JetBlue’s mission was to profoundly known as the leading low-fare low-cost airline. This could only be accomplished by offering customer’s high-quality efficient service and a differentiated product to stimulate the current markets demand while continuing to focus on cost-containment. What business risks does JetBlue face that may threaten its ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks? Organizational risks are specific factors (unique to every organization) that arise within all businesses; potential risks that may threaten JetBlue’s ability to satisfy stockholder expectations are jet fuel prices, retaining sufficient staff and exceeding projected operating costs.
Jet Blue took a unique approach to the solution of this problem and centered even more upon their customers. They now offer customer compensation for canceled or delayed flights. So because of their tendencies to focus on the happiness of their customers, they relished from their problem generally unscathed. 1) Cost leadership Jet Blue Airline’s targeted customer is someone who seeks low-cost flights and or is a frequent flyer. Either type of customer saves a great deal of money because they take advantage of Jet Blue’s cheap ticket prices to fifty-one destinations.
I decided to do my research paper on Costco because I’ve always admired their consistency, separation and distinguishing company ethic/philosophy which stands out in corporate America. People tend to ask the question, “Can the rest of corporate America become more like Costco? Or will Costco, buffeted by the same disruptive changes affecting all of retail, be forced to become more like everyone else?” (Brad Stone, Costco CEO Craig Jelinek Leads the Cheapest, Happiest Company in the World, page 1) Also, I’ve been inquiring about Costco before this primary research. I’ve always considered working with Costco due to their impeccable employee benefits & pay. Obtaining the research wasn’t hard, for Costco doesn’t seem like one of those companies who are illusive and try to maintain discreet with all their operations.
Their service strategy is based on short-haul, point-to-point direct flights that are accomplished with amazingly short turnaround times. With their strategy, Southwest has a strong majority of the market share in the point-to-point market. Southwest’s goal is to make air travel affordable to all, both the time-sensitive business traveler and the price-sensitive leisure traveler. They are able to offer their low ticket fare because of good management-labor relations, fast turnaround time at the gate, faster speed of operations offered with smaller airports, and lower maintenance costs due to flying only one model of airplane. The strong leadership, strategy and culture that were built and are supported by Herb Kelleher, the former CEO of Southwest, support all these items that keep ticket fares low.
Costco’s mission, business model and strategy integrate efficiently to form a business model that many companies have since mimicked in hopes of duplicating their success. Costco’s mission statement is, “To continually provide our customers with quality goods and services at the lowest possible prices”. Three top executives offered a more expansive view of their mission in their 2011 Annual Report, “The company will continue to pursue its mission of bringing the highest quality goods and services to market at the lowest possible prices while providing excellent service and adhering to a strict code of ethics that includes taking care of our employees and members, respecting our suppliers, rewarding our shareholders, and seeking to be responsible corporate citizens and environmental stewards in our operations around the world.” (Thompson, A., Peteraf, M.A., Gamble, J.E., Strickland III, A.J., (2014), Crafting and Executing Strategy). This mission is firmly supported through company
Boeing VS Airbus A380 Business Interior Both Boeing and Airbus share some similar business practices and marketing techniques, but that’s where it stops, the rivalry and competition between the two companies has always proved to be beneficial to clients. Between the two companies, you are able to find the perfect aircraft for your needs. But between Boeing and Airbus, who provides the best marketing to clients, and most important, who has the better product. Boeing 787 Mockup Interior Boeing is staying away from the large capacity aircraft designs and is looking to producing the B787 Dreamliner which will be a quick and fuel efficient. Having already filled the market with 747s, Boeing is looking to capitalize on the demand for direct flights and medium capacity requirements.
JetBlue's core strategy is to “provides high-quality customer service at low fares primarily on point-to-point routes" (“JetBlue”, 2005). Offering alternative choices to customers such as point-to-point routes to areas that are not catered to by most airlines as well as large metropolitan areas that have had” high average fares” is another part of their strategy. Differentiating their product and service is another part of the plan. Items like new aircraft, leather seats, free LiveTV at every seat and pre-assigned seating are just a few things that make JetBlue different (“JetBlue”, 2005). I would say that JetBlue would fall under both customer intimacy and product leadership customer value proposition.
Southwest has a well defined business model that uses single aircraft type, short-hauls, secondary airports, point-to-point versus hub-and-spoke to keep its costs down. Southwest tries hard to differentiate itself by doing seemingly weird things. For example, not assigning seats in its flights helps to reinforce its image that it gets passengers to their destinations when they want to get there, on time, at the lowest possible fares. By not assigning seats, Southwest can turn the airplanes quicker at the gate. If an airplane can be turned quicker, more routes can
Suppliers’ bargaining power in oil sector is low, as these industries used vertical integration to control the process, there is no threat of forward integration (as in Airlines) and the concentration is low (there are many plant suppliers and engineers). In Airlines it is high, as the concentration of aircraft producers is moderate, the power of services is low and the power of jet fuel producers is high. To face the threat of entry industry can keep costs low and consumer loyalty high and encourage the Government to limit foreign business activity. In oil companies this threat is very low, as there are very high barriers to entry (high capital cost, economies of scale, environmental regulation) and product differentiation is low, as the main factor is oil. In Airlines the threat of entry is higher than in the oil industry.
Case Study: Ryanair MGT an Intro Ch.1 pg. 5,17,21 • What functions is Ryanair Performing? Ryanair is aimed to serve a group of flyers who wanted a functional and efficient service, rather than luxury. • What did ‘management’ contribute to the growth of the airline? Management used the fall in air traffic to their advantage by serving the needs of a new niche market, people who want basic service at a good fair, not luxury.