JetBlue case study

Strategic Objectives

A strategic objective of an organization is a broadly defined objective which the company has to reach to make its strategy success. We can distinguish eight major groups of these goals: Financial resources Physical resources, Human resources, Market standing, Innovation, Productivity, Profit requirements and Social responsibility.1 Although JetBlue had some issues during their operations they mostly succeeded in reaching its strategic goals.

In 1998 as the company was established by Neeleman, he raised 160 million dollars of capital from investors like Western Presidio Capital. This was a really strong start for a new firm in the aviation industry.

In 2001, just three years after the company’s start, they were growing so rapidly that the possibility of an IPO came into consideration to fund its expansion plans. After the terrorist attacks on 11/9 it had to be postponed. The U.S government granted the Aviation industry a $15 billion bailout and JetBlue also gained its part from it so they could go on with their expansion plans.2
After the events a lot of airliners went bankrupt as the people were afraid of flying. JetBlue quickly identified those routes which were abandoned by the bankrupted firms, so for example they started to fly every day on the week to Florida. This helped them to stay and succeed on the market. As an innovation JetBlue always used new aircrafts and flew to airports which were considered bad by other companies. The biggest advantage they reached with it was the reduction of fuel and maintenance costs which was an objective of Physical resources.

1http://www.businessdictionary.com/definition/strategic-goals.html
2http://www.jetblue.com/about/ourcompany/history.aspx

Mission, Vision, and Value statement

JetBlue does not really have a traditional, formal, written mission, vision, and value statement. They claims that they are different from other competitors. Instead of mission statement, JetBlue rely on a set of core values. Their mission is to make travel more enjoyable by focusing on safety, punctuality, comfort, high quality customer service, and low prices. The only source where we can find a mission statement is in the annual report of “Our Value Propositions”, where JetBlue claim their mission is to “Bring the humanity back to the air travel” (JetBlue Annual Report)1. The founder of JetBlue, David Neeleman, wanted to change the public picture of low-fare, crowded airlines. He wanted JetBlue to be more than just another cheap, affordable airline, he wanted to bring comfort, high quality service into JetBlue, and transform it into a pleasant, entertaining experience2.

JetBlue’s value statement are also different from the average firm’s statement. JetBlue listed its values, namely: Safety, Caring, Integrity, Fun, and Passion3. JetBlue also claim that, they use their core values to make decisions both in work and life.

In an interview Nigel Adams said that, JetBlue has never formalized a traditional vision statement. This is due to the fact, JetBlue is a very young and innovative company in the aviation industry, mainly that’s why their approach in creating mission, vision and value statement is unique, different, and non-traditional compared to the other companies operating in the same industry.

1(http://www.jetblue.com/flying-on-jetblue/customer-protection/)

2(http://money.cnn.com/2000/10/06/cashflow/q_jetblue/)

3(http://www.jetblue.com/work-here/more-to-look-forward-to.aspx)

Competitive strategy

Competitive strategy is a long-term action plan through the company can achieve competitive advantage over its rivals. JetBlue achieves competitive advantage through besides operating with low cost fees it gives added value to its consumers. JetBlue uses consumer satisfaction as a strategic driver.

This value added operations include that its seats are covered by leather however it cost twice as much, but it lifetime twice longer, than drape ones. In the long run this investment returns, as consumer prefer choose those company services, which one is differentiated to others. Moreover for it adjusts that passengers can choose its place where they would like to seat.

JetBlue provides free on board television for every seat, which is a crucial competitive advantage to its competitors. Low cost airlines companies aim to minimize its time to be on ground and maximising time in the air. Turnaround time is around 35 minutes, which one is much more lower that the average of full service lines, which is around 90 minutes. Passengers can schedule theirs arrivals therefore they can minimize theirs waiting time between the flights and can get faster to theirs destination, JetBlue’s online reservation system makes a big stake from sales - 70% - which makes lower far costs, and less human resource needed for sales purposes. More and more business travellers use JetBlue because of these two features.

JetBlue benefits from its advantage to competitors that they are using new airplanes, such as A-320 aircrafts. They are running uniform fleet of planes, what makes to put the maximum number of seats to its planes. JetBlue focuses on routes which are high demanded such like the West Coast, Florida and those routes it is easy to provide lower far costs than its competitors.

Summary

JetBlue does prove with its methods that it is a young, innovative company with just the right amount of non-traditional-ness.

Their preference of using very firmly outlined one-word core values and values show that they do intend to make a difference. Their values and mission all points toward the goal of basically changing the current impression of air travel between the people.

This again is strongly in connection with one of their biggest misfortunes, being present on the market at 9/11 which generally frightened people away from air travel. JetBlue took the opportunity and risked what they had. They kept on using the abandoned air tunnels and their rewards were obvious. While other companies went bankrupt, JetBlue continued to survive and lived through the crisis.

In their competitive strategies their focuses are mostly on creating added value for customers, in many various ways (leather seats, choice of seating, televisions) and using the most efficient options (35 minute turnover time, high demand routes for lower price) and on lowering the fees. Being able to maintain these advantages and using their higher risk-reward preference they do continue to grow and provide what their customers grew accustomed to.

References:

JetBlue | Customer protection. (n.d.). Retrieved March 10, 2015, from http://www.jetblue.com/flying-on-jetblue/customer-protection/

David Neeleman launches upstart airline JetBlue into the wild blue yonder. (n.d.). Retrieved March 10, 2015, from http://money.cnn.com/2000/10/06/cashflow/q_jetblue/

JetBlue | Work Here | More To Look Forward To. (n.d.). Retrieved March 10, 2015, from http://www.jetblue.com/work-here/more-to-look-forward-to.aspx Strategic Goals Retrieved March 10, 2015, from http://www.businessdictionary.com/definition/strategic-goals.html JetBlue | About | History. (n.d.). Retrieved March 10, 2015, from http://www.jetblue.com/about/ourcompany/history.aspx