitability
Industry profitability: subpar to above average; fuel and maintenance costs, a growing senior staff division, unionisation of employees and competitive price wars are margins concerns.


Porter’s 5 forces
Threat of New Entrants - Moderate – Deregulated industry. Threat of new entrants higher during downturns in industry (e.g. JetBlue’s entry point). Existing airlines may encroach on an opponent’s major or regional market-share. High cost of entry into industry
Bargaining Power of Buyers – High – No or very low cost in switching airlines
Bargaining Power of Suppliers – High – two key supplies needed are planes and fuel. Fuel prices are negotiable on quantity. There are only two airplane suppliers, Airbus and Boeing.
Threat of Substitutes - Low – Buses, boats, trains and cars are substitutes but usually not cost or time effective substitutes for most consumers
Degree of Rivalry - Very High to Intense – Multiple competitors, high strategic stakes, innovation often easily imitated, and low switching costs for consumers


Value Chain
Support Activities
Infrastructure – Flat organisational hierarchy – Terminal at JFK airport
HRM – Staff have access to executives and CEO – a culture/ philosophy of treating employees well and a reputation as a great place to work. Company profit sharing, high productivity of people and rapid advancements
Technology – Paperless cockpits, VoIP customer service, innovative culture
Procurement – 9 new Embraer E190 planes. Fuel. Personnel.

Primary Activities
Inbound logistics – Low cost, simple to use cost effective reservations system, ticketless travel, pre-assigned seating, paperless cockpits, search engine optimisation and BlueTurn; for minimising ground time.

How to Cite this Page

MLA Citation:
"Jetblue Strategic Management." 123HelpMe.com. 26 Apr 2017
    <http://www.123HelpMe.com/view.asp?id=165731>.
Title Length Color Rating  
Essay on Jet Blue Strategic Management - Executive summary JetBlue was founded by David Neeleman in 1998 and is America’s youngest airline flying to over 35 destinations including Caribbean and Atlantic regions. The key strategies and competitive advantages of JetBlue are the maximisation of its workforce productivity, high quality of service and innovation with affordable prices, low cost ticketing system, and efficient aircraft utilisation. JetBlue is a low-cost airline with a differentiated approach in regards to the high level of customer service it offers....   [tags: Business Management Analysis] 1980 words
(5.7 pages)
Powerful Essays [preview]
Strategic Manufacturing Management Questions and Answers Essay - Question 1: Hayes and Wheelright (1984) and Mintzberg (1987) spoke of strategy as a pattern of decisions. What do they mean by this. (5 Marks) Strategy is the pattern of decisions determining the organization’s objectives, purposes, or goals. It outlines the principal policies and plans for achieving those goals, and clearly defines the range of businesses the organization has to pursue. Strategy as a pattern of decisions also highlights the nature of human and economic organization it intends to be, and the nature of the economic and noneconomic contribution it intends to make towards its stakeholders, mainly, the shareholders, customers, employees, and communities[1]....   [tags: Strategic Manufacturing Management Essays]
:: 7 Works Cited
3524 words
(10.1 pages)
Strong Essays [preview]
Strategic Program Management Worksheet Essay - Strategic Program Management Worksheet IMPLEMENTING ORGANIZATIONAL INITIATIVES The purpose of this assignment is to begin the process of Problem Based Learning. In this step, you will be looking at one or more realistic situations and using them, in the context of this course, to identify the key concepts involved that you will need to understand in order to solve whatever problems you might encounter in those situations. Complete the table below by identifying at least five concepts that you will study from the text on the rEsource page in order to resolve the situations presented; list and briefly describe them in column A....   [tags: Strategic Management] 1677 words
(4.8 pages)
Powerful Essays [preview]
Essay Strategic Management of Wal-Mart - Introduction Wal-Mart Stores Inc. is in the discount, variety stores industry. It was founded in 1945, Bentonville in Arkansas which is also the headquarters of Wal-Mart. Wal-Mart operates locally as well as worldwide. It operated 1209 discount stores, 1980 super centers, and 567 Sam’s Club by January 31, 2006. It has also extended its operations to many international countries. It runs its retail stores in two forms: Sam’s Club and Wal-Mart Stores. The Sam’s Club sells assorted product lines such as hardwares, electronics, jewelry, and to mention a few....   [tags: Strategic Management] 1002 words
(2.9 pages)
Strong Essays [preview]
Benefits Of Strategic Management Essay example - Competitive Advantage in Strategic Management A business without strategy is a business without direction. A strategy without a competitive advantage is a business without a precondition of success. Managing strategically is to make decisions and implement strategies that allow an organization to develop and maintain competitive advantage. Competitive advantage is a concept that motivates strategists to replicate the strategies that make most successful companies successful. According to this, we can learn that competitive advantage is a very important concept in strategic management....   [tags: Strategic Management] 1206 words
(3.4 pages)
Strong Essays [preview]
Strategic Plan Management Essay - Strategic Plan Development Riordan Manufacturing is a global fortune 1000 company and the world largest plastics manufacturer. The company’s main mission is to be the leader in innovation by focusing on research and development. In the past the company has been the first to identify industry trends and will continue to do so in the future by spending above and beyond the competition on research and development (Riordan Manufacturing, n.d.). The company is also focused on building and preserving its relationships with customers at the same time being a responsible partner with local communities to improve the quality of life for all....   [tags: Strategic Management] 1785 words
(5.1 pages)
Powerful Essays [preview]
Strategic Management at the Vermont Teddy Bear Company Essay - We will begin with a little history of Vermont Teddy Bear Company. John Sortino founded Vermont Teddy Bear Company in 1981 out of a pushcart in the streets of Burlington, Vermont. Mr. Sortino was an entrepreneur and realized that the company had become too large for him to manage. In order for the company to be successful in the future he decided to step down as CEO. In 1995 R. Patrick Burns was appointed as the new CEO of Vermont Teddy Bear Company. Even thought the CEO changed the company’s name the focus remained the same, "to design and manufacture the best teddy bears made in America, using American materials and labor" (Wheelen and Hunger, 2006, p 22-6)....   [tags: Strategic Management] 1223 words
(3.5 pages)
Strong Essays [preview]
The Contribution of Strategic Management and Strategic Thinking Processes to Organisational Performance - The Contribution of Strategic Management and Strategic Thinking Processes to Organisational Performance Strategic management and strategic thinking processes make a significant contribution to organisational performance. A strategy, according to Robbins and Barnwell (2002, p. 139) is “the adoption of courses of action and the allocation of resources necessary to achieve the organisation’s goals”. It is important for organisations to achieve their goals, as this can assist them to reach a competitive advantage, which is a highly attractive position for a firm to be in....   [tags: Strategic Management Business] 1697 words
(4.8 pages)
Strong Essays [preview]
Strategic Management In A Flat World Essay - Would you believe me if I told you the world was becoming flat. Well, it is, just not necessarily in the literal sense that you may be assuming. The recent advances in technology and communications have led to the rapid spread of globalization. This new level of connectivity is serving as the equalizer between “industrial and emerging market countries.” To put it bluntly, the gap between what we once thought were more highly developed nations and those less efficient, is shrinking at an incredible rate....   [tags: Business Strategic Management Globalization] 1627 words
(4.6 pages)
Strong Essays [preview]
Essay on JetBlue - Imagine how you would create an airline if you were building it from scratch. That is what Dave Neeleman set off to create with the inception of JetBlue in 1999. JetBlue is a bright, young startup airline. Why has JetBlue succeeded where most have failed. Is Dave's strategy as simple as bringing "humanity back to air travel". The billion dollar question is: can JetBlue really stand out in an industry known for its negligible if not absent profitability (over the life of the industry), an industry fret with failure and infamously known for its horrendous labor-management relations....   [tags: Business Case Studies] 1701 words
(4.9 pages)
Powerful Essays [preview]



Fuel and maintenance items.
Operations – Movement of goods and passengers, Aircraft maintenance, crew training, piloting, customer service, administration
Outbound Logistics – Completion rate. In terms of customers, the service is consumed as it is produced. Baggage handling - Hotel packages
Marketing and sales – Low cost animated TV ads plus American Express loyalty card and word of mouth. Innovative marketing campaigns utilising customer feedback, comical postcards, leather benches and snack bins in airports, JetBlue exhibits and direct marketing campaigns with students.
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 having only one type of plane, JetBlue have two types which erode profits due to maintenance, training and staffing issues
5. International growth
==> Creating an alliance with international airlines in a low cost fashion
6. Fuel costs
==> Hedging and reducing current fuel costs as well as research into alternative fuels
7. Emergence of business travellers
==> Capturing a sizable market-share of business travellers
8. Staffing costs
==> As employees are becoming more senior the payroll expenses are increasing


Return to 123HelpMe.com