Wednesday, March 23, 2011

Jetblue: Thriving in a surviving industry

As one of Jetblue's loyal customers, I have always been amazed by its on-time flight, courtesy of flight attendants, blue potato chips, leather chair and many more. My special attachment to the airway company has triggered me to publish a blog about its business model and strategy to retain its business.

David Neeleman, Founder and CEO of JetBlue once said "JetBlue has been put together as no other airline has ever been put together before. It has the most capital. It has the best product. " His quote reminds me of the compounding effect that competitors can match the business by matching the entire activity system from first week’s reading “What is Strategy”. Jetblue knows about this and it continues to do well in a downsizing economy, in a highly competitive civil aviary industry where business is vulnerable to the volatile fuel price.

JetBlue claims a unique mix of activities including “nearly 10 percent of the airline’s flight attendants are former emergency responders”, more to chew on and more leg room and fun experience which go against the norms of the aviation industry. The fun and passion part of the company reflects the corporate culture of a company where prepared minds are working towards the same longer-term vision that is well transformed to its employees.

The customer value proposition is well reflected in its well-trained flight attendants, on-time service and automatic check-in process that improves operational effectiveness. Its profit formula that reflects in reality include substituting meals by light snacks, carefully selected routes, comparatively low fare based on low operational costs and innovative management. Having mentioned the customer value proposition and profit formula, Jetblue’s key resources and processes as simply summarized by David, is “capital, product and people.”

Sources:“Understanding Business Strategy: Concepts and Cases” by R. Duane Ireland,Robert E. Hoskisson,Michael A. Hitt;;
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