The reduction of fixed costs has been made up of the following strategies: • Use of older leased aircraft in place of buying or leasing new aircraft. The Boeing 737 medium haul jet has been selected as standard to reduce maintenance costs, crew training costs and reduce spares inventory. This is also a measure of Economy of Scale according to Besanko. These planes were reconfigured with non-reclining seats to increase capacity. • Flying to smaller airports near the major European cities and using a point-to-point service model rather than the major airlines’ model of hub and spoke through major airports.
Because of the strategic alliance with Embraer, JetBlue played a significant role in designing the interior of the aircraft to improve passenger comfort, a key component of their differentiation strategy. This led to the introduction of the Embraer E190. Unfortunately, the reality of the situation turned out to be much different than what JetBlue had anticipated. The process of adding a new fleet of aircraft was wrought with complications, and coupled with the disastrous Valentine’s Day fiasco JetBlue must rethink the new strategy they had undertaken. SOLUTION STATEMENT In order for JetBlue to compete in the point-to-point and regional market segments, it is recommended they develop a new business model which includes maximizing the potential synergies, as well as minimizing the costs associated with the intricacy of the JetBlue organization.
Describe the different stakeholders who influence the purpose of two contrasting businesses Describe how two contrasting organizations impact the goals and aims of the company. The key stake holders of easy jet consist of: Customers: the customers of easy jet want the services of a company to be the best of them; this means that the customers want the company to provide the best service possible. The point of view from the customer is that if they are buying a ticket they want to be taken from A – B as fast and cheap as possible so if the company raises prices or goes green and such it affects them and they wish to be taken into consideration. These people wish to get cheaper flights from the company. They have influenced the goals of the company by trying to get it to be cheapest yet profitable flight provider.
It depends on the industry barriers to entry. If the potential entrance is high, it may lead to increase the degree of industry competition. The industry attractiveness therefore is less due to low profitability (Tutor2u, n.d.). There are number factors of barrier to entry however the key barriers to entry can include: * Economics of scale * Production differentiation * Capital requirements * Customer switching costs * Access to industry distribution channels * Government policies (eNote, 2012) a. Economic scale: European airline industry has achieved economic scale in which it creates a barrier of entry that the new entrants have to compete on a large scale (eNote, 2012).
CB is facing a dilemma because the CEO wants new products that are healthier without straining relations with existing customers who made the CB wealthy. The problem is further compounded by the dissention between Dale Berry, (CEO), Terry Hersch, (VP New Product Development) and Pat French (VP Manufacturing). Both Berry and Hersch wanted a new product but French was against such a development. The Approach: Engaged by CB to consider alternatives, I would first reiterate what steps led to Innovation Technology being retained. Problem 1: The current products of CB lead to obesity and associated with heart disease, which is the meritorious reason that justifies a needed change.
New entrants such as Virgin America are bracing the competition by offering lower fares to customers. Such a strategy pose a great threat to the operations of Jet Blue whose major strategy and survival is the low airfares offered. Lastly, the potential for increased labor cost as a result of the possible future shortage of pilots predicted by the International Air Transport Association will impact negatively on future expansion programs of smaller airlines such as Jet Blue. Discuss Jet Blue’s strategic intent prior to 2008 Jet Blue strategic intent prior to 2008 was to use low fares and entertaining planes to
Question 1: What are the advantages of having new modern planes? What are the disadvantages? Advantages: • Less maintenance cost • Reliability of plans • Updates technology • Less fuel consumption • New added safety features • More space available for passengers (leg room) Disadvantages: • Cost of obtaining the new planes • Technology costs to replace or maintain • Finding the staff that have the knowledge / experience to operate the new technology • Increased insurance costs Question 2: What are some of the difficulties in long-term forecasting for air travel? • Predicting economic factors (decrease in air travel) • Fuel prices • Increase to ticket prices • Unexpected disasters for example 9/11 , SWIN flu Question 3: What are some of the difficulties in workforce planning and change for Air Canada? • When Air Canada took over Canadian Airlines, due to this take over Air Canada became heavily unionized because the Pilots, maintenance mechanics, flight attendants, ramp and cargo employees and sales and service agents all had different unions representing them.
(Argenti, 2009, p.100)It is obvious that David Neeleman and JetBlue set out to exceed customer satisfaction and ingeneral, tend to go above and beyond what the average airline has to offer. However, it seemsthat their goal of excellent customer service was higher in importance than teaching theiremployees how to communicate in emergency situations, such as the one presented to us in thecase study. It is essential for companies to find a competitive advantage to set themselves apartfrom other companies in their industry, however it is also crucial for these companies to find abalance and continue to value the basic fundamentals of communication.Data AnalysisJETBLUE AIRWAYS CASE STUDY ANALYSIS 3 • 2. JetBlue went from startup company to powerhouse of the sky in 2007 with overall growthin terms of destination and size. Run by CEO David Neeleman’s expertise and experience in theindustry, the
From the moment Tom was in charge of the company he focused on increasing the companies profit margin. This was not an easy job being that the company’s main products are considered commodities. Aside from that the partyware industry is constantly gaining new competitors that capture the market with similar products at lower prices. Tom Rose is currently faced with two marketing strategies that could be considered industry game changers and greatly impact his business. The original strategy is the launch of a brand line for Rose Partyware that will showcase a new printing technology that will improve quality and reduce costs.
JetBlue believed that its web-based booking, rather than booking through ticketing agents, the company would be able to gain greater control on managing seat sales which in turn avoids customers being bumped. JetBlue also uses paperless cockpit, no meals served on any of its flights, and paperless ticket, which all reduce time and costs. They also use a single aircraft type, which in the long run keeps training costs low, and manpower utilization at a high. Another way that JetBlue utilizes it resources is by using the new A320s, which are larger and more fuel-efficient. JetBlue also has less congested airports, which helps to speed flight departures and get their passengers to their destinations in a faster manner.