The company is headquartered in the Forest Hills vicinity of the Queens country of New York City. The primary base of operations for JetBlue is at New York ‘s JFK International Airport which gives the steadfast entree to the largest market in the New York metropolitan country. JFK has purchased existent estate to let for possible hereafter enlargement which was a major ground why JetBlue choose to come in into a 30-year rental for the building of a new terminus that will let for a major addition in the figure of flights available.
In 2001, JetBlue started opening up focal point operations in high traffic countries all over the U.S. some include: Long Beach, California and Logan International Airport, Boston which opened in 2004. Other of import hubs for JetBlue would include: Oakland International Airport, Orlando International Airport, Fort Lauderdale, and Washington-Dulles. JetBlue is known for their finishs in the United States, but they besides have flights that go to the Caribbean, the Bahamas, Bermuda, and Mexico.
In 2005, JetBlue became one of the major U.S. air hoses ; this rise was the fastest move in the history of the air hose industry. At the terminal of 2006, JetBlue was ranked the 8th largest rider air hose in the U.S. based on their grosss per stat mi. Following the September 11, 2001 onslaughts JetBlue was one of merely a few U.S. air hoses that made a net income during the ruin of air hose travel.
The cardinal individual involved and dedicated to JetBlue ‘s success is David Neeleman the laminitis and CEO. His chief end is to make an gratifying winging experience unlike any other air hose. David has been able to make this by winging with his clients and inquiring them what JetBlue could make to do their winging experience more gratifying. Over the old ages he has implemented some really alone options that you may non be able to happen with any other air hose. Some of these points include: more legroom, trade name name drinks and bites, complementary watering place merchandises, and personal Television screens for every client with FOX films and XM wireless. These points will be talked about more in the latter portion of this paper. David has been implementing merchandises that clients will maintain coming back for every bit long as JetBlue stays one measure in front of their rivals.
Section 2 Strategic Mission
Jet Blue stresses five nucleus values by which they operate. These values of safety, caring, unity, merriment, and passion are their mission aims which are clearly stated on their web site.
“ Safety: We commit to “ Safety First ” ; Comply with all Regulatory Agencies ; Set and Maintain Consistently High Standards ; Guarantee the Security of Crewmembers and Customers ; Never Compromise Safety.
Lovingness: Maintain Respectful Relationships with Crewmembers and Customers ; Strive to be a Role Model at Work and in the Community ; Embrace a Healthy Balance Between Work and Family ; Take Responsibility for Personal and Company Growth.
Integrity: Demonstrate Honesty, Trust and Mutual Respect ; Give the JetBlue Values a “ Heartbeat ” ; Never Compromise the Values for Short-Term Results ; Possess and Demonstrate Broad Business Knowledge ; Commit to Self Improvement.
Fun: Exhibit a Sense of Humor and the Ability to Laugh at Self ; Add Personality to the Customer Experience ; Demonstrate and Create Enthusiasm for the Job ; Seek to Convert a Negative Situation into a Positive Customer Experience ; Create a Friendly Environment Where Taking Risks is Okay.
Passion: Strive to Meet the Diverse Needs of Crewmembers and Customers ; Champion Team Spirit ; Crave and Deliver Superior Performance ; Enjoy Get the better ofing Barriers to Good Service ; Look for Innovative Solutions to Business Issues. ”
The nine elements of a good mission statement contain information on: Customers, Product/Services, Markets, Technology, Concerns for endurance and growing, Philosophy, Self-Concept, Concerns for public image, and Concerns for employees. Throughout Jet Blue ‘s ‘five nucleus values ‘ they stress the importance of their client ‘s safety, merriment, and the value offered to them. They are seeking clients that are looking for value with a merriment atmosphere. The company states that through its services, it will make a alone flight experience that will be valued by its clients. Harmonizing to their mission statement, apparently the market they are seeking to touch in is for people that are looking for a alone and fun experience from a company that cares about them and their demands. Technology is non truly mentioned within their mission statement. Growth and concern for endurance is non truly mentioned in their mission statement, but this can be assumed for every concern. These nucleus values stress the doctrine of their concern. They want to appeal to people that are looking for a dedicated company that looks out for the demands of their clients, all the piece supplying a alone and fun flight experience. Jet Blue ‘s self-concept is they want to go concerned with what the client wants and to present a passion in every facet of their occupation to their clients to guarantee their delectation. Their nucleus values exhibit a big concern to maintain a good repute and a good public image. Through their safety, passion, and caring values, they show utmost concern for their employees, doing this mission statement more than adequate for its industry and sensed ends. Without your client and employee base, a concern has nil. Valuing client and employee relationships is highly of import for a successful house, and JetBlue has noticed this.
