Going public when the airline industry are still suffering from 9.11 attack is adventurous, especially it is even harder when the competition of the airline industry is severe, given the fact that 87 new-airline failure over the past 20 years. However, JetBlue has good management team with strong capability, and it has considerable competitive advantage compared to comparable companies, hence there are more opportunities and strengths than threats and weaknesses. JetBlue’s executive management team have rich experience in the airline industry. CEO David Neeleman has extensive experience with airline start-ups and worked in various low-fare flights. COO David Barger and CFO John Owen had worked in airline companies before joining JetBlue.
Due to Because of the growth in the low-cost segment of the airline industry, Southwest has tomust continue to innovate and differentiate itself from others to perpetuate its success and popularity. An evaluation of the company’s internal strengths and weaknesses and external opportunities and threats served as the foundation for this strategic analysis and marketing plan. The plan centers on Southwest’s growth strategy by , suggesting ways in which it can build on existing customer relationships and on theby developingment of new services targeted to specific customer niches. (Pride & Ferrel, 1995) SITUATION ANALYSIS Southwest Airlines provides low-fare air transport among 58 cities within the United States. According to the company, “Southwest is dedicated to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride and company spirit.” As of December 31, 2007, Southwest served 411 non-stop city pairs.
JetBlue Airways Managerial Accounting 630 Ruizhen Harden November 28, 2011 What is JetBlue’s strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion? I found that the company’s strategy for success pivots around product leadership customer value proposition. As stated in the report itself JetBlue, "provides high-quality customer service at low fares, primarily on point-to-point routes" (JetBlue, 2005).
As delays will often frustrate travellers, this can make WestJet that traveller’s top choice. An order winner is the low price fares that WestJet is able to provide to customers in order to entice them to fly with them. Bargain-basement airfares may appeal to many travellers and the affordability of fares may be what drives that traveller’s decision on whether to drive, or purchase from another airline. 2. WestJet’s competitive priority relates to cost, quality and delivery.
The financial controller at that time Michael O’ leary had convinced Ryan to let him try and bring the company out of its financial difficulties. Southwest Airlines in the United States was the world's first low-cost airline. O'Leary introduced a strategy very similar to that of Southwest Airlines. These strategies saw a complete turnaround of Ryan Air losses and turn it into an it into a successful organization (Davy 2005: 3). Its operations have also expanded massively in geographical coverage: in the current financial year, Ryan Air operated 288 routes across 21 countries using 12 European bases, and plans to more than double its fleet in the next 7 years (www.ryanair.com).
The regulation period was a time where prices for fares were fixed and customer service and amenities were where they were to achieve the competitive advantage. The deregulation period was a time where fare pricing was the focus of achieving the competitive advantage. This brought about the commonplace of new entrants and resulted in dismal profitability becoming a constant fixture since deregulation (Grant, 2010). Relevant Factual Information about the Problem or Decision the Organization Faced The airline industry had to face many different decision making processes in order to develop a game plan that would benefit their organization and bring the profit they were looking for. This brought about mergers, price changes, new routing strategies and the quest for differentiation.
JetBlue’s strategy for success is product leadership with customer value proposition. With their strategy they promise their customers high-quality customer service at a low fare on primarily point-to-point routes. This is evidenced by the fact that JetBlue has one of the largest load factors in the United States. JetBlue implements this strategy by having a productive workforce, having low distribution costs, flying the same type of aircraft, and utilizing their aircraft effectively. What business risks does JetBlue face that may threaten the company’s ability to satisfy stockholder expectations?
(Jet Blue, 2005). Jet blue is noticeably taking strides to gain a significant market share by producing a valued product at affordable fares while maintaining efforts to emphasize low operation costs, and operating in underserved markets. (Jet blue 2005) What business risks does Jet Blue face that may threaten the company’s ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks? (Hint: Focus on pages 17-23 of the 10-K/A.)
Most airline customers travel for vacation or holiday, and plane fares are a more important criterion rather than product/service differentiation between the airlines. New entrants may be not be able to provide customers with lower rates. Established airlines are also able to provide better fare discounts for regular passengers (mostly geared towards retaining loyalty from business travellers). The huge capital needed to enter into the airline industry is a high barrier to clear for new entrants. The computerized system for online reservations that are used by travel agents or ticketing offices was developed by the already established airline companies.
Executive Summary From the humble beginnings as a quirky but scrappy underdog that flew mainly to secondary airports, Southwest has climbed up through the industry ranks to become the major competitive force in the domestic segment of the US airline industry, the only major US air carrier that was consistently profitable since 1973. Since 2000, the number of passengers flying Southwest had increased by more than 28 million annually, whereas passenger traffic on domestic routes had declined at such carriers as American Airline, Delta, Continental, United and US Airway. These amazing and considerable successes have been achieved thanks to the wholehearted and exceptionally effective efforts of Southwest management in crafting as well as implementing and executing the company’s strategy: the low-cost/no-frills operating strategy and the company’s friendly, fun-loving spirit conveyed to customers. Thus, our condensed analysis highly recommended that Southwest management (1) keep going and developing their successful low-cost operating strategy and the fun-loving spirit, (2) reinforce the safety of flights (as well as the planes), (3) continue training Southwest’s employees going along with start training programs for AirTran’s managers and employees (after the acquisition) (4) purchase some new plane models (besides Boeing 737) or upgrade the flying systems for the company’s old planes and (5) consider investing in higher-income customers. Those steps are truly deserved to be taken a shot with an aim of improving and maintaining Southwest’s unique core values and customer-attracted image.