The business-level strategy of low-cost JetBlue Airlines.
One-page write-up
Case # 22: JetBlue Please use concepts and theories covered in class (Chapters 2, 3, 4 and 5, i.e. Porter’s Five Forces, Resource Based View, Value Chain, Business-level Strategies) when you tackle following strategic questions. Main focus: Chapter 5 – Business Level Strategy You are encouraged to go beyond the information provided in the case (library sources, recent news articles about the company) when drafting your strategic analysis. Questions: 1. What are key forces in the general and industry environments that affect JetBlue’s choice of strategy? (Chapter 2: gen env’t and Porter’s Five) 2. What internal resources and assets does JetBlue have that may give it a competitive advantage? (Chapters 3 and 4, resource based view - VRIS) 3. What is JetBlue’s business-level strategy? Is JetBlue’s competitive advantage sustainable? (Chapter 5)
JetBlue’s Case Analysis
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JetBlue’s Case Analysis
Answer 3
The business-level strategy of JetBlue Airlines is providing cheap or low-priced flights to its customers within and outside the United States of America (USA). In particular, as discussed in chapter five, low-cost services mean producing or offering products at affordable prices (Dess, Lumpkin, Eisner, & McNamara, 2012). In particular, the prices ought to be lower than those of competitors. David Barger, JetBlue’s chief executive officer (CEO), said that the airline’s primary strategy is to avoid takeovers so that it can continue to grow alone (Damaraju, Eisner, & Dess, 2013). Before the firm’s operations meltdown during the Valentine’s Day of 2007, JetBlue had been serving its clients excellently. A survey conducted by J. D. Power and Associates in 2012 revealed that the airline was the best in providing customer-friendly services.
JetBlue’s primary competitive advantage of low pricing is not sustainable. In reality, the structure of low-cost helped the airline to grow faster and to penetrate the territories of bigger airlines in the USA (Trefis Team, 2015). However, Porter’s five forces show that the level of the threat posed by new entrants is medium in the USA’s airline sector. In other terms, there is a likelihood that other small firms might enter the mark...
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