Threats from Existing Competitors – Extremely High
Historically the Airline industry is one of the most competitive fields today. The large number of players in the industry combined with falling profit margins intensifies the competition. High exit barriers and mergers among competition makes it extremely difficult to growth in the industry
Threats from Buyers - High
The presence of substitutes and low brand loyaty creates substantial buying power in the market. Consumers of air travel today have more knowledge of the market than ever before. The explosion of online ticket site continues to grow and grow. Consumers are able to compare prices of nearly airline on any route. The perfect knowledge of customers today gives them a significant amount of buying power as all airlines are forced to compete on pricing. JetBlue will continue to be faced with many important pricing decisions as the company grows.
Threats from Suppliers – High
The few number of aircraft manfactueres in the airline industry create low buying power for the all airlines including JetBlue. Neotioation power is limited for Jetblue since most key factors of production including fuel and aircraft are sold by suppliers with little competition. JetBlue has developed working relationships with manufactures Airbus and Embraer to maintain the cost-saving efficiencies that the airline requires.
Threats from Substitues – Moderate (Inceasing)
Even in today’s dynamic business environment there exists few substitutes for air travel, particularly in the United States. If traveling shorter distances consumers may decide to drive instead of flying. However, this is not feasible for long distance and overseas travel. The majority of JetBlue’s flight operations are based in the Northeastern United States, where consumers can use rail travel as an alternative to flying. Recent growth in video conferencing is a major threat for JetBlue and the entire industry. As Technological innovations advance the segment of business travelers will trend downward.
VII. Marketing Strategy
JetBlue attracts buyers with the same attributes that the company was built on. The mission of JetBlue Airlines is dedicated to bringing humanity back to air travel. The company believes that if you take the approach of treating customers like friends and family along with providing transparency they can deliver long-term satisfaction and customer loyalty. JetBlue markets its customer-centric image with its ‘You Above All’ campaign. The purpose of this campaign is to show the world the comfort and low cost of JetBlue’s flights. Another goal of JetBlue’s marketing strategy is to create an image of transparency. JetBlue has been very successful in its approach to market its services through advertising and promotions in various popular social media outlets as opposed to traditional advertising method of the industry.
JetBlue is regularly outspent by competing airlines in terms of advertising dollars. The carrier...