JetBlue Airways CASE
“JetBlue Airways: Managing Growth”
Samuel Natkovitch
I. Introduction The airline industry is one of a highly complex and unpredictable nature. “JetBlue Airways: Managing Growth” presents a case about a brand that can attest to this fact, a brand that also happens to be one of the big airline corporations of America- JetBlue. Former Executive Vice President of Morris Air, David Neeleman, founded JetBlue in 1999. Neeleman entered the market with 10 planes and in just under 6 years, the JetBlue fleet consisted of 119 planes. JetBlue achieved tremendous growth in a short amount of time. The airline adopted Porter’s low cost and differentiation strategies, allowing it to achieve high market share as well as competitive edge. It operated under a low-cost carrier (LCC) model in which the fares offered were comparatively lower than those offered by other airlines in the industry. JetBlue’s strategy was to attract domestic and commercial customers by providing them discounted prices and aircraft equipped with latest technology. The low-cost strategy was adopted via productive workforce, automated processes and heavy reliance on technology. To examine JetBlue’s success at the time, the VRIO framework can be used:
Valuable- JetBlue was most certainly valuable. It is a leader in the LCC airline industry and it has a higher level of cost leadership than most other airlines.
Rare- JetBlue was able to attain a high level of consistency in terms of their procedure & operations. This is rare in the airline industry.
Inimitable- JetBlue’s strategy and operations made it a hard brand to imitate.
Organized- JetBlue exploited all its resources and did so in an organized and efficient way.
II. Problem Statement As is the case with most companies, JetBlue started facing problems down the road. The company experienced a lot of downturn due to operating crises and a significant rise in fuel price. More planes meant more money being spent on fuel. So the management decided to
Samuel Natkovitch
I. Introduction The airline industry is one of a highly complex and unpredictable nature. “JetBlue Airways: Managing Growth” presents a case about a brand that can attest to this fact, a brand that also happens to be one of the big airline corporations of America- JetBlue. Former Executive Vice President of Morris Air, David Neeleman, founded JetBlue in 1999. Neeleman entered the market with 10 planes and in just under 6 years, the JetBlue fleet consisted of 119 planes. JetBlue achieved tremendous growth in a short amount of time. The airline adopted Porter’s low cost and differentiation strategies, allowing it to achieve high market share as well as competitive edge. It operated under a low-cost carrier (LCC) model in which the fares offered were comparatively lower than those offered by other airlines in the industry. JetBlue’s strategy was to attract domestic and commercial customers by providing them discounted prices and aircraft equipped with latest technology. The low-cost strategy was adopted via productive workforce, automated processes and heavy reliance on technology. To examine JetBlue’s success at the time, the VRIO framework can be used:
Valuable- JetBlue was most certainly valuable. It is a leader in the LCC airline industry and it has a higher level of cost leadership than most other airlines.
Rare- JetBlue was able to attain a high level of consistency in terms of their procedure & operations. This is rare in the airline industry.
Inimitable- JetBlue’s strategy and operations made it a hard brand to imitate.
Organized- JetBlue exploited all its resources and did so in an organized and efficient way.
II. Problem Statement As is the case with most companies, JetBlue started facing problems down the road. The company experienced a lot of downturn due to operating crises and a significant rise in fuel price. More planes meant more money being spent on fuel. So the management decided to