Case Analysis
JetBlue AIRWAYS
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Introduction
Vision Mission & Values
Competencies
SWOT
Porter’s 5 Forces
Financial Analysis
Marketing
Corporate Social Responsibility
JetBlue Moving Forward
Closing
Ready for take off!
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Introduction
Incorporated in Delaware in August 1998
David Neeleman 1st founder, February 1999, under the name “NewAir.”
JetBlue followed other domestic airlines approach of offering low-cost travel, but sought to distinguish itself by its services, such as in-flight entertainment, TV on every seat and Satellite radio.
CEO’s vision “To bring humanity to air travel.”
JetBlue’s founders had set out to call the airline “Taxi” The idea was dropped later.
The company is headquartered at the Long Island New York.
Its main base is John F. Kennedy International Airport.
The airlines mainly serves destinations in the United States, along with flights to the Caribbean, The Bahamas, Bermuda, Barbados, Colombia, Costa Rica, the Dominican Republic, Jamaica, Mexico and Puerto Rico.
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Vision
Values
Mission
Slogan:
“To bring humanity back to air travel and to make flying more enjoyable.”
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Vision
To be amongst the most innovative and admired brands, renowned for service excellence.
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Robin Hayes
President and Chief Executive Officer
Mike Elliott
Executive Vice President, People
Joanna Geraghty
Executive Vice President, Customer Experience
James Hnat
Executive Vice President, Corporate Affairs, General Counsel and Corporate Secretary
Jeff Martin
Executive Vice President, Operations
Steve Priest
Executive Vice President, Chief Financial Officer
Eash Sundaram
Executive Vice President, Chief Information Officer
Marty Saint St. George
Executive Vice President, Commercial & Planning
Corporate Governance
Robin Hayes Director
Peter Boneparth Director
David Checketts Director
Virginia Gambale Director
Stephan Gemkow Director
Ellen Jewett Director
Gen. (Ret.) Stanley McChrystal Director
Joel Peterson Chairman
Frank Sica Vice Chairman
Thomas Winkelmann Director
Board of Directors
Core Competencies Distinctive Competency Sustainable Strategy
JetBlue’s core competency is its differentiated products and services. It believes that competitive fares and quality air travel need not be mutually exclusive. Below is a list of some of JetBlue’s customer amenities.
In-flight entertainment systems include 36 channels of free DIRECTV, 100 channels of free SiriusXM satellite radio, and options to view premium movie channels.
Comfortable leather seating provides sufficient legroom with an option to purchase “Even More” space, additional legroom. Part 6 in the series will discuss “Even More” products.
Free and unlimited brand-name snacks and beverages and the option to purchase premium food products and other products such as blanket and pillow sets are available for customers.
One 23-kilogram carry-on bag is free of cost, but additional baggage will be charged.
Fly-Fi, an in-flight internet service, will be available on all Airbus fleets by the end of 2014.
“Mint” transcontinental service is available from New York to Los Angeles and New York to San Francisco. This will include 16 lie-flat beds, four of which will be private suites—the first of its kind in the U.S. domestic market.
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Core Values
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Safety
Safety First & always in the business
C-A-R-E
Relations with customers and crew
Fun
Exhibit a sense of humor
Passion
Achievement Orientation & Striving
Integrity
Organizational Commitment, & honesty
Not to serve meals
Providing personal television
Leather seats instead of cloths
Did not use old & cheap planes
Use more fuel-efficient and less maintenance cost
Airbus
Did not fly too many routes
Choose point-to point flight
Use secondary airport which did not handle too much traffic
Reduce the Turnaround time
Use electronic ticketing
Paperless cockpit
Customer-oriented approach
Picking the right people
Create fun
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JetBlue Sustainability
We depend on natural resources and a healthy environment to keep our business running smoothly. Natural resources are essential for us to fly, and tourism relies on having beautiful, natural and preserved destinations for our customers to visit.
Down to earth in the air
Offset carbon
Face climate changes; educate
Economic value of clean beaches partnering with The oceans Foundation
Reporting FYI
Food for Thought
Recycle/Reuseful
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SWOT ANALYSIS
STRENGTH
*Two types of aircraft
* Low Operating cost
*Strong brand
*Efficient employees
*Two types of aircrafts in the fleet
*Consumer satisfaction
*Effective use of technology
*Advertisement
WEAKNESS
*Relative new company
*Two types of aircraft
*Concentration on middle class
*Shifting customer’s need
*Fleet now aging
*High maintenance costs
OPPORTUNITY
* Industry expansion
*Route & Fleet Expansion
*Creation of Airlines Alliance
*Technological
*Deregulation of international air travel
THREAT
*Security issues
*Increase in fuel price
*Strong Competition
*Global crisis
* Incidents like 9/11
*Pay/ Benefits package increasing
The Five Forces Model
Porter’s 5 forces
Threat of New Entrants - Moderate – Deregulated industry. Threat of new entrants higher during downturns in industry (e.g. JetBlue’s entry point). Existing airlines may encroach on an opponent’s major or regional market-share. High cost of entry into industry
Bargaining Power of Buyers – High – No or very low cost in switching airlines
Bargaining Power of Suppliers – High – two key supplies needed are planes and fuel. Fuel prices are negotiable on quantity. There are only two airplane suppliers, Airbus and Boeing.
