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

Assessment of Strategic Elements of JetBlue - Case Study Example

Cite this document
Summary
The paper "Assessment of Strategic Elements of JetBlue" states that JetBlue’s partnership with Lufthansa to allow the former to use Lufthansa’s terminals worked to their advantage. JetBlue lowered its capacity by selling its aircraft (nine) and cut costs by delaying the purchase of 21 new planes…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER91% of users find it useful
Assessment of Strategic Elements of JetBlue
Read Text Preview

Extract of sample "Assessment of Strategic Elements of JetBlue"

? JetBlue Case Study JetBlue Case Study JetBlue Airlines inaugurated its initial ceremonial flight in 2000. Since then, the company has developed into a multibillion dollar entity. This report will examine the business strategies of JetBlue Airlines, discussing trends in the US airline industry and how such trends influence company’s strategies. The company’s key strengths such as customer value and employee orientation, as well as the capacity to establish and implement effective and targeted strategies have enabled JetBlue Airlines to expand both its domestic and international market base. Trends in the U.S. airline industry Trends within the US airline industry such as crude oil pricing and passenger fees, post 9/11 and pilot shortages have substantial effects on the performance and strategies of airline companies. Prices of crude oil have increased considerably in last few years, which has had a substantial effect on the pricing of passenger fees. For instance, in 2008, crude oil prices rose to a record $140 per barrel and this price swell caused airlines to labor to offset fuel costs. Many companies were forced to implement new passenger fees to cater for the surge in fuel prices. However, while fuel prices are currently low, airlines continue to increase revenue by passing costs to its customers. Shortages of pilots have also forced companies to adjust their strategies. As baby boomers retire, the airline industry suffers a shortage of pilots. Prior to becoming captains, pilots have to gain sufficient flight hours. The International Air Transport Association asserts that airlines need nearly 3,000 additional pilots each year, which is far more than training schools provide (Thompson et al., 2010). Post 9/11 aviation security also influences airlines’ strategies. After the 9/11 terror attack, Congress implemented the Aviation and Transportation Security Act (ATS). This led to the creation of the Transportation Security Administration (TSA) and established that federal employees should be in charge of airport security at all airlines (Kaplan, 2006). This forced airlines to institute numerous layers of security. JetBlue’s strategic intent  David Nelleman founded JetBlue with the view to bring humanity to air travel. The aim was to offer lowly discounted comfort and service to customers. The company’s philosophy was to delay flights instead of cancelling them entirely. The firm was the first airline to publish a bill of rights for its passengers. This document outlines its policies with regard to the airline’s customers. It launched electronic ticketing to enhance convenience and offered additional services such as in-seat television, as well as PayPal payments for tickets. In order to enhance its customer and shareholder value, the airline established rapid and strategic growth initiatives. In 2000, the firm made a rather chancy decision by starting services in New York’s JFK Airport, which was already quite congested. JetBlue took advantage of the lighter 8 to 9am flight window to offer appealing flights to young and wealthy New Yorkers and those travelling to the city. In 2008, JetBlue launched Terminal 5 at JFK to offer customers more efficacy and convenience, while also saving them up to $50 million in fuel, vouchers and labor. Between 2003 and 2008, the airline launched service to numerous destinations such as Portland, Fort Lauderdale, and San Diego among others. By the end of 2007, JetBlue had expanded its operations to more than 53 destinations (Thompson et al., 2010). However, this impressive growth did not immediately trickle down to add shareholder value.   JetBlue’s financial objectives While JetBlue showed immense promise, its stock values dropped by 50% in a span of five years ending December 2007. This is because between 2003 and 2007, the company’s operating expenditure increased by 222%. This is primarily because of jet fuel (532% rise) and interest expenditures (658% rise). Rather than handling the interest expenditures, JetBlue instituted a conservative financial strategy through which it sustained substantial liquid ratios comparative to other airlines. JetBlue expelled this cash balance and re-categorized its securities from current assets to long term investments. JetBlue was still successful in attaining new equity capital, as well as credit required to sustain the company in spite of its setbacks. Assessment of Strategic Elements Cost  JetBlue operates at a relatively low cost. Thompson, Strickland& Gamble (2010) assert that, in 2008, the airline’s operating expenses were $12.17 per revenue of passenger mile compared to America Airline’s $18.18 and Southwest’s $13.85. JetBlue’s planes like Airbus A320 are newer than its competitors’ airlines thus need low maintenance. JetBlue also increased flying time by lowering turnaround time. These strategies have lowered JetBlue’s operating costs. Organizational culture JetBlue’s organizational structure centers on five phases. The company established its values first before selecting managers and employees to mirror the values. JetBlue exceeds its employees’ expectations and listens to its customers. Finally, JetBlue created a plan to attain excellence. Some of JetBlue’s values are safety, fun, passion, caring and integrity. The George Farman grills offer employees a chance at fun. Human resource practices JetBlue has an intense focus on people. The company established the Aviation University Gateway and collaborates with universities to offer internship programs to exceptional candidates. The company addressed a decline in leadership confidence by offering leadership training at the Orlando International Airport. To atone for paying its employees lower base salaries than other airlines, JetBlue offers health coverage and 401k retirement benefits. JetBlue’s strategies after 2008 In 2008, JetBlue established fresh strategies to assess the utility of assets, cut costs, grow selected markets, reduce capacity and enhance ancillary revenues. JetBlue’s partnership with Lufthansa to allow the former to use Lufthansa’s terminals worked to their advantage. JetBlue lowered its capacity by selling its aircrafts (nine) and cut costs by delaying the purchase of 21 new planes. JetBlue also created new fees to raise revenue levels and offered incentives to corporate travelers. These strategies have been successful especially in 2009 as it earned net revenue of $58 million with operating margins of 8.5% (JetBlue, 2009). Because of JetBlue’s prosperity in tough times, it is highly likely that its robust strategies, as well as cash-rich position, will allow the company longevity in the long term (Dearman, 2009). References Dearman, W. (2009). Jet Blue’s Strategy behind the All You Can Jet Pass. Retrieved from http://thestrategyblog.com/index.php/archives/287/jet- blues-strategy-bhind-all-you-can- jet/. JetBlue. (2009). JetBlue's 2009 Annual Report on Form 10-K. Retrieved from http://phx.corporateir.net/External.File?item=UGFyZW50SUQ9Mzg1MDQzfENoaWxkSUQ9Mzg2NzExfFR5cGU9MQ==&t=1. Kaplan, E. (2006). Targets for Terrorists: Post-9/11 Aviation Security. Retrieved from http://www.cfr.org/publication/11397/targets_for_terrorists.html. Thompson, A. A., Strickland, A. J., & Gamble, J. E. (2010). Crafting and executing strategy: The 7 quest for competitive advantage: Concepts and cases: 2009 custom edition (17thed.). New York: McGraw-Hill. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“JetBlue Case Study Example | Topics and Well Written Essays - 1000 words”, n.d.)
JetBlue Case Study Example | Topics and Well Written Essays - 1000 words. Retrieved from https://studentshare.org/business/1447866-jetblue-case-study
(JetBlue Case Study Example | Topics and Well Written Essays - 1000 Words)
JetBlue Case Study Example | Topics and Well Written Essays - 1000 Words. https://studentshare.org/business/1447866-jetblue-case-study.
“JetBlue Case Study Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/business/1447866-jetblue-case-study.
  • Cited: 1 times

CHECK THESE SAMPLES OF Assessment of Strategic Elements of JetBlue

Jet Blus - Articles Case Studies

While this may be in part contributed to belief that the profit margin is not extensive enough to make the product worth taking on, it also seems apparent that the particular structure of jetblue's airline allows them to offer these pass flight options.... One of the notable elements of this promotion is that even while it was successful, it's not believed that other airlines would be able to adopt this promotion.... The next article under examination is “jetblue's 'All You Can Jet' Pass Sells Out'....
3 Pages (750 words) Essay

Company Analysis: Southwest Airlines

The case study analyses alignment of initiatives towards strategic management.... This case study "Company Analysis: Southwest Airlines" discusses the measurement and control systems, financial performance, key performance indicators of Southwest Airlines.... ... ... ... The financial statement of Southwest Airlines is prepared according to the generally accepted accounting principles (GAAP) followed in the United States of America....
18 Pages (4500 words) Case Study

Web systems integration

From the above DTD, the elements define the below data that is already created by XML schema (Source of DTD data).... Service Bus in between applications can eliminate hard coded integration lines which are very direct between applications and in turn create a rather manageable layered integrated platform which applies a loosely coupled, service oriented design....
10 Pages (2500 words) Essay

Flight Operations Quality Assurance

program designed to make aviation or airplane flights safer by providing proper coordination with the key elements of the industry, which are the commercial airlines, the pilots and the FAA.... The basic objective of this partnership is to allow the aforementioned parties to.... ...
5 Pages (1250 words) Essay

Operation management

the United States market has taken a bigger share of these claims due to its heightened competition and threats of terrorism.... Advancement in technology, contemporary management practices.... ... ... nd use of internet have worked to make the competitive arena worse leading to lower chances for airlines to be consistently profitable and relevant to customers....
16 Pages (4000 words) Essay

Jet Blue Recruitment Efforts

carriers, jetblue Airways.... In terms of hiring practices, jetblue follows the Equal Employment Opportunities laws through its Corporation Affirmative Action Policy, which impedes any ways of discrimination and harassment against any candidate, employee, supplier, and customer.... According to the Corporation Code of Conduct (2014), jetblue respects individuals in a non-discriminatory manner and without regard on race, gender identity, sexual orientation and religion, age, citizenship, disabilities and such status as a veteran....
9 Pages (2250 words) Essay

Organization Behavior Analysi: Pluralsight

The "Organization Behavior Analysis: Pluralsight" paper assumed the star model whereby the author elaborates on each element of Pluralsight.... According to the star model, the strategy of an organization should include; mission statement, vision, strategies, and goals of that particular organization....
10 Pages (2500 words) Case Study

Soutwest Airlines in 2010: Culture, Values, and Operating Practices

Finally, some of its threats include its competitors, for instance, jetblue Airways; who may take its customers as it also offers low prices to its customers at low expenses.... "Southwest Airlines in 2010: Culture, Values, and Operating Practices" paper focuses on South West Airlines, a very successful airline that deals with domestic air travel in the US....
6 Pages (1500 words) Case Study
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