Business Strategy Class Project
JetBlue Airways Company is a low-cost airline based in the United States. The airline was founded in the year 1998, and developed to become among the top 11 best players in the industry within a short period of six years. Together with Southwest airline, JetBlue managed to realize profits in the aftermath of the attacks in World Trade Center on September 11, 2001. Other players in the airline industry experienced losses as there was a decline in their overall operations in the market. The core strategy of JetBlue airline was to lower costs mainly by use of smaller and productive employees. This was to be coupled with the use of better technology, automated processes, and use of improved models of planes that reduce training costs as well as maintenance costs.
During the development stage, JetBlue was contemplated to launch a new type of planes called, EMBRAER, that is small as compared to A320s that was currently under use. These new models were to be used for penetrating small cities as well as during off-peak season on the already existing routes. The reason for introducing these planes was to ensure that the set strategy of low-cost was functioning properly. This plan alarmed JetBlue’s competitors who then started adding discount carriers similar to that of differentiating products. Thus, JetBlue had always to ensure that it has new offers that attracted more customers to gain a competitive advantage over other airlines. A PESTEL analysis of JetBlue airline aims to address legal/political, economic, social and technological factors that the company faces.
The industry experienced deregulation in 1978 which paved an opportunity for new businesses to enter the market. New market segments like that of low-cost service started to emerge thus changing the landscape of the airline industry. The bankruptcy laws impact highly on the industry as it allows non-profitable companies to operate as they are protected. In many situations, JetBlue Airways are affected by political and legal factors as the government frequently intervenes on the industry economic operations. Thus, the company operates under a very