Jetblue Airways
1. What is JetBlue strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion? Product leadership and customer value proposition are definitely Jet Blue’s strategies for success. They pride themselves on low fares and great customer service. They are also focused on bringing low airfares to customers that need low fare options to fly to destinations with high airfares.
Jet Blue has been so successful in their strategies that they have the highest percentage of seat capacity utilized. They have certainly created a winning formula. 2. What business risks does JetBlue face that may threaten its ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks? Jet fuel prices and operating costs are two of the business risks that Jet Blue faces. An example of a control activity the company could implement to reduce these risks is putting into place a contract that puts jet fuel at a fixed price for a certain amount of time.
In addition, another possible risk is foreign exchange and a contract should be entered to protect their proceeds. JetBlue’s workforce could seek to unionize. This process could result in work slowdowns or stoppages and it could increase operating expenses. Control activities: Establish a Human Resource Management Department that proactively works with employees to ensure that their morale remains high and that they feel fairly treated. 3. How can the concept of unit level activities be applied to an airline? More specifically, what are 2 examples of unit level activites for JetBlue?
What steps has JetBlue taken to manage these unit level activities more efficiently? In a manufacturing context, a unit refers to an individual unit of product. In an airline context, a “unit” refers to a passenger on a particular flight. Two examples of unit-level activities include baggage handling and ticket processing. Both activities are directly influenced by the number of passengers served. JetBlue’s point-to-point flights simplify the baggage handling process because there is no need to transfer luggage from one flight to numerous other connecting flights.
Point-to-point flights also lower the incidence of mishandled bags. JetBlue reports that it mishandled only 2. 99 bags per 1,000 customers. JetBlue uses technology to streamline ticket processing. This is the company’s least expensive form of ticket processing. It also mentions that JetBlue further simplified ticket processing by enabling on-line check-ins, allowing customers to change reservations through the website, and installing 76 kiosks in 19 cities.
4. How can the concept of batch-level activities be applied to an airline? What are two examples of batch-level activities for JetBlue? What steps has JetBlue taken to manage these batch-level activities more efficiently? In a manufacturing context, a batch refers to a number of units of product that are processed together. A batch-level cost is the same regardless of how many units of the product are included in the batch. In an airline context, a “batch” refers to a flight departure. Examples of batch-level activities include refueling the airplane, performing pre-flight maintenance, and cleaning the interior of the cabin.
The costs to refuel an airplane, maintain it, and clean it are essentially the same regardless of how many passengers are on board. Using only one type of aircraft simplifies the gate turnaround process, which includes all of the batch-level activities mentioned in the prior paragraph. JetBlue operated each airplane an average of 13. 4 hours per day, which the company believes was higher than any other major U. S. airline. Efficient gate turnarounds are one of the keys to JetBlue’s high rate of aircraft utilization.
5. What is one example of a customer-level activity and an organization-sustaining activity for JetBlue? An example of a customer-level activity for JetBlue is maintaining its customer loyalty program called TrueBlue Flight Gratitude. An example of an organization-sustaining activity is complying with government regulations that are established by the Department of Transportation, the Federal Aviation Administration, and the Transportation Security Administration. JetBlue must comply with these regulations in order for the business to operate.
Reference
“Jetblue Airways Corporation,” Securities and Exchange Commission, (2004), Retrieved on April 25, 2011 http://www.sec.gov/Archives/edgar/data/1158463/ 000104746905005739/a2153142z10-ka.htm#05NYC1962_1
