Strategic Planning: Jet Blue Airways
Professor John Mitchell
BUS 599 Strategic Management
April 24, 2011
This report has been produced to determine if the strategic planning in which new of Jet Blue Airways CEO David Barger has created, will help to ensure the company long term success. Addressed in this report will be the following topics: (1) What are the trends in the U.S. airline industry? How might these trends impact a company’s strategy? , (2) What is Jet Blue’s strategic intent? , (3) What are Jet Blue’s financial objectives? Has the company has been successful in achieving their objective? , (4) What are Jet Blue’s strategic elements of cost, organizational culture, and human resource practices? Does each of these elements provide the organization with a competitive advantage? , and (5) What are Jet Blue’s strategies for 2008 and beyond? Will Jet Blue be successful implementing these strategies or not?
Strategic Planning: Jet Blue Airways
What are the trends in the U.S. airline industry? How might these trends impact a company’s strategy? With the constant changes in the country’s economy, airlines are having more difficulties reaching a competitive advantage. The constant raise in fuel and oil cost to fuel airplanes has caused airlines to come up with a plan to maintain these cost. In addition, the airlines also focus on increasing profit return to shareholders and company executives. To achieve this goals airlines have started to charge fees for services such as for checking in in-person, booking with a credit card, overweight baggage by the pound, luggage per distance, booking online, bags that want fit under the seat, transferring tickets to another persons name, and to use the bathroom. From these new charges airlines have reported earning a $2.1 billion dollar profit in 2010 (Mayerowitz, 2011). What is Jet Blue’s strategic intent?
Airlines, such as JetBlue, strategized in a way that resulted in reduced operating costs. JetBlue’s strategic intent is to focus on customer service and low fares. Ceo David Neeleman’s constructed his plans upon his own experiences as a passenger, and also his professional experiences employed in the airline industry. Additionally, JetBlue’s customer service provided by its employees and Neeleman himself went above and beyond the call of duty to please customers. Neeleman once drove an elderly couple from the JFK airport to their home in Connecticut to save them $200 for a tax (Thompson, Strickland, & Gamble, 2010). To cut cost, JetBlue Airlines only offer only one class of seating. Each seat contained leather upholstered with satellite television monitors installed in every seat; which was free of charge. To cut operating cost, JetBlue has decided not to offer meals to its passengers. Instead they provided gourmet snacks to customers during flights. Another plan organized by JetBlue was when they implemented information technology. Customers now have the option to purchase electronic tickets better known as e-tickets, which helped to reduce costs by nine dollars. The use of e-tickets saved on operating costs and provided a convenience to its customer. The e- ticket allowed JetBlue’s reservation agents to work at home, which reduced the company’s overhead costs and use of supplies for paper tickets. The convenience of an e-ticket for its customers remedied the all too often occurrence of forgotten paper ticket. These strategic plans helped to reduce ticket prices and a shorter wait time for aircraft turnaround (Thompson, Strickland, & Gamble, 2010). What are Jet Blue’s financial objectives? Has the company has been successful in achieving their objective?
JetBlue’s financial goal was to make enough profit for expansion. JetBlue Airlines began with offering services to the New York and metropolitan area. JetBlue’s first home was the John F., Kennedy (JFK) International Airport. The mission was to operate...