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jet blue- SWOT analysis, PEST analysis, porter's five force

jet blue- SWOT analysis, PEST analysis, porter's five force

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  • With the exception of a few carriers such as Southwest Airlines and JetBlue, many of America's airlines are have been losing significant amounts of money. The problems they face are daunting. One of the problems involves travelers concerns about flying after the attacks on the United States on September 11, 2001. Another problem involves the increased costs of security, which the airlines must absorb. The latest blow involves the massive increases in the cost of jet fuel. With the price of crude oil at more than $50 a barrel, already an all time high, and with prices continuing to rise every airline is feeling the financial pinch. Add in the fact that so called full service airlines are losing passengers to discount airlines such as Southwest and JetBlue and it becomes easy to see why airline stocks are in disfavor on Wall Street, and why many airlines' stock values have plummeted. JetBlue is in the transportation sector of the economy and operates as a commercial airline. JetBlue is one of the few exceptions to this rule. By virtue of the fact that the company has been able to control cost, and generate higher revenues in a post-911 world, its stock price has managed to remain steady
  • With the exception of a few carriers such as Southwest Airlines and JetBlue, many of America's airlines are have been losing significant amounts of money. The problems they face are daunting. One of the problems involves travelers concerns about flying after the attacks on the United States on September 11, 2001. Another problem involves the increased costs of security, which the airlines must absorb. The latest blow involves the massive increases in the cost of jet fuel. With the price of crude oil at more than $50 a barrel, already an all time high, and with prices continuing to rise every airline is feeling the financial pinch. Add in the fact that so called full service airlines are losing passengers to discount airlines such as Southwest and JetBlue and it becomes easy to see why airline stocks are in disfavor on Wall Street, and why many airlines' stock values have plummeted. JetBlue is in the transportation sector of the economy and operates as a commercial airline. JetBlue is one of the few exceptions to this rule. By virtue of the fact that the company has been able to control cost, and generate higher revenues in a post-911 world, its stock price has managed to remain steady
  • Safety: It always comes first. We each wear the hat of the Chief Safety Officer. It’s everyone’s job to ensure a safe environment and experience for our Customers and each other. • Caring: Respect and understanding are the hallmarks of who we are. Caring is what brings the JetBlue Experience to life. • Integrity: Doing the right thing. It’s the only way to do business, so we communicate openly and honestly. That’s how we earn trust--from each other and our Customers. • Fun: Work should be a friendly environment—a place that you like. The equation is simple: we enjoy our jobs and our Customers enjoy the JetBlue Experience. • Passion: JetBlue is more than just an airline. We deliver a great experience and an excellent product with dedication and enthusiasm. That’s what keeps our Customers coming back.
  • In order to continue their success, jetBlue needs to pursue a Cost Leadership Strategy.  A large part of their identity, as a company, is centered around their low-cost flights paired with other luxuries they have provided for their customers.  Without the low-cost alternative to the major airlines, jetBlue would not have had the same level of success.  In addition, with other new low-cost airlines like Independence Air following suit with jetBlue, they must maintain this aspect of their identity.  Provided that they continue to expand at a safe pace and can expand to other markets, jetBlue will continue their trend of cheap airline fairs.  The greatest American example of low cost identity is Wal-Mart.  Its customer base started and continued because people knew that they could count on low prices in their stores. For the sake of analogy, if jetBlue can parallel Wal-Marts attitude with a similar Cost Leadership Strategy, then their continued success is evident. 

Jet Blue Jet Blue Presentation Transcript

  • JetBlue Airlines [Success Story] October 1, 2009 Efforts by:- Meenakshi Bisht Tushank Neeraj Garg
    • JetBlue Story
    • JetBlue Innovative Strategies
    • JetBlue SWOT Analysis
    • JetBlue PEST Analysis
    • JetBlue Market Positioning
    • JetBlue Porter’s five forces
    • JetBlue Mission Statement
    • Recommendations
    Agenda
    • 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 story
  • Innovative strategies used by 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……
    • 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
      • Advertisement
    SWOT 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 11 th attack/Accidents
      • Security
      • Increase in fuel price
      • Strong Competition
      • Global crisis
      • New regulations by FAA
      • union
  • Market Positioning Position Map Price Low High Quality Low Southwest American Airlines United Airlines Delta Frontier AirTran JetBlue
  • PEST ANALYSIS
    • Political issue
      • September11, terrorists attack
      • Political stability
      • Competitive Airline industry
      • Regulatory factors
  • PEST ANALYSIS
    • Economic issue
      • Improved purchasing power
      • Rise in Inflation
      • Rise in oil prices
  • PEST ANALYSIS
    • Social issue
      • Greater customer awareness
      • Increased entertainment level
      • Security level of customers
      • Bad services & lost baggage
  • PEST 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 analysis
    • 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 – H igh
      • 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
    • 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 Values
      • Safety
      • Caring
      • Integrity
      • Fun
      • Passion
    • 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 You