JetBlue Essay

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1.0 Introduction JetBlue launch its operation in February 2000. It is a domestic airline that provides superior customer services at low fares. This company is able to stand strong even after the tragic events of September 11, 2001. As a new entrant in the airline industry, JetBlue provides wider cabin and wider seats for the passengers and innovation IT programs such as Internet booking system to gain market share. JetBlue started to experience slowed growth from 2005 to 2007 in the competitive environment when major airlines start to expand their business into domestic businesses. This report aims to critically evaluate JetBlue’s current position in the Airline Industry. Attempts are taken in the next following sections to analyze JetBlue’s industry environment and SWOT before concluding its current position. 2.0 Industry Environment Analysis We can derive JetBlue Airway’s current position in the airline industry by using Michael Porter’s Five Forces model show in Figure 1. The five forces are competitive rivalry, threat of substitute products, and threat of new entrants, bargaining power of suppliers and bargaining power of buyers. 2.1 Threat of new entrants The threat of new entrants presents the possibility of new firm entering the industry, which increases the competition while reducing the airline revenue. There are a few factors influencing the threat of new entrants such as government regulations, product differentiation, capital requirements and lastly switching costs. There was a low barrier of entry in the airline industry when Airline Deregulation Act eliminated government control over fares and routes. This allows those new entrants who enter the airline industry to slash price to capture market share which increase in competition. Furthermore, to differentiate themselves, airlines try to establish a strong brand name and loyalty

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