In JetBlue case, the current economy situation creates high market entry barriers, which consists extremely high fixed cost and numerous capital requirement. Moreover, the potential and existing competitors affect the industry has a low profit margin, and it is difficult for new entrances to differentiate their products and services from competitors. The bargaining power of supplier is high. The key inputs for the airline industry are the fuel and aircrafts. Boeing and Airbus dominate the aircraft manufacturing industry.
Based on the book when there are competitive markets such as airlines, a company certainly needs to look at costs and revenue very closely. (Brickley, Smith, & Zimmerman, 2009, p. 180) In this case I believe that the flights from San Francisco t Washington DC should be discontinued. Even though United Airlines is a large company and profitable if they continue these flights in the long run they will lose money. The other option that they would have would be to increase the fares to cover those costs, but since the airline industry is a competitive market people are more likely to go with a lower cost airline. The first thing the airline must do is look at the firm supply.
TITLE OF ASSIGNMENT CRAFTING AND EXECUTING STRATEGY STUENT MOHAMMAD HOSSAIN INSTRUCTOR DR. RHONDA POLAK COURSE TITLE STRATEGIC MANAGEMENT –BUS 599 DATE: - OCTOBER 16, 2011 Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy. Trends in the US airline industry have an impact the performance and strategies of the airlines. As a result, the Jet Blue has struggled to survive. The trends of U.S. airlines industries are discussed as follows: (1) Increased crude oil pricing: fluctuations crude oil price lead to passenger fees for revenue generation, This dramatic price increase caused airlines to struggle to offset the cost of fuel. Presently, gas prices have dropped.
I. KEY ISSUE In 2007, the CEO of JetBlue Airways, David Barger, faced an immediate survival issue as the company struggled to overcome a major operational failure during a difficult time in the airline industry when fuel prices were increasing tremendously and the profitability levels were low. Barger knew he should move quickly to maintain the confidence of customers, employees, and shareholders. He considered the option of reducing either E190 or A320 deliveries in order to maintain low costs as the company was not ready to continue growth in the E190 regional market segment. II.
West Jet Strategy 1. WestJet competes in the air travel market segment with a focus of providing low cost flights to the common traveler, such as friends and relatives. An order qualifier would be the timeliness of the flights. WestJet has achieved the best on-time arrival performance in its market segment which it is able to pass on to customer. As delays will often frustrate travellers, this can make WestJet that traveller’s top choice.
The merger itself was questionable. The Department of Justice filed a lawsuit against regarding concerns that it could raise prices for consumers. A settlement was reached, and the world largest airline is formed. American Airlines has been suffering for many years. The company has suffered more losses than profits.
These intellectual property laws are recognized for major contributions to society and the economy. Recently intellectual properties have been credited with the majority of companies’ success, therefore catapulting intellectual properties to the forefront of our social and economic interest. Southwest Airline owns the rights to certain intellectual properties that allow it to stand out among its competition. If a company, especially one in such a highly competitive industry, does not have exclusive rights to certain aspects of its operation than it is extremely difficult to compete. The airline industry seems to be one those that it is very difficult to obtain intellectual properties, especially when dealing
Firstly, market analysts began by talking directly with major airlines to get their estimates of future needs and then they combined this information with econometric models to generate forecasts. Segments we defined by range of travel and all forecasts were based on the following assumptions: continued regulation of the airline industry; continued airline preferences for routes that directly linked pairs of major cities; steadily rising fuel prices and no new competition from other airframe manufacturers in the medium range market. Configurations include the choice of engines, wings and tail. The process of configuration is complex and repeatedly. The configuration changes constantly due to the requirement s of customers.
Off-the-shelf software is cheaper than developing custom software. Conversely, due to Boeing’s massive scope and size, outsourcing certain elements would be inefficient. Outsourcing payroll or sales force management with 158,000 employees in 70 countries would be an extremely difficult, let alone expensive, task. Processes like payroll and sales force management often require much human interaction in order to work properly, so outsourcing these elements could create major roadblocks for employees and employers alike. On the other hand, why would Boeing develop in-house some of the software applications used in conjunction with its products?
MKC3130 Strategic Issues in Marketing Assignment 2 – Part 2: Case Report – Solutions Case Study: Olympic Rent-A-Car U.S. 1. Situation Analysis SWOT Analysis STRENGTHSS1 Strong brand equityS2 Competitive service and pricingS3 Heavy airport presence S4 Accessible to any customer | WEAKNESSESW1 Customer loyal programs inadequate compared to competitors (customers are not loyal to their business)W2 Reactive strategy, follows what it’s competitors does W3 Industry wide standard (clients belong to several reward programs)W4 High program costs (airports counters are expensive to maintain) | OPPORTUNITIESO1 Chance to increase market share or take market share from competitors O2 Increase rental customers loyalty (loyal customers are the more profitable) O3 Change points system and implements other benefits O4 Adopt a dollar based reward systemO5 Adapt to the current and future trends in business users | THREATST1 Increased use of technology, like teleconferencing can lead to a decline in business trips and therefore rental carsT2 Third-party consolidators, online price comparisons and bookingsT3 High levels of competitionT4 Slow growing market for business car rentals, market has reached maturity with potential for decline | 2. Problems/Opportunities TOWS Analysis | Strengths | Weaknesses | Opportunities | Strengths and OpportunitiesS1O2Leverage its strong brand equity to increase rental customer’s loyalty. | Weaknesses and OpportunitiesW2O5 Instead of using a reactive strategy and following what it’s competitors do, Olympic should become an elite provider and adapt to the current and future trends in business users. | Threats | Strengths and ThreatsS2T2Leverage its competitive service and pricing to compete with third-party consolidators and online bookings.