Dr. Elile Awa
CRAFTING AND EXECUTING STRATEGY
Submitted by: John-Miguel Onkony
Winter Quarter 2011
This document presents an analysis of one case presented in the textbook (Thompson, A.A., ...view middle of the document...
The company intends to do so by offering low fares that stimulate market demand while maintaining a continuous focus on cost−containment and operating efficiencies.
JetBlue intends to follow a controlled growth plan designed to take advantage of its competitive strengths. The company’s growth will continue to occur by adding additional frequencies on existing routes, connecting new city pairs among the destinations they already serve, and entering new markets often served by higher−cost, higher−fare airlines.
The key elements of JetBlue strategy are: stimulate demand with low fares, emphasize low operating costs, and offer point−to−point flights to underserved and/or overpriced markets, and differentiate product and service. Jet Blue focused on marketing that established a tone, and let others discover its personality, which is manifest through its on-board televisions, remarkably friendly staff, easy-to navigate reservation system and frequently lower prices. Word about JetBlue started spreading, making it very popular very quickly.
JetBlue’s Financial Objectives and its Results in Achieving this Objective
Jet Blue remains committed to maintaining a strong balance sheet as the company grows its airline. To that end, its liquidity position remains solid. Key to balance sheet stability is of course, profitability. As the world faces what appears to be the ‘‘new normal’’ for record-high fuel prices the company knows there are many challenges to overcome. And even though JetBlue’s operating margin is higher than most other major airlines in the United States it simply was not where it would like it to be.
The company has committed itself as a company to return to profitability and intend to do everything it can to achieve this goal as quickly as possible. An important factor in this commitment is advancing the revenue management to the next level. An increased internal focus on implementing a combination of higher average fares, improved capacity alignment and diversification into new markets will assist the company in its goal to enhance its revenue performance.
Jet Blue continues to look for opportunities to diversify into higher-yielding markets and is shifting its focus to short and medium haul cities where decreased competition, especially from bankrupt competitors, will allow them to command a revenue premium. Unfortunately, despite its early promise and strong organizational structure, JetBlue did not deliver value to its stockholders over the five-year period ending December 31, 2007.
Strategic Elements of Cost, Organizational Culture, Human Resources Practices and Evaluate their Competitive Advantage.
The following section will analyze the strategic elements of cost, the organizational culture, the human resources practices and their competitive advantage.
Strategic Elements of Cost
JetBlue adopted a strategy for effective...