Section 3 External Analysis
JetBlue competes in the air hose industry, specifically within the price reduction air hose industry. The air hose industry has seen difficult times in the last few old ages, apparently since September 11, 2001. Problems lie in higher oil monetary values, stricter flight and security ordinances, and increased costs. An external analysis of this industry can be done utilizing Porter ‘s Five Forces of Competition.
Rivalry among houses within the air hose industry is ferocious. JetBlue merely has one concern section, winging, and hence they merely compete on one concern forepart. There are legion rivals that are all contending for clients. JetBlue tries to vie based on focussed cost-leadership. That is, they offer flights in merely certain topographic points are a discount-airliner who tries viing on monetary value. They merely fly to and from certain finishs and seek to streamline their flights to offer cheaper menus to clients. Other houses have besides mimicked this scheme that Southwest developed. These houses include Sun Country Airlines, US Airways, Virgin America, travel! , Frontier Airlines, and Spirit Airlines. JetBlue focuses on picking finishs that it thinks it can hold a competitory advantage in. Increased oil costs and other costs for air hoses have led to smaller net income borders, farther increasing the competition among viing air hoses.
Peoples who want to wing hold a medium sum of dickering power. If you break the client base into two parts you have people who fly for leisure and people who fly for concern. Leisure travellers have a batch of dickering power with air hoses. They can pick where they want to wing from, where to, whether to wing at all, when to wing ; and hence are sensitive to monetary value. If the cost additions excessively much, leisure travellers merely wo n’t wing. Business travellers have much less dickering power. Often they are on clip restraints, location restraints, be aftering restraints, and these travellers have much less dickering power with the air hoses.
Suppliers to air hoses besides have a batch of dickering power. There are merely ~8 commercial airliner makers in the universe. Airlines need aeroplanes, and the cost of these new planes is dictated by the smaller figure of providers. Other providers include oil and gas providers. These providers have a batch of dickering power as good. The lone manner air hoses can acquire any sort of upper manus here is by come ining into future contracts to fudge against additions in oil and gas monetary values. While most air hoses do this, it merely hedges against monetary value additions for so long. Once the contracts are up, they are vulnerable. Airports, landing fields, and airdrome Gatess, and labour brotherhoods are besides “ supplies ” that these air hoses need. These are some of the most powerful providers. In some instances, air hoses own an airdrome and can bear down really high monetary values to viing air hoses for usage of Gatess. Other providers have less bargaining power, like nutrient and drink providers and others.
There is a easy increasing menace of replacement merchandises for winging. As autos become more efficient, it may be much less expensive to drive to finishs in the hereafter. Peoples are progressively dying about winging after events like 9/11 and would instead drive or go in a manner alternate to winging. Besides deriving in popularity is people exceling air hoses and winging other ways. Examples include having personal jets or planes, timeshares in hired jets, renting jets for trips, etc. Possibly even further on the skyline is “ winging autos ” . Other replacement merchandises to winging include travel by train and coach. If the cost of winging gets excessively high, people have options.
The menace of new entrants is average to low. While there are barriers to entry ( High Cost of aeroplanes, airdrome Gatess, acquiring started, etc. ) that maintain this menace lower, if involvement rates are low and planes can be purchased “ cheaply ” , new entrants will and hold entered the industry. Another option is for air hoses to rent planes which lower the barriers to entry. There have been legion new entrants into the industry in the last decennary, and while many have failed to be successful or even go on operations, this could alter if the industry becomes progressively profitable. Possibly the most interesting thing to observe is how even though air hoses have had tough times, with many air hoses presently runing under bankruptcy protection, there have been new entrants.
Given this analysis of the industry, we feel that is non a good environment to do big net incomes in. None of the five forces portray a positive visible radiation for the industry. Despite all these jobs and challenges the industry faces, there is chance if an air hose could turn much larger than its rivals and go the “ standard ” in the air hose industry. If one air hose could distinguish itself or streamline its concern even more so than current price reduction air hoses and offer even cheaper flights, they could see immense success.
Section 4: Internal Analysis
JetBlue has a broad scope of resources that make them a really attractive company. In looking at costs you would happen their flights at low sensible rates along with regular trades to let you to go at an even lower cost. When winging with an air hose a rider may anticipate to acquire served a bite and imbibe but nil name trade name. However, with JetBlue their flights contain Dunkin ‘ Donuts java and Terra Blue french friess to give their clients a more hearty drive, Ohio and do n’t bury to inquire for seconds.
JetBlue has been working difficult to do comfort an of import portion of their flights. With their increased leg room of 36 inches of infinite in manager many clients would be pleased to sit with JetBlue. Along with the addition leg room they have besides upgraded to nice plush leather seats. So non merely are you winging at a low cost but besides in comfort. By teaming up with Bliss Spa, JetBlue has increased comfort even more by adding comforting watering place merchandises to assist you loosen up while winging with them.
What is relaxation with out some music or films, JetBlue offers XM Satellite wireless to every client every bit good as their ain Television screen at each place. Some flights offer films but JetBlue has expanded to offer non merely Fox in flight films but besides 36 telecasting channels so you wo n’t lose your favourite show while in flight. But most of these fringe benefits are touchable and can be copied by a assortment of air hoses. However the cost to implement all of these resources could be really dearly-won on a company unless they are based on contracts that make copying hard.
Despite the attractive force of these added luxuries it does n’t give the company a competitory advantage. Possibly in the current market for a short clip but these resources are traveling to get down going an of import trade good in merely a affair of old ages. With the recent jobs this company had they may non be able to retain clients even with these added fringe benefit. However their new Customer Bill of Rights may assist to maintain JetBlue an attractive company.
In looking at some of JetBlue ‘s more intangible resources we find some competitory advantages that might assist them over their rivals. Employee satisfaction is really of import to JetBlue. They offer limitless standby flights to all employees and their households every bit good as important others. Besides alternatively of acquiring a set sum of holiday, ill or holiday clip, JetBlue pools all their clip off into a bank designated as paid clip off.
JetBlue has taken their client service really earnestly particularly over the past month. Due to the recent jobs in New York, JetBlue has had to up their client service in order to run into the demand. The CEO David Neeleman makes it his personal duty to wing each hebdomad on JetBlue and speak to clients what could be improved with the air hose. He is doing it his personal duty to guarantee that clients are happy and seeking to happen new ways of doing the flights more relaxing.
The VRIN theoretical account shown below allows us to see that JetBlue is merely capable of making mean to above mean returns. This is determined by looking at some cardinal resources the company has and ranking them based on importance. First we looked at client service since that is a really of import resource to JetBlue. We found that even thought their client service was good, JetBlue did n’t hold adequate people in that section and when a big job presented itself they were overloaded. Besides client service would be reasonably easy for another company to come in and double so this resulted in merely an mean return. We besides looked at employees working for JetBlue and found that they are a really important facet of the house. It might be possible to seek to copy but it would come at a high cost to develop these employees so in looking at the employees we felt that they would return an above norm return for JetBlue.
We determined that direct travel would be an of import resource since a batch of clients find it a much better manner of winging. However, because Southwest has this sort of system set up and other smaller companies are seeking the same thing we found that this was non a strong resource to trust on. But in looking at the relaxing services offered on flights we found this to be a extremely profitable country for JetBlue. The lone job with trusting on this country is the fact that other air hoses may come along and happen replacement merchandises that might lure clients so JetBlue needs to maintain up on their in-flight services to remain in front of the competition. Another of import resource is the Leadership of the CEO ; we think that without Mr. Neeleman this company would non be the same. It is thought his difficult work and dedication to this company that has allowed JetBlue to go the successful company they are today. All of these resources together have led JetBlue to above norm returns, nevertheless if they intend on remaining above norm they will necessitate to implement some more competitory advantages into their house.
Is the Resource or Capability Valuable?
Is the Resource or Capability Rare?
Is the Resource or Capability Costly to Imitate?
Is the Resource or Capability
Average to Above Average
Section 5 Problem
Within Jet Blue ‘s new hub at JFK Airport in New York, a Valentines Day ramp left more than 250 flights canceled that costed them a jutting value of $ 20- $ 30 million. An external jar from the external environment showed a job within the company ‘s current program, and that job is their inability to supply client value when covering with major unanticipated holds. Jet Blue has figured out a new plan-of-action to maintain a similar dearly-won incident such as this from go oning once more. On February 20th, 2007 Jet Blue announced their new plan of promises and compensation for their clients called “ The JetBlue Customer Bill of Rights ” . This program outlines in item what Jet Blue plans to make to suit clients should any holds or cancellations occur. With compensation runing from little per centum ticket verifiers to full unit of ammunition trip verifiers depending on the sum of clip that the hold runs. This scheme could still be dearly-won if Jet Blue experiences another incident similar to what happened at JFK, but it will be far less if this program is instituted. The program besides calls for the cross-training of employees so that there are secondary duties that can assist ease detain times if needed. Besides under this client measure of rights Jet Blue will increase the functionality of their web site every bit good as communicating in airdromes so that information is easier to achieve for staff members and clients. The most of import point to be gleaned from this measure of rights is that Jet Blue expects that these holds will happen. If holds were minimum to none so there would be no demand for the verifier system to be instituted and clients would remain loyal because of the outstanding service. Customers can experience safer that they will be compensated should a hold happen but the fact that Jet Blue has this luxuriant compensation program while other air hoses do non could convey clients do to worry. Jet Blue has solved the job of counterbalancing clients should a hold occur but they have brought to illume the impression that these holds happen more on a regular basis with their air hose more than others.
Section 6: Business-Level Strategy Analysis
It is highly of import to carry on a concern degree scheme analysis on a house to hold on an thought of how a company perceives its internal and external relationships and the specific plans-of-actions the said company uses to make above norm returns. The house uses an incorporate and co-ordinated set of committednesss and actions to derive a competitory advantage by working its nucleus competences in a specific merchandise market. A business-level scheme centres on the clients served by a house. A scheme stresses precisely who will be served, which needs the targeted clients have that demand to be satisfied, and how these demands will finally be fulfilled. Answering these inquiries will give a better apprehension of the house and its customer/market base.
Jet Blue Airline ‘s targeted client is person who seeks low-cost flights and/or is a frequent circular. Either type of client saves a great trade of money because they take advantage of Jet Blue ‘s inexpensive ticket monetary values to 51 finishs. Recently Jet Blue has been named ‘Best Low Cost/No Frills Airline ‘ by OAG for the 2nd twelvemonth in a row. Everyone is ever looking to salvage money and Jet Blue does this by full-filling those demands and more. The company seeks clients that are looking for ace client service. Jet Blue offers the first and merely Customer Bill of Rights within the air hose industry. This exhibits a plan that offers compensation for clients inconvenienced by flight holds or cancellations. The company besides provides trade name name bites and drinks to its clients, every bit good as provides them with un-matched amusement within the low-priced flight industry. DirectTV, XM wireless, and Fox in-flight films add to client value. All of these services are offered to their clients to fulfill their demands, every bit good as attention deficit disorder alone value to flights that other companies can non fit.
The business-level scheme that Jet Blue uses is that of an incorporate cost leadership/differentiation scheme. To the client, this ultimately offers low-cost, differentiated merchandises and services. The company must concentrate on the demands of its nucleus client group in order to be successful with this type of concern scheme. Jet Blue ‘s success comes from its low-prices, alone value from the services it offers, and its first-class client service plan. They build their concern around the client, and offer solutions to their demands and wants. They strive to convey to their clients a safe, fun flight experience full of alone valuable services that is supported by an honorable staff.
Jet Blue seems to hold a sensible scheme, but must be better aware of the external environment. The ground for the Valentine ‘s Day job was a consequence of the conditions. However, all other air hose companies must cover with the same exact job of foretelling the conditions. If they are more cognizant and can do better anticipations of what is traveling to go on, they can break implement a program and calculate the best class of action. Jet Blue took a alone attack to the solution of this job and centered even more upon their clients. They now offer client compensation for canceled or delayed flights. So because of their inclinations to concentrate on the felicity of their clients, they relished from their job by and large unharmed.
Section 7 Solution
To foremost deduce a solution, one must first retrieve what the job is. In our instance the job included how JetBlue treated clients and the organisational jobs they encountered in covering with holds and cancellations due to endure. The job was compounded by impacting JetBlue flights all around the state that relied on planes that were grounded in the Northeast. As riders were sitting in airdromes for hours, sitting in hot planes with no nutrient or drink for hours, and their agendas and lives got disrupted ; JetBlue needs to look at how they can avoid or restrict these jobs in the hereafter. This is where we come in.
First, they need to make a better occupation of following conditions forms. If major storms are predicted, they need to come up with a better system of recognizing there is a higher chance that their flights will be cancelled anyways. The Oklahoman they can call off flights that are traveling to be necessarily cancelled, the more clip they have and more cost nest eggs can ensue.
Second, they need to hold a better system for forming and informing everyone involved with each flight. This includes riders, pilots, crews, flight attenders, the airdromes, and everyone at their corporate office. Possibly they should make a particular squad or unit that ‘s exclusive intent is covering with this forming. Equally shortly as they cancel flights or hold flights, they need to inform all the people mentioned antecedently. Once everyone is informed, they need to take the following action.
Third, they need to hold a set program for what to make when flights are finally delayed or canceled. They need to make this so a break at one topographic point does non impact the full fleet of flights around the state. If they know that there is a major storm system nearing New York City, and they have a big part of their fleet of planes stationed at that place ; they need to wing them out so they are n’t stranded and short planes for other flights. They besides need to hold a program for what they are traveling to make for the riders whose flights were cancelled. Reimbursement, a rescheduled flight, a individual plane that is waiting for the conditions to unclutter up ; they need a list of options riders can take from. If none of those work, they need a system to assist those riders find alternate beginnings of transit to their finish for those riders in dire demand.
Fourth, they need an exigency program for when things go incorrect despite all their planning and prediction. They need a set program for many common state of affairss that have occurred to them late. What to make when people ARE stuck on the plane and the plane merely can non return to the gate. Possibly they need a fleet of new waves or coachs at their major airdromes that are able to take riders off those planes and back to Gatess. Possibly they need to buttonhole to airdromes to supply this service for all air hoses. Another exigency, what to make when people are stuck in airdromes because of unanticipated events that are detaining flights? Here they need to make what they can. They need to offer more than other air hoses are. Maybe bottles of H2O, bites, reading stuff, flight attenders who can beguile and entertain crowds, they need something.
Section 8 Plan for Implementation over following 5 old ages
The terminal end for them in this instance is to recover consumer assurance, turn their concern and increase the figure of riders they service, farther differentiate themselves from their rivals, and happen more ways to salvage on costs ( particularly 1s that are unanticipated or non planned for ) . For JetBlue, some of these things need to go on really shortly and can non go on over 5 old ages. If they wait excessively long for some of these alterations to be made, they could lose a batch of clients.
The first thing JetBlue needs to make is recover consumer assurance and make it fast. Their name is tainted right now when it comes to the air hose industry. They have taken initial stairss for this. The first thing they did was to offer a public apology from the laminitis and CEO, David Neeleman. They besides did what they could for those riders who were so inconvenienced when this crisis happened in mid-February. They offered verifiers, refunds, and apologies. They have besides adopted a Customer Bill of Rights. The Bill of Rights can be seen in Appendix 1. They truly need to avoid any negative promotion and do what they can to acquire good promotion. They should do commercials to air on telecasting to indicate out to consumers all the things they have done to cover with the issues, talk about farther alterations that will be made, and tell consumers why they should wing JetBlue. They should even see a promotional period. Whether it is low-priced flights, upgraded repasts, free intoxicant on flights, etc. ; they need to acquire more people on JetBlue flights to demo them that JetBlue is a great manner to wing. They need to acquire people to bury about the jobs they encountered and the negative images and replace that with, “ Wow, I am traveling to wing JetBlue all the clip. ”
Over the following 5 old ages, JetBlue needs to happen ways to take down costs. The disbursals that truly ache them and we are focused on are the 1s that are evitable. Particularly now, when they have to reimburse clients for holds and cancellations ; these are costs that can be limited by better prediction and planning. Other thoughts include a possible perpendicular integrating for some of their services that they presently outsource. Our thought is to get or develop the concern of nutrient and drinks for flight riders. This is a immense cost to air hoses that could ensue in bottom line growing if it could be limited. They could even look at developing this concern into 1 that they provide service to other air hoses.
To farther differentiate themselves, JetBlue needs to force things they already do, make some of the things we mentioned antecedently, and possibly come up with some more “ little things ” that riders will appreciate. JetBlue tries to truly do their concern simple. This can be seen from their web site. Booking a flight with JetBlue is much less complicated than with any other air hose. One rate and the cheapest topographic point to happen it is the JetBlue web site, bottom line. That is even simpler than Southwest, who offers a figure of different confounding menus and whose web site is slightly difficult to voyage. They need to force the things they offer on flights that other air hoses do non: DirecTV for each single rider to watch what they want, XM Radio, Dunkin ‘ Doughnuts Coffee, in-flight films, free radio cyberspace in major airdromes, etc. Other things they could make include offering specialised nutrient and drink options. This could be done even better if they had their ain division that handled this concern. They could besides purchase planes that have upgraded bathrooms or more legroom for every rider, etc.
We think making these things would pull more clients and consequence in turning the company without making much else. Other things JetBlue could make to turn would be increasing the figure of finishs they offer from already bing going metropoliss. They could besides look at winging into a limited figure of foreign finishs.