Process Engineer
UMS
MBA Program
Subject: Strategic Management
Instructor: Professor Khalid alrawi
Project
JetBlue Airways: Managing Growth
Teaching Note
The JetBlue case gives students the opportunity to apply concepts in cost leadership. At the time of the case, JetBlue has enjoyed a meteoric rise to success in the airline industry by coupling a low-cost strategy while giving customers the sense that they are actually providing better features to their service (e.g. leather seats, satellite TV). Essentially, the company must figure how to grow and its adoption of the E190 to go along with its fleet of A320s suggest that the company’s managers believe that they must moderate their low-cost approach in some ways in order to find new ways to grow. More specifically, David Barger, the new CEO of JetBlue faces some important challenges:
• Softening demand • Increasing fuel prices • Managing the departure from the classical low cost carrier (LCC) approach of limiting its fleet to just one aircraft • Determining how the reduction in new plane deliveries should be distributed across the E190s and A320s? • How should JetBlue position itself to counter the competitive challenges that it faced in 2007?
The case provides some data that students can use to assess the cost structures of JetBlue and the major players in the industry. This is a valuable exercise for students. Combined with the suggested exercise below of having students collect and compare JetBlue and competitor’s prices on a single route will give them experience is looking at the fundamental issues in cost leadership.
Study and Preparation Questions: 1. What is your assessment of the attractiveness of the airline industry? 2. Choose two routes that JetBlue flies. (Compare their fares versus competitors that fly the same route.) Internet sites such as Expedia or Orbitz should make this go
MBA Program
Subject: Strategic Management
Instructor: Professor Khalid alrawi
Project
JetBlue Airways: Managing Growth
Teaching Note
The JetBlue case gives students the opportunity to apply concepts in cost leadership. At the time of the case, JetBlue has enjoyed a meteoric rise to success in the airline industry by coupling a low-cost strategy while giving customers the sense that they are actually providing better features to their service (e.g. leather seats, satellite TV). Essentially, the company must figure how to grow and its adoption of the E190 to go along with its fleet of A320s suggest that the company’s managers believe that they must moderate their low-cost approach in some ways in order to find new ways to grow. More specifically, David Barger, the new CEO of JetBlue faces some important challenges:
• Softening demand • Increasing fuel prices • Managing the departure from the classical low cost carrier (LCC) approach of limiting its fleet to just one aircraft • Determining how the reduction in new plane deliveries should be distributed across the E190s and A320s? • How should JetBlue position itself to counter the competitive challenges that it faced in 2007?
The case provides some data that students can use to assess the cost structures of JetBlue and the major players in the industry. This is a valuable exercise for students. Combined with the suggested exercise below of having students collect and compare JetBlue and competitor’s prices on a single route will give them experience is looking at the fundamental issues in cost leadership.
Study and Preparation Questions: 1. What is your assessment of the attractiveness of the airline industry? 2. Choose two routes that JetBlue flies. (Compare their fares versus competitors that fly the same route.) Internet sites such as Expedia or Orbitz should make this go