Threat of Substitutes - Low – Buses, boats, trains and cars are substitutes but usually not cost or time effective substitutes for most consumers
Degree of Rivalry - Very High to Intense – Multiple competitors, high strategic stakes, innovation often easily imitated, and low switching costs for consumers
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Rivalry Among Existing Competitors
Threats of New Entrants
Bargaining Power of Buyers
Threat of Substitute Products or Services
Bargaining Power of Suppliers
Environmental
Avoiding Fuel Spills
Managing Hazardous Waste
Technological
Update/Upgrade aircraft
New Purchase
Online Launching
Social
Social media networks used as marketing strategy.
Word-of-mouth
Political
9/11 Attack
Crewmember Political Activities
Corporate Political Contributions
Economic
Expansion and growth continued throughout the economy change.
STEEP ANALYSIS
Political
JetBlue values the right and responsibility of our Crewmembers to participate in the political process. Such participation is entirely a matter a personal choice. Crewmembers are free to support the political process in a variety of ways, such as through personal contributions or by volunteering their personal time to candidates or organizations of their choice.
JetBlue is subject to extensive regulation at the federal, state and local levels of government and involved in a number of legislative initiatives in a broad spectrum of policy areas that can have an immediate and dramatic effect on our operations
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Financial Analysis
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Competitive Advantages
The airline industry is ultra-competitive but we believe we have three primary advantages:
Differentiated Product & Culture
Competitive Costs
High Value Geography
1.JetBlue offers the most legroom in coach, free TV, snacks and Fly-Fi on its flights. Combined with award winning service from our dedicated employees, whom we refer to as Crewmembers, we believe we offer the most compelling product in the sky
2. Our cost structure is lower than our larger network competitors. This enables us to offer attractive fares, grow our network, and still focus on profitability and shareholder returns.
We operate from six focus cities in some of the largest travel markets in the United States. We plan to continue to grow our network, with most of our flights touching at least one of these focus cities.
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Competitive Advantages
The airline industry is ultra-competitive but we believe we have three primary advantages:
Differentiated Product & Culture – JetBlue offers the most legroom in coach, free TV, snacks and Fly-Fi on its flights. Combined with award winning service from our dedicated employees, whom we refer to as Crewmembers, we believe we offer the most compelling product in the sky.
Competitive Costs – Our cost structure is lower than our larger network competitors. This enables us to offer attractive fares, grow our network, and still focus on profitability and shareholder returns.
High Value Geography – We operate from six focus cities in some of the largest travel markets in the United States. We plan to continue to grow our network, with most of our flights touching at least one of these focus cities.
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Vs
Southwest Airlines Co. and JetBlue Co. both rose to prominence as low-cost carriers that offered friendlier service than legacy carriers. Today, they are the two largest airlines in the U.S., aside from the big three legacy carriers.
However, in recent years, Southwest and JetBlue have had to rethink how they do business. As their workforces and aircraft fleets have aged, unit costs have risen. Legacy carriers have also made their own costs more competitive through bankruptcy restructuring. Southwest and JetBlue can no longer rely on low fares as their key differentiating point.
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JetBlue Airways (JBLU) operates a hybrid business model—refer to Must-know: Airline business models for more details on models. It offers point-to-point service like most low-cost carriers and combines differentiated product offerings, including various in-flight facilities that are generally not provided by other low-cost carriers. JetBlue caters to the niche market comprising customers that it defines as “underserved customers”—those looking for better features and benefits that aren’t provided by low-cost carriers and at a reasonable price that aren’t provided by network carriers.
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Youth & Education
At JetBlue, we are passionate about inspiring the next generation by partnering with influential nonprofit organizations and creating award-winning programs.
Community
JetBlue has a proud tradition of supporting dedicated community organizations in our BlueCities through partnerships, donations and crewmember volunteering.
Corporate Social Responsibility
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Environment
Communities and their environments are inherently connected. That is why we include
environmental programs in our community engagement.
Giving
JetBlue supports giving in the areas of youth & education, community and the environment. This is why we continue to encourage customers, crewmembers and business partners to become advocates for charitable giving in the communities we serve.
Corporate Social Responsibility Cont…
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Strategy Evaluation
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Over the next decade JetBlue strategy will be evaluated annually based on 4 perspectives
Financial performance
Customer Knowledge
Internal Business Processes
Thank You!!
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