Jetblue Case Analysis
Introduction
The purpose of this paper is to evaluate the business strategy of JetBlue Airways. JetBlue was founded by David Neeleman in 2000 and quickly became one of the largest discount airlines in the United States. It was started in the east coast primarily and expanded throughout the country and entered the international market soon after that. JetBlue received the “#1 Airline Brand” rating10 even while keeping its advertising costs significantly lower than Southwest Airlines. Jet Blue’s talent in formulating and executing effective strategies has enabled the company to rapidly grow in the domestic and international market base.
JetBlue – the Low Cost and High Customer Satisfaction Airline
JetBlue’s growth in both financial and geographical areas has grown continuously despite of recent global economic challenges. One reason for an early success is JetBlue entered the market with a pretty large level of liquidity of any start-up airline. This way it was able to focus more on the market necessities like High Customer Service and Low Price. It met the needs of the customers whose primary concerns are price and route. The way it differentiated itself from competitors is by offering an above average customer experience and amenities for a discounted price.
Airline Industry Overview
Discount airlines have lot to handle when they enter into the market which is already competitive and well taken over by the legacy airlines. The airline industry has its own challenges – Strict federal regulations, safety for passengers, customers driven mainly by price and route. The key challenges to survive in this market are:
1. Limited Suppliers - Boeing and Airbus are the only suppliers in the market and control the overall pricing and force the airlines to get into long-term contracts
2. Fuel – The rising cost of fuel is one the most significant challenges and has a significant impact on the airline’s financial performance.
3. Price-Sensitive Customers –
The purpose of this paper is to evaluate the business strategy of JetBlue Airways. JetBlue was founded by David Neeleman in 2000 and quickly became one of the largest discount airlines in the United States. It was started in the east coast primarily and expanded throughout the country and entered the international market soon after that. JetBlue received the “#1 Airline Brand” rating10 even while keeping its advertising costs significantly lower than Southwest Airlines. Jet Blue’s talent in formulating and executing effective strategies has enabled the company to rapidly grow in the domestic and international market base.
JetBlue – the Low Cost and High Customer Satisfaction Airline
JetBlue’s growth in both financial and geographical areas has grown continuously despite of recent global economic challenges. One reason for an early success is JetBlue entered the market with a pretty large level of liquidity of any start-up airline. This way it was able to focus more on the market necessities like High Customer Service and Low Price. It met the needs of the customers whose primary concerns are price and route. The way it differentiated itself from competitors is by offering an above average customer experience and amenities for a discounted price.
Airline Industry Overview
Discount airlines have lot to handle when they enter into the market which is already competitive and well taken over by the legacy airlines. The airline industry has its own challenges – Strict federal regulations, safety for passengers, customers driven mainly by price and route. The key challenges to survive in this market are:
1. Limited Suppliers - Boeing and Airbus are the only suppliers in the market and control the overall pricing and force the airlines to get into long-term contracts
2. Fuel – The rising cost of fuel is one the most significant challenges and has a significant impact on the airline’s financial performance.
3. Price-Sensitive Customers –