Transcript

1. Prepared by Roll Number 10735 FawadHussain, 2014 Case Study No 18 Page : 635 Strategic
Management by Michael A Hitt
2. INTRODUCTIO N
3. INTRODUCTION Incorporated in Delaware in August 1998. David Neeleman 1st founder ,February
1999, under the name "NewAir. JetBlue followed other domestic airlines approach of offering low-cost
travel, but sought to distinguish itself by its services, such as in-flight entertainment, TV on every seat and
Satellite radio. CEOs vision To bring humanity back to air travel. JetBlue's founders had set out to call
the airline "Taxi The idea was dropped later.
4. INTRODUCTION The company is headquartered at the Long Island New York. Its main base is John F.
Kennedy International Airport The airline mainly serves destinations in the United States, along with flights
to the Caribbean, The Bahamas, Bermuda, Barbados , Colombia, Costa Rica, the Dominican Republic,
Jamaica, Mexico and Puerto Rico.
5. VISION
6. Mission Statement Jet Blues mission is to be the leading low-fare, low-cost passenger airline offering high
quality customer service to underserved markets and customer who are looking for the best value in their
flight. We have the newest most advanced planes that are reliable, fuel efficient, utilizes paperless cockpit
technology, live in-flight satellite TV and security cameras. Our philosophy is to give customers the best price
value for their ticket, offering things our competitors dont offer. At JetBlue we feel that hiring educated
employees that are highly motivated and well trained will provide a better experience to the customers. We
feel that our high-value, high quality service philosophy will lead the way to our becoming the number one in
the industry.
7. CORE Values Safety First & always in the business Relations with Customer & Crew Exhibit a Sense of
Humor Achievement Orientation & Striving Organizational Commitment, & honesty
8. Core Values SAFETY: Airline commits to "Safety First; Set and Maintain Consistently High Standards;
Ensure the Security of Crewmembers and Customers; Never Compromise Safety CARING: Maintain
Respectful Relationships with Crewmembers and Customers; Strive to be a Role model; Healthy Balance
Between Work and Family; Responsibility for Personal and Company Growth INTEGRITY: Demonstrate
Honesty, Trust and Mutual Respect; Never Compromise the Values for Short-Term Results; Possess and
Demonstrate Broad Business Knowledge; Commit to Self Improvement. FUN: Exhibit a Sense of Humor ;
Add Personality to the Customer xperience; Demonstrate Enthusiasm for the Job; Seek to Convert a
Negative Situation into a Positive Create a Friendly Environment.PASSION: Strive to Meet the Needs of
Crewmembers and Customers; Team Spirit; Deliver Superior Performance;; Look for Innovative Solutions to
Business Issues
9. Innovative Strategies No meals during flights Providing personal television Leather seats instead of
cloth seats Use of new aircrafts Use of more fuel-efficient and less maintenance cost Airbus Initially less
routes Point-to-point flight
10. Innovative Strategies Use of secondary airports which did not handle too much traffic Reduction in the
Turnaround time by efficient ground staff Use of electronic ticketing Paperless cockpit and use of emanuals by crew Customer-oriented approach Picking the right people Created fun
11. Annual profit of US$ 55, 103Annual operating revenues increased in 2003 and 2004 In April 2002
JetBlue announced its IPO of 5.86 million shares of CS at price US$27 per share Also won best airline
award in 2002 Won 2002 Air Transport World Market Development Award More spending on providing
quality services Airlines lost millions in revenue after 9 / 11 but Jetblue made profit and increased network

by adding 6 more destinations Expansion continued 18 consecutive quarters of profit Rapid growth
Growth Era 2000-04 & 46 million in 2002 -2004 respectively
12. Loss suffered due to Rapid increase in fuel price Political situation and war Heavy Interest
expenseAirline suffered loss of US$ 42 million in CS too Operating revenue continued to increase in 2005
and 2006 but airline suffered losses Slow Growth & Cutting of destinations was done to preserve cashBy
end 2006 JetBlue slowed down growth by delaying deliveries of aircrafts, eliminating low profit routes and
cutoff destinations from 75 to 47 repayment of debt & JetBlue Strategy in Slow Growth Airline created
Jetblue Customer Bill of Rights Cross training of crew members Waived change fee Waived fare
differences Improved reservation system Streamlined costsJetblue came under strong criticism due to
delay of flights in February 2007 remain stable
13. Competitive Advantage JetBlue has a competitive advantage over its competitors. It entered into the
market offering prices that were low. In addition, it offered luxuries such as leather seats and satellite
televisions on the back of all the seats on the plane. These luxuries were not offered by competitors at the
low prices that JetBlue was offering, not even Southwest, and offered value for consumers that were rare.
While these services can be imitated, it would be very costly to do so. Airlines would not only have to
purchase planes that were comparable to JetBlues and with the low airfare cost JetBlue was offering,
competitors were already having difficulty competing without additional costs. JetBlue, in order to continue
growth, decided to enter into the new market of short-haul flights that it did not currently offer. To do this it
purchased the E190 which operated at a consumption 34 % less than the typical jet. This put competitors at
an even greater disadvantage.
14. Other Competitors Spirit Airlines Virgin America America West Southwest Airlines Frontier Airlines Sun
Country Airline Delta United Airlines
15. High maintenance costs Fleet now aging Shifting customers need Concentration on middle class
Two types of aircrafts Relative new company Advertisement Weakness Effective use of technology
Consumer satisfaction Two types of aircrafts in the fleet Efficient employees Strong brand Low
Operating cost Strength SWOT Analysis
16. Route Industry expansion SWOT Analysis Opportunity & Pay / Benefit packages increasing
Incidents like 9/11 Global crisis Strong Competition Increase in fuel price Security issues
Deregulation of international air travel Threat Technological Creation of Airlines Alliances fleet
expansion
17. Market Positioning Price Low High QualityLow Southwest American Airlines United Airlines Delta
Frontier AirTran JetBlue Position Map
18. NEW VISION 2007 Onwards HIGH end customer services at LOW end prices
19. Sold a stake of its shares to Germen carrier Lufthansa to increase revenue Develop a new terminal at
JFK airport to improve its on-time departure and arrival averages at airports. US$80 million invested Pre
assigned seating and ticketless travel was made possible Booking agents could work from home
Customers benefited from simple to use reservation system Offered pre flight and during flight free
snacks and optional lunch / dinner on payment Work on improving image of airline as superior customer
service provider Additional Strategies Past 2007 & Double points for true blue membersSingle class
travel for all passengers Crew wakes up the customer from sleep All passengers provided with comfort kit
for a healthy sleep 100% non-fat selection of complementary and unlimited snacks Additional 2 inches of
leg room Customer advisory council was established Comfort in Flight allow the customers to book code
share flights
20. Changed atmosphere of airline to build reputation as a great place to work by giving incentives to staff
and confidence building measuresSingle class travel helped to reduce operation and maintenance costs
Increased efficiency of ground staff to decrease turn around time for aircraft Reservations from home
using VOIP technology First among American Carriers for least number of lost or mishandled baggage.
JetBlue's maximum liability for lost or damaged baggage is $2,800 per passenger 99.6% operations
completion rate Gains By JetBlue

21. Cell booking application launched Promotions such as sale on some of the selected destinations.
Installed security cameras in passenger cabin for customer and crew safety. Installed bullet-proof cockpit
doors across its fleet. Cancellation credits are transferable and valid for one year. Free same-day standby
travel. If theres an empty seat on an earlier flight, its yours. Double points for true blue members.
JetBlue has one of the finest features in the airline industry. It also stands out from its competitor by
providing other facilities as follows: Competitive Advantages & JetBlue's maximum liability for lost or
damaged baggage is $2,800 per passenger. Allows animals in flight if they are trained. JetBlue offers 5
choices of meal boxes for a price of $6 a box It gives travel managers comprehensive online reporting tools
to track employee spending, itineraries and flight credits. hourly update on our flight schedule.
22. New Slogan
23. JetBlue Valued Services
24. Unique trainingMajor maintenance issues Two types of aircrafts having different characteristics New
Challenges Ahead & A,CIncreased maintenance expenses integration required by the crew &Seniority
attained by staff and crewStaff growth will increase payroll expenses Payroll costs will increase with aging
Expansion in the fleet = More costsEngine Overhaul costs US$1.5 million D type maintenance required

1. L/O/G/O Case Study: JetBlue Airways: Starting From Scratch Syndicate 5 Muhammad Ridwan
29112555 Machadi Dhana 29112303 Mahammad Khadafi 29112324 Pedro Putu Wirya 29112565
Seto Kusparyanti 29112306 Yuliani Dewi Risanti 29112321 Rahdianto Maulana 29112554
2. JetBlue: Background Established in 1998 and started service in 2000 Goal: to establish itself as a
leading low-fare, low-cost passenger airline by offering high quality cutomer service and differentiated
products Focus on underserved markets
3. JetBlue: Background Initial capital: $130 million from several investors. Initial operations: 2 planes Top
management levels consisted of talented and reputable veterans, who would like to "create something new,
unencumbered and fun. 0.6 complaints per 100,000 passengers compared to an average of 2.99 for
competitors
4. Case Formulation JetBlue was getting bigger everyday: The fleet grew from 2 to 10 within 11 months
Employees grew from 10 to almost 1000, with additional 100 for each new plane In 2003, JetBlue shall had
40 planes and 5000 employees How did JetBlue achieve rapid growth while building a value-based, high
commitment organizational culture?
5. JetBlue Profile Product: flight service Primary Hub: JFK International Airport New York City Aircraft:
Airbus 320 Working environment: non-union
6. JetBlue Profile Business Strategy: Aggresive growth strategy, one new plane was bought every five
weeks Low cost carrier approcah
7. JetBlue Profile Functional Strategy: Marketing strategy: Segmentation: medium - low Targeting:
people who previously would not go by plane Positioning: low cost carrier Customer friendly
8. JetBlue Profile Functional Strategy: Operation strategy: Aircraft model, Airbus 320: Burns less fuel
Better and wider cabin technology Each seat get an extra inch, relative to Boeing 737 Paperless Single
flight service Full entertainment flight service
9. JetBlue Profile Functional Strategy: Human capital strategy: Customized employment package
Selecting the right people based on corporate value Keep small company feeling inside the organization
5 values: safety, caring, integrity, fun, passion No labor union
10. Industry Competitiveness For low fare flight services, JetBlue face competitions with: Southwest
Airlines; biggest competitors America West Midwest Express AirTran Midway Frontier

11. Case Analysis JetBlue Performance Organizational Capability Organizational Culture Human capital
management of JetBlue must develop its employees to create organizational culture, alligning with its
business strategy Business Strategy Safety Caring Integrity Fun Passion Aggressive growth strategy
12. Case Analysis CO Safety CSO IU Caring OA OC Integrity SCT Fun ACH TW Passion Core competence
integrated in JetBlues values
13. Conclusion The key success of JetBlue was the focus to shared corporate values, which drove all
activities and were the basis for the development of the organization. To sustain corporate values, core
competence integrated in the values must be defined and maintained.