JetBlue Airways Report
College Number
(Bottom Left of College Card)
100748166,100747716,100748397, 100746205,
Year:
2
Course Code
MN2201
Course Tutor:
Ailson de Moraes
Assignment No.:
1
Degree Title:
Strategic Management
Question No. & Title:
3. JetBlue Airways: Managing Growth
JetBlue Airways: Managing Growth
Report
1. Describe JetBlue’s business-level strategy and the value and cost drivers it uses to create and maintain tis competitive poison.
A successful business level strategy cannot be achieved without a good combination of differentiation and cost leadership activities. A company finds it difficult to have such a combination because it requires low costs and high value of the products simultaneously. (Azriel, 1999) JetBlue acquired the business model and the operational system of Southwest Airlines, which started as a low cost carrier, and that helped them to operate efficiently and to reduce costs. (De Moraes, 2012)
JetBlue has been efficient in providing high quality for its customers, which increases the value of the company and its products. The company offers free on-board Wi-Fi and free snacks and drinks, which is unlikely for a low cost carrier. They also provide more personal space for their passengers at their seats than any other company. (JetBlue Homepage) All these luxurious extras that are offered on a JetBlue flight are beneficial cost drivers for the company.
JetBlue is using a unique reservation system called home sourcing. (De Moraes, 2012) Around 700 of the company’s agents work from their homes. The former CEO David Neeleman states that this system is more profitable than hiring people from third-world countries to do the job. (Los Angeles Times, 2004) The company tries to cut costs in every possible that does not affect quality, which allows them to reduce the ticket price. Cutting costs does not mean cutting value because the company will still offer high quality but for less
(Bottom Left of College Card)
100748166,100747716,100748397, 100746205,
Year:
2
Course Code
MN2201
Course Tutor:
Ailson de Moraes
Assignment No.:
1
Degree Title:
Strategic Management
Question No. & Title:
3. JetBlue Airways: Managing Growth
JetBlue Airways: Managing Growth
Report
1. Describe JetBlue’s business-level strategy and the value and cost drivers it uses to create and maintain tis competitive poison.
A successful business level strategy cannot be achieved without a good combination of differentiation and cost leadership activities. A company finds it difficult to have such a combination because it requires low costs and high value of the products simultaneously. (Azriel, 1999) JetBlue acquired the business model and the operational system of Southwest Airlines, which started as a low cost carrier, and that helped them to operate efficiently and to reduce costs. (De Moraes, 2012)
JetBlue has been efficient in providing high quality for its customers, which increases the value of the company and its products. The company offers free on-board Wi-Fi and free snacks and drinks, which is unlikely for a low cost carrier. They also provide more personal space for their passengers at their seats than any other company. (JetBlue Homepage) All these luxurious extras that are offered on a JetBlue flight are beneficial cost drivers for the company.
JetBlue is using a unique reservation system called home sourcing. (De Moraes, 2012) Around 700 of the company’s agents work from their homes. The former CEO David Neeleman states that this system is more profitable than hiring people from third-world countries to do the job. (Los Angeles Times, 2004) The company tries to cut costs in every possible that does not affect quality, which allows them to reduce the ticket price. Cutting costs does not mean cutting value because the company will still offer high quality but for less
Bibliography: Azriel, Jay, 1999. Business-Level Strategy. Strategic Management, 1, 1. Badenhausen, Kurt, 2013. Airline Industry Atlas. Forbes, 01 October. 16. Belobaba, Peter B., 2002. The Airline Industry Since 9/11: Overview of Recovery and Challenges Ahead. MIT Global Airline Industry Program, [Online]. 1,7. Available at: http://web.mit.edu/airlines/conferences/DC-2002_documents/05-DC2002-Belobaba.pdf De Moraes, Ailson, 2012. Compilations Case Studies on Strategic Management. 1st ed. New York: McGraw-Hill Education (UK). Flanigan, James, 2004. Working at Home Pays Off for Firms. Los Angeles Times, 09 May. 5. Frank T. Rothaermel, 2012. Strategic Management Concepts & Cases. Edition. Mcgrawhill Education Europe. Jetblue. 1999. JetBlue. [ONLINE] Available at: http://www.jetblue.com/. [Accessed 20 November 13]. JetBlue Airways Corporation. Annual Report. Washington D.C. : United States Security and Exchange Commission. 2003 JetBlue Airways Corporation JetBlue Airways Corporation. Annual Report. Washington D.C. : United States Security and Exchange Commission. 2007 JetBlue Airways Corporation Kanning, M K, 2010. Valentine’s Masacre. JetBlue: All – You – Can – Jet Case Study, [Online]. 1, 8-9. Available at: http://markkanning.files.wordpress.com/2011/07/jetblue-all-you-can-jet-case-study-by-kanning-m-20111.pdf [Accessed 05 December 2013]. Mourik and Raven, R., 2006. A practioner’s view on Strategic Niche Management. Towards a future research outline, [Online]. 1, 4-6. Available at: http://www.ecn.nl/docs/library/report/2006/e06039.pdf [Accessed 21 November 2013]. Porter, Michael E., 1985. Competitive Advantage Creating and Sustaining Superior Performance. 1st ed. New York: Free Press. Souder, E, 2004. JetBlue Plans Caribbean Services Expansion. DowJones Business News, [ONLINE]. 1, n/a. Available at: http://biz.yahoo.com/djus/040302/1232000698 2.html [Accessed 16 October 2013].