Jet Blue Airways: Case Study
1. Draw up a SWOT analysis and describe JetBlue’s Strategy.
* Low cost airline fares and operations
* Experienced management
* Creating demand in under-served markets
* Customer service oriented (i.e. leather seats with more legroom, in-flight entertainment, better refreshments than competition) * Political backing and support
* Competitive pay and benefits increasing employee retention
* Sustaining low cost fares and operations with a down economy * Unpredictability of the market
* Political backing and support
* Does not run service to all major airports
* Increased destinations (inside and outside the U.S.)
* Growth and increased profitability
* Make competition irrelevant
* International growth
* Airport security causing travelers to use other means
* Unpredictable fuel prices
* Competitors using JetBlue strategies to provide similar service * New competition
* Recession / Depression
* Unsustainable growth rate
* Weather / Natural disasters
2. What are the dangers of rapid growth? Or not growing fast enough?
* Overburdening employees which creates excessive turnover * Not enough overhead to meet consumer demand
* Product quality and service decreases
* Competitors learning from your business mistakes
* Emergency need to leverage growth causing higher interest rates on loans * Organizational infrastructure not able to sustain growth * Higher risk
Not Growing Fast Enough
* Missed opportunities
* Competitor takeover or buyout
* New entrants into market making your business irrelevant * Employee turnover
* Consumers taking business elsewhere to meet their needs * Loss of business or financial ruin
3. What are the key success factors for JetBlue?
The most important key success factor for JetBlue is the management team they built to oversee the operations and growth of the company. Using top executives from South West Airlines as well as other competitors has allowed JetBlue the opportunity to model their company after the “good practices” of others, and in return this has created a strong competitive advantage for JetBlue. The other key success factors are:
* Low operating costs
* High quality
* Maximum return per passenger mile
* Low fares
* Service to underserved markets
* Flying at lower altitudes which kept JetBlue out of heavy traffic and decreased turnaround time * Strong management team
4. What will it take to execute on these factors?
It will take good management and leadership with strong organizational goals and core values. It will take all levels of the management team to create a motivating environment and to treat all the employees as the company wants the customers to be treated. Finally, it will also take JetBlue making sure that they follow through on their promises to the financial and political backers, customers, and most importantly, their employees.
5. What are the HR practices that make these factors work? How? Discuss each.
JetBlue hires the very best people, provides terrific training, career growth opportunity and a safe, fun environment. They treat their employees the way they expect the customers to be treated resulting in employee retention.
Employees are given the opportunity to communicate concerns or ideas to top management. Two-way communication between employees and management created a caring and trusting environment for JetBlue.
JetBlue created an environment that was fun for crew members and customers. Their most important element of the environment was to care about their people from end to end. This provides a motivational environment where employees want to come to work and give their very best.
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