UNIVERSITY OF CENTRAL PUNJAB

STRATEGIC MANAGEMENT
ASSIGNMENT # 1

DATE: 5/11/2012

TO: PROF. AMJAD HUSSAIN

BY:

ZAIN ALI SYED

(L1F10MBAM2171)

SECTION: A

EFE Matrix
Opportunities
Weight The demand of air travel increased Untapped international market Higher fares of other airlines Usage of airlines has been effected badly since 9/11 Use of latest technology for tracking the lost luggage of customers Increasing use of internet can help to reach and facilitate more customers 0.08 4 0.32 0.05 4 0.20 0.10 3 0.30 0.10 0.12 0.10 3 4 3 0.30 0.48 0.30 RATING WS

Threats
Weight
Threats of union labor strikes Inflation and rising prices of fuel Security issues causing customers dissatisfaction. Competitors giving same services at very low prices. Increase in taxes by government. Total weighted score 0.10 1.00 2 3.22 0.20 0.10 3 0.30 0.10 3 0.30 0.07 4 0.28 0.08

Rating
3

WS
0.24

IFE Matrix

STRENGTHS
Charging low fares Rank #1 in customer service Low labor wages New, efficient and reliable planes Management staff is skilled and trained. Better financial position.

WEIGHT
0.1 0.05 0.12 0.08 0.05
0.12

RATING
4 4 4 3 3
3

WS
0.4 0.20 0.48 0.24 0.15
0.36

WEAKNESS
Employees switching to competitive firms. On time arrivals % is low Limited access to International markets Less profit because of low fares Difficulty in recruiting skilled and trained employees.

WEIGHT
0.10 0.10 0.10 0.13 0.05 1.0

RATING
2 2 1 2 2

WS
0.20 0.20 0.10 0.26 0.10

2.69

CPM MATRIX

JetBlue Critical success factors Human resource Price competitiveness advertising International expansions Client/customer satisfaction Market capitalization Financial position Technology/entertainment services Totals Weight 0.15 0.15 0.20 0.10 0.15 0.10 0.05 0.10 Rating 4 2 4 1 3 4 3 3 Ws 0.6 0.30 0.8 0.10 0.45

Southwest Rating 4 3 4 3 4 Ws 0.60 0.45 0.80 0.30 0.60

American airways Rating 2 3 2 3 3

Ws 0.30 0.45 0.40 0.30 0.45 0.30 0.15 0.20 2.55

0.4 4 0.15 4 0.30 3 3.10

0.40 3 0.20 3 0.30 2 3.65

SWOT MATRIX
STRENGTHS 1. Charging low fares WEAKNESS 1. Employees switching to competitive firms. 2. On time arrivals % is low 3. Limited access to International markets 4. Less profit because of low fares 5. Difficulty in recruiting skilled and trained employees.

2. Rank #1 in customer service

3. Low labor wages 4. New, efficient and reliable planes 5. Management staff is skilled and trained. 6. Better financial position.

OPPORTUNITIES
1. The demand of air travel

SO-STRATEGIES

DDWO-STRATEGIES

increased (SO) 2. Untapped international market 3. Higher fares of other airlines 4. Increasing use of internet can help to reach and facilitate more customers 5. Usage of airlines has been effected badly since 9/11 Find out which airline are hurting by bad law and order situation and try to find out areas and cities which that airline is serving and serve that areas with low fares.(S1,O5) By using strength of better financial condition blue jet can avail opportunity of expanding its flights to different countries.(S6,O2) (WO) Limited access to international market can be overcome by entering foreign markets such as Europe. (W3, O2). Start flying internationally to earn more profits and become more-well known and take business from hurting airlines.(W3,O5)

THREATS
1. Threats of union labor strikes 2. Inflation and rising prices of fuel. 3. Security issues causing customers dissatisfaction. 4. Competitors giving same services at very low prices. 5. Increase in taxes by government.

ST-STRATEGIES

WT-STRATEGIES

(ST) (WT) Better financial position will help to Increase the wages of employees so that they will not go on strike.(S6,T1) Better financial position will help them to reduce the threat of inflation and increasing prices of fuel.(S6,T2) Employees switching to competitive firms can be overcome by increasing the pay according to rising inflation and rising prices.(W1,T2)

BCG MATRIX
Passenger revenue domestic operations in million 2010 Southwest airways American airways Jet blue airways total 11,122 10,059 2870 24051 2011 12582 10514 3385 26481

Industry sales growth= 26481/24051=1.10 Industry sales growth is 10% Airline domestic market share Southwest market leader share= 14.9% American market share= 13.1% Jet blue market share=4.9% Relative market share of jet blue=4.9%/14.9%=0.3288

B.C.G MATRIX OF JET BLUE DOMESTIC OPERATIONS

1.0 .5 .32 0.0

20%

JET BLUE 10%

0%

-20%

ANALYSIS
Jet blue is in the ? stage of the BCG-Matrix. Jet blue can increase its market share by extensive advertising on television and other mass media. It can do market penetration to increase its market share. It can also use market development to snatch the market share from its competitors. It takes time for jet blue to increase its market share because the growth rate is only 10%.

SPACE MATRIX
Financial Strengths (FS)
Variables High gross margin Large amount of working capital High market capitalization Average Total
Rating

+6 +4 +5 +5

Environmental Stability (ES)

Risk involved in business Competitive pressure Price range of competitors -2 -2 -3

Average

-2.33

Total Y-axis score FS + ES= +5 + (-2.33) = +2.67

Competitive Advantage (CA)

Variables Lower fares Superior Customer service Reliable and efficient planes Average Total Ratings -1 -1 -2 -1.33

Industry Strengths (IS)

Growth Potential Profit Potential Financial Stability Average Total Total X-axis score CA + IS = -1.33+3 = +1.67 +4 +3 +2 =+3.0

SPACE MATRIX

F.S

CONSERVATIVE

+6 +5 +4 +3 +2 +1

AGGRESSIVE
JETBLUE AIRWAYS

C.A
-6 -5 -4 -3 -2 -1 -1 -2 -3 -4 +1 +2 +3 +4 +5 +6

I.S

DEFENSIVE

-5 -6

COMPETITIVE
E.S