Jetblue Airways: Can It Survive in a Turbulent Industry Essay Example

way of reducing the cost, and consequently, a way to fulfill its mission.

Furthermore the customer service representatives now can work from their homes which is another cost saving method. E. A decrease in economy leads to decrease in travel – business and personal.This results in unused capacity and stronger competition. Therefore it might be difficult for the smaller companies to survive.

Another factor that influence the industry are the interest rate changes that have an impact over the cost of operations. P. Airlines are subject to extensive regulatory and legal requirements issued by The Department of Transportation and The Federal Aviation Administration. The industry has to comply with laws and regulations not only domestically but also internationally which requires significant spending.After 9/11, many new security measures have been put into practice, resulting in expenditures for equipment, training the personnel, federal and airport charges, security taxes and etc.

3. Brief analysis of Porter's Five Forces as they pertain to JetBlue Competitive rivalry: Airline industry can be characterized as imperfect oligopoly. There are several big airlines that dominate in long-distance flights and several smaller airlines compete for short-distance flights. The competition and price sensitive buyers lower the returns airlines receive.This market situation is favorable for a company like JetBlue, which differentiated itself by comfort at low price, but this can be easily duplicated by other companies.

Bargaining power of customers: In airline industry the bargaining power of the customers is low to medium, because the buyers are not concentrated; there is no threat of backward integration. Furthermore, in the case of long distance flights, customers have little or none bargaining power, because there is no other

option in regards of flights between US and Europe for example.From the other prospective, the technology gives buyers ability to compare prices and with no switching costs they can chose the lowest fair. This is where JetBlue has advantage with its low-cost strategy. Bargaining power of suppliers: The bargaining power of suppliers is high because there are only two major suppliers- Boeing and Airbus. This makes it difficult for the companies to obtain lower prices.

There is no threat of forward integration. The higher degree of suppliers’ power reduces the ability to earn high profits, thus reducing the number of smaller airlines such as JetBlue.Threat of new entrants: There are high barriers for new entrants on this market, because of difficulties with obtaining the hubs, creating strong brand identity and obtaining a starting capital. Despite that there is a threat of new companies to enter as JetBlue competitors, because the factors that differentiate the company are easy to copy or imitate.

Treat of substitute products: For shorter distances there are several substitutes to air travel (car, train, bus) but with long distance travel, plains are the only reasonable way of travel. . Brief SWOT (strengths, weaknesses, opportunities, threats) analysis. Low cost Unique company-employees relationship High employee efficiency Superior customer service Safety Not enough influence in the airline industry Doesn’t have access to some major routes The differentiating factors are easy to imitate Expand at a good speed and still maintain profitability Expand slow, face stagnation and being acquired by rivals Expand fast and loose the company identity 5. An evaluation of the mission/vision of the organization.The JetBlue has a unique direction.

It wants to provide

low price and good experience to its clients unlike other low-cost companies where customers get lower prices at the expense of quality and bad customer service. JetBlue found a way to be different from the competition and is perusing its goal very effectively. 6. An overall assessment of the strategic future of the organization to include your judgment on the best strategy to be used in the future. JetBlue is using a combination of low-cost strategy and differentiation.

They contribute for JetBlue’s competitive advantage. The first one is achieved by the efficient operations: new plains, no meals served, reservation agents working from home all are the ways to reduce cost. Nevertheless, this strategy is easy to imitate. In order to succeed in market, JetBlue uses other component of its strategy- differentiation.

It is achieved by adding “joy” for the customers such as superior customer service, more leg room and Direct TV. The combination of strategies is effective and gives JetBlue an opportunity to fulfill its mission.This is good strategy which will help continue the success. 7. Why? … to your response to f.

The low-cost strategy pared with the superior service and the “joy” provided during flights is a large part of JetBlue identity. If the company abandons the low-cost, it will not be able to compete with the other big airlines. If JetBlue keep only the low-cost but abandon the good service provided, it will not be able to differentiate itself from the other low-cost competitors entering the market.