StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Jet Blue Airways - Case Study Example

Cite this document
Summary
The author of this case study under the title "Jet Blue Airways" touches upon the business led by the mentioned air company. It is mentioned that in a competitive market, for a provider to be successful they would need to have an edge over competitors…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER91% of users find it useful
Jet Blue Airways
Read Text Preview

Extract of sample "Jet Blue Airways"

Jet Blue Airways In a competitive market, for a provider to be successful they would need to have an edge above competitors. This edge is acquired by either offering a good or a service that others do not offer; offering the same goods or services as they do but differently; or by offering value added services that competitors do not offer. In a volatile market however, flexibility to changing situations is even more important than all other competitive strategies as it ensures that the business in question will adapt more easily to market fluctuations without unnecessary and avoidable losses. Trends in the US airline industry and their impact to company strategies The US airline industry was undergoing many and varied changes that an investor was quoted saying that it was better to stash ones money under the pillow than invest in the airline industry. This is because airline fortunes change quite quickly and by large margins that if one made a profit, it is appealing but a loss if incurred, it is devastating. There are many airlines competing in the US market most of which register losses for years. This has proved difficult especially for companies with limited resources that compete with those with enough resources to afford less travel charges for customers and higher pay packages for employees. These two factors result in mass exodus of customers and staff from poor performing airlines. The more financially able firms were also the ones that could offer high quality service, more value addition services and subsidized rates. Aviation colleges were not graduating enough pilots and other airport staff to cater for the high demand in this industry. Thus, the airlines that could not afford the high cost of hiring more staff had to do with grounding their planes since there is an official limit of hours that an employee should work per day. The high number of airlines in the US causes congestion in the JF Kennedy International Airport (JFKIA). Congestion results in delays and flight cancellations that in turn resulted to loss of customers for airlines who had no alternative strategies for dealing with these inconveniences. Airlines undergoing financial difficulties could only obtain limited financial assistance from well-off multinationals since the law required that a Non-US company can only have a maximum 25% stake in a US airline. No US airline could obtain foreign financial assistance beyond 25% of its value. The only other option left for these companies were mergers and cost cutting especially with the steep rise in cost of crude oil and by extension, jet fuel. Strategic Intent Jet Blue had planned to expand mainly by increasing the number of destinations that it had direct flights. This was achieved by identifying an alternative hub since JFK Airport was overly congested. In addition, the company provided discounted services that included low fares, snacks during flights and speedy clearance to travel. Value addition was another strategy used to attract customers mainly by offering services like private massage, manicure, hair styling, a children play area and a big screen TV. Jet Blue put these fine details into consideration and they paid off well making customers want to seek their travel services. Financial Objectives Before offering low cost services, the company had to cut down its operation costs. First, it bought economical planes for its fleet by replacing Boeing 737 with Airbus A320 that is easier to operate and maintain. Second, it used IT to cut operational costs by use of Open Skies software to manage internet bookings, electronic ticketing and revenue management. Use of IT also included phone bookings and use of PayPal to pay for their tickets. These strategies worked well for Jet Blue as it continued expanding at a faster rate than competition. Jet Blue had its staff assist in areas for which they did not specialize in and this enabled reduction of operational costs by not hiring extra staff. It can therefore be said that Jet Blue succeeded in applying these financial and operational strategies successfully as they were used during the period that the company experienced exponential growth. However, these strategies did not work well in the end as they did not cushion the company against the harsh wave of financial recession. Strategic Elements of Cost, Organizational Culture, and Human Resource Practices The company was organized such that customers benefitted from the core company values of safety, caring integrity, fun and passion. These values made both customers and employees feel that they were an active and vital part of a healthy and effective system. The company raked in considerable profits while employees received satisfaction, value and other benefits. The Human Resource made employees, passengers and vendors feel special and important by referring to them as crewmembers, customers and business partners respectively. This ensured that company values become an integral part of the company’s Human Resource Management achieved in the three core functions of the HR department; hiring, training and paying. During the hiring process, recruiters ensured that after sifting through the multitude of resumes received, they ended up recruiting team players. To supplement the shortage of graduates Jet Blue collaborated with universities to train pilots who were then absorbed into the system. In the period that operating costs spiked due to rising jet fuel prices, the company responded by freezing its hiring to save on costs. All in all, these strategies, though they did not cushion Jet Blue from making losses, they played a huge role in keeping them in business when many airlines were closing up or being declared bankrupt. Jet Blue opened a university to instill leadership skills into employees. Jet Blue University was started when the company got into financial complications due to poor management Though the company paid its employees at much lower rates compared to other airlines, it provided them with better health coverage, ensured they were on the profit sharing plan and they had elaborate and workable retirement plans. All these ensured that not only were staff well qualified for their jobs but they also felt personally responsible the success of the airline (Rovenpor and Michel 2007). Strategies for 2008 And Beyond Jet Blue management by 2008 had learnt a great deal from the recession and it came up with new strategies to reduce costs. Reducing the total operational costs has the effect of maximizing profit and minimizing losses. Secondly, the company’s spending was to ensure that company assets were used maximally but sustainably. The third strategy in the new era was market specialization coupled with gradual air fare increase. The fourth strategic plan was to create packages that would attract business travellers mainly from the corporate world because corporations have more to spend compared to other businesses and once a working relationship has been formed with them it can be sustained for years. The fifth strategy was to attract strategic partners especially those that would ensure the company survived hard economic times. The final strategic plan was to increase ancillary revenues to supplement what was earned by the main business. All these strategies work if applied to the letter especially the last one due to the limitless possibilities it represents especially if the management remains innovative and focused. Reference Rovenpor, J., & Michel, M. (2007). JetBlue Airways: A cadre of new managers takes control. Manhattan College. Read More
Tags
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Jet Blue Airways Case Study Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from https://studentshare.org/business/1433205-jet-blue-airways-case-study
(Jet Blue Airways Case Study Example | Topics and Well Written Essays - 1000 Words)
https://studentshare.org/business/1433205-jet-blue-airways-case-study.
“Jet Blue Airways Case Study Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/business/1433205-jet-blue-airways-case-study.
  • Cited: 0 times

CHECK THESE SAMPLES OF Jet Blue Airways

The Recruitment and the Selection Problem of Jet Blue Airways

The paper "The Recruitment and the Selection Problem of Jet Blue Airways" deals with the study that provides certain actions and implementation plans as those are very important to execute the strategies that have been identified in the recommendation plan.... The case study is all about the Jet Blue Airways which was founded by David Neeleman in the year 2000.... The selection process of the Jet Blue Airways has been focused on the ability of the applicant to handle the situation on several hypothetical situations....
10 Pages (2500 words) Case Study

Jet Blue Airways: A New Beginning

The following analysis is about case study on JetBlue airways, which describes its enormous success, profits and growth after its launch and also its failure due to inability to withstand external factors that affected its business after few years.... This process was successfully implemented at JetBlue airways, which was experiencing huge losses due to various external factors like fluctuation in prices, bad weather conditions, etc.... This paper evaluates the strategic change process adopted by JetBlue airways in modifying their irregular operations (IROP) management to create better management and processes that resulted in formation and implementation of the IROP Integrity....
6 Pages (1500 words) Case Study

Public Relations of BlueJet

Despite the challenges the company faces as a result of accidents, it has one of the strongest marketing strategies which Jet Blue Airways has had its share of difficulties in the public relations sector such as the stranding of two planes in the JFK airport in the snowstorm of February 14, 2007.... In this report, I shall focus on how Jet Blue Airways is able to keep a growing number of local and domestic flyers.... This report shall assess the methods, strategies and practices used by Jet Blue Airways with respect to improving public relations....
12 Pages (3000 words) Term Paper

Performance of JetBlue Airways

It drives its success from its innovativeness, expertise of its management team and its financial Business February 16, Essay Analysis of an entrepreneur: JetBlue Airways Background Jet Blue Airways started operations in year 1999.... At present, JetBlue airways employs 12,080 employees and is able to achieve sales growth of USD $4.... 13 February 2013Bloomberg Businessweek JetBlue airways Corp....
4 Pages (1000 words) Essay

JetBlue Airways: A SWOT Analysis

JetBlue airways, founded by David Neeleman in 1999, known as the no-frills low cost airlines, is known for rising to success in a short span of time, especially when the economy was low.... Their success is attributed to operational strategies, low-cost practices, high customer… Nevertheless, their strategies do face certain challenges; the following section analyzes JetBlue's course of growth as explained by Dutta and Regani (2003) through their case study, in terms of strengths, weaknesses, opportunities 1....
4 Pages (1000 words) Case Study

Java Impact on Business

Technology refers to machinery or equipment developed using the knowledge of science for practical purposes which may include solving practical problems.... Technology has been applied especially in the sector of information in businesses to enhance communication and sharing of… Information technology therefore can be understood as all those forms of technology that can be utilized in creation, storage, exchange as well as use of information in the various forms which may include, business data, motion and still pictures or conversations and When focusing on technology and business there is need for a deeper understanding of one's business in order to establish how technology can be applied to transform the particular business an individual runs....
5 Pages (1250 words) Research Paper

The Strategies Follows by Airbu

Based in Toulouse, France, and with significant activity across Europe, the company produces around half of the world's jet airliners.... The paper 'The Strategies Follows by Airbus' presents the company Airbus which is a part of the EADS group.... The paper further discusses the trends of the civil aircraft manufacturing industry and the strategies followed by Airbus which has made the company successful....
8 Pages (2000 words) Term Paper

Java Impact on Business

hellip; This paper has found out that Twitter as a social network and communication App in communication technology is a “ game-changer ” in business; which has transformed Jet Blue Airways earning its customer loyalty, a good relationship with customers, good service delivery, and overall improved output....
5 Pages (1250 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us