Download - Jet Blue
JetBlue Airlines
[Success Story]
October 1, 2009
Efforts by:- Meenakshi Bisht Tushank Neeraj Garg
1. JetBlue Story
2. JetBlue Innovative Strategies
3. JetBlue SWOT Analysis
4. JetBlue PEST Analysis
5. JetBlue Market Positioning
6. JetBlue Porter’s five forces
7. JetBlue Mission Statement
8. Recommendations
AgendaAgenda
• JetBlue is the brainchild of David Neeleman
• Concentrating on New york, Florida and California
• Started with an initial capital of $160 million
• Operations began on February 11,2000
• The inaugural flight was between New York’s JFK International airport and Fort Lauderdale
• April 11, 2002 announcement of initial public offering
• Serving 46 destinations with over 400 flights daily
JetBlue storyJetBlue story
Innovative strategies Innovative strategies used used
by JetBlueby JetBlue• 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
Continue……Continue……
• 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
• Strength
Low Operating cost
Strong brand
Efficient employee
Single fleet
Consumer satisfaction
Effective use of technology
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SWOT AnalysisSWOT Analysis
• Weakness
Relative new company
Single fleet
Concentration on middle class
Shifting customer’s need
• Opportunity
Industry
Route & fleet expansion
Creation of Airlines Alliances
Technological Improvements in Airplane design, operation and maintenance
Deregulation of international air travel
• Threat
September 11th attack/Accidents
Security
Increase in fuel price
Strong Competition
Global crisis
New regulations by FAA
union
Market Positioning
Price
Low
High
QualityLow
Southwest
American Airlines
United Airlines
Delta
Frontier
AirTran
JetBlue
Position Map
PEST ANALYSISPEST ANALYSIS
• Political issue
September11, terrorists attack
Political stability
Competitive Airline industry
Regulatory factors
PEST ANALYSISPEST ANALYSIS
• Economic issue
Improved purchasing power
Rise in Inflation
Rise in oil prices
PEST ANALYSISPEST ANALYSIS
• Social issue
Greater customer awareness
Increased entertainment level
Security level of customers
Bad services & lost baggage
PEST ANALYSISPEST ANALYSIS
• Technological issue
Beginning of e-ticketing
Automated systems (cockpits)
Advertisements (newly introduced animated)
• Bargaining Power of Buyer – High
• Threat from Substitute – – High
• Bargaining Power of Suppliers – High
• Threat of New Entrance – Low
• Competitive Rivalry – High
Porter’s five force Porter’s five force analysisanalysis
• Bargaining power of Buyer - High
Standard product and services
Several options available to customers with what airline they choose to fly.
No switching cost – customer need a reason to stay
Customer can research easily using the internet
Customer incentives such as True blue which allow customers to earn rewards, book flight in an easier/faster manner, and stay on top of the upcoming event/sales
Customer loyalty : flying round trip across the US two times will earn you a free reward
• Threat from substitute – – High
Threat is high : numerous other airlines
Switching costs among other airlines are low
Switching costs among other transportation option are high for everything but short distance (Train, boat, car etc)
High existing barriers – bankruptcy laws allow loss maker to continue operating
• Bargaining power of suppliers – High
Only two suppliers – Airbus & Boeing
Little/No chance to bargain with suppliers
Fuel suppliers have a considerable amount of power because they control how much money is spent on the fuel used to fly the planes.
The volume of fuel supplied to the airlines is extremely important because JetBlue has prescheduled flights that require a certain amount of fuel.
•Threat of new entrance - Low
Deregulation made it possible for new entrance
Very high cost or capital required for entry
Low profit margin
Difficult to differentiate product & services
Brand image and loyalty is important
New airlines must be seen as safe and reliable
Hundreds of gone defunct trying to compete against the large airlines
•Competitive rivalry – High
Numerous competitors like Delta, United and American
In times of low or moderate industry growth, the competition gets fiercer as each one tries to nab customers from the other in order to keep their capacity utilizations at acceptable levels
The industry is extremely sensitive to economic cycles
Mission Mission • Bring Humanity Back to Air Travel
•Jet blue airways exists to provide superior services at low cost in every aspects of our customer’s air travel experience
• Core ValuesSafety CaringIntegrityFunPassion
Recommendations
•JetBlue needs to pursue a Cost Leadership Strategy
•Improve Fuel Hedge opportunities
•Initiate international Alliance
•Introduce point to point service in west coast markets
Thank YouThank You