Jet Blue Strategic Management Essay

1925 words - 8 pages

Executive summary

JetBlue was founded by David Neeleman in 1998 and is America’s youngest airline flying to over 35 destinations including Caribbean and Atlantic regions.

The key strategies and competitive advantages of JetBlue are the maximisation of its workforce productivity, high quality of service and innovation with affordable prices, low cost ticketing system, and efficient aircraft utilisation.

JetBlue is a low-cost airline with a differentiated approach in regards to the high level of customer service it offers. It thus follows a best-cost provider strategy because it aims to give customers more value for money. As we will see in this report, JetBlue achieves a best-cost position from its ability to incorporate attractive features at a lower cost than its rivals.

This report also investigates the significant factors driving change in the airline industry, and while it may seem unattractive, JetBlue has the capabilities and resources to continue its growth and profitability.

The recommendations for JetBlue’s management is to continue with its best-cost strategy through identifying cost minimising opportunities within its value chain, while at the same time investing aggressively in technology and innovation to differentiate from its rivals.

Table of Contents

1. Strategic vision

2. Functional strategies and key activities

2.1 Customer service
2.2 Human resources
2.3 Policies, practices, and procedures

3. Factors driving change in the airline industry

3.1 Fuel
3.2 Consolidation
3.3 Unionisation
3.4 Economic crisis

4. Future strategies

4.1 Key recommendations/primary focus
4.2 Secondary focus

1. Strategic vision

Neeleman himself is noted for summarising his revolutionary strategic vision through his statement of wanting to “bring humanity back to air travel” (Rovenpor, 2005) through offering passengers low fares, friendly service, and a high quality product that follows Porter’s generic strategy of being a best-cost provider. His vision is reflected in JetBlue’s values of safety, caring, integrity, fun, and passion (Rovenpor, 2005).

Neeleman’s strategic vision hasn’t really changed but it has evolved somewhat due to the factors in the external environment, the most prominent being the September 11 terrorist events. Now, JetBlue must not only be the low-cost carrier with comfort but also the carrier with a customer safety strategy, which the airline has been quick to implement. This slight change or addition to the strategy might be considered a minor inflection point because this change in the environment requires a change in strategic direction in order to sustain JetBlue’s success.

2. Functional strategies and key activities

The functional strategies of JetBlue focuses on minimising costs while providing superior customer service which enables them to implement and execute their chosen strategy of being a best-cost provider.

2.1 Customer Service

The customer...

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