STRATEGIC MANAGEMENT & POLICY
COMM 4005 / SP1
A CADRE OF NEW MANAGERS TAKES CONTROL
David Neelman’s original strategic vision was to ‘bring humanity back to air travel’ through combing low fares of a discount airline carrier with the comforts of a small cozy den in people’s homes. David’s strategic vision is a good one, but the strategic objectives, strategy development, and implementation and execution should be modified to address both the internal environment and external environment, such as; current technological, economic and industry conditions. The new executive leadership should be looking at ways to adjust and improve upon the strategy-executing process in order to improve JetBlue’s bottom line. This could be accomplished using the most powerful and widely used tool for systematically diagnosing the principal competitive pressures in a market and assessing the strength and importance of each of the 5 –forces model of competition (Porter’s competitive forces).
The key elements of JetBlue’s strategy in 2008 are as follows;
* Re-evaluate the ways the company was using its assets
* Reduce capacity and cut costs
* Raise fares and grow in select markets
* Offer improved services for corporations and business travellers * Form strategic partnerships
* Increase ancillary revenues
JetBlue has chosen to attract customers in sufficient volume to earn profits through the following; * Offering customers low prices on air fares
* Introduction of refundable fares and offered discounts to corporate travellers * Partnership with Oasis Day Spa to offer various spa services to travellers * Partnership with Google Maps so that flights could be tracked live on the airline’s website * Partnership with other airlines to make it easier for travellers to connect to more places * Provide travellers with access to a recreational area for children * Provide additional flight entertainment such as satellite radio and movie channels * Create comfortable flying conditions such as more comfortable seats (leather seating, additional leg room) * Offer customers more available flight destinations and more efficient routes JETBLUE AIRWAYS
* JetBlue offers its customers value by reducing overhead costs, such as saving on travel agent commissions by promoting online bookings, which translate into lower fares. JetBlue paid special attention to the little details that customers found special and acted on it. An example would be the various partnerships JetBlue formed with other service providers to offer special perks such as massages, manicures, inflight entertainment, etc. Lastly, JetBlue offers its customers value through its “Passenger Bill of Rights” which informs the customers what they can expect from JetBlue.
JetBlue’s functional area strategies are consistent with its overall strategic approach. * Functional area of finance:
* JetBlue increased its fares to improve its bottom line
* JetBlue reduced service at selected cities that were not operating at full capacity * JetBlue sold some of its fleet which were not being used at full capacity in order to generate cash flow * JetBlue delayed the delivery of new airplanes in order to post-pone payment * JetBlue introduced various charges to increase ancillary revenues
* Functional area of sales and marketing:
* JetBlue introduced electronic ticketing and allowed customer to conveniently pay using PayPal * JetBlue offered various services to customers that were not offered by other airlines (such as massages, manicures, yoga cards, etc.) * JetBlue created the Customer’s Bill of Rights
* Functional area of human resources:
* JetBlue offered training at its own university
* JetBlue only hired those that they felt were qualified and would work well in...
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