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Jetblue Airways

Essay by   •  January 2, 2012  •  Case Study  •  944 Words (4 Pages)  •  2,054 Views

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JetBlue Airways

1. What was David Neeleman's original strategic vision for JetBlue? Should JetBlue's strategic vision be revised now that the company has new executive leadership?

Agreed with whatever has been posted for the first part-low fares and customer comfort.

My views for part 2:

There are relevant factors and influences outside the company's boundaries that can have a high impact on a company's business situation and have a very significant impact on the company's direction and strategy. JetBlue Airways also experienced such factors which forced the new management team under new executive leadership to face new challenges.

i. Rising jet fuel prices.

ii. Emergence of new competitors (Virgin America)

iii. Higher labor cost due to shortage of pilots.

iv. Global recession.

Besides above factors, JetBlue Airways also need to evaluate its resource capabilities, relative cost position and competitive strength versus rivals and match the company's strategy to its internal situation. Following factors are most important and need to be considered with utmost priority:

i. Requirement of putting new operating procedures, communication systems, and information technology solutions to prevent weather related debacle.

ii. Signifantly higher debt equity ratio causing much higher interest cost.

iii. Lower Domestic market share

iv. Lack of plan to tackle the soaring jet fuel prices.

v. Declining passenger load factor.

vi. Sharp drop in stock price.

In light of the above discussion, the company needs to revise its strategic vision under the new executive leadership.

2. What were the key elements of JetBlue's strategy in 2008? How has the company chosen to attract customers in sufficient volume to earn profits? How does JetBlue offer its customers value?

Not much to add for part 1 & 2.

My addition for part 3:

Jet Blue offered its customers very competitive fares in comparison with other airline carriers. Though its average one-way fare reached to an all-time high of $138, it was still lower than the average domestic fare which was $331 as noted by The U.S. Department of Transportation. The company created a disciplined culture of excellence and continually improved its services and differentiated itself from its competitors.

3. Are JetBlue's functional area strategies consistent with its overall strategic approach? What policies, practices, and procedures have been developed to execute its business strategies and functional area strategies with proficiency?

Agreed. My addition:

Jet Blue hired full-time reservation agents who worked at home with company-supplied computers and second telephone lines. It needed only a small office space for training purpose only.

Selling some of it used airbuses and delaying new purchases to save on interest expenses and bring the operating expenses further down.

Passing on the savings to customers by offering lowest possible fares and excellent customer service.(customer value)

4. What are the factors driving change in the airline industry? How are they likely to impact the future attractiveness of the industry?

My view about factors driving change:-

Changes in cost and efficiency:

* Soaring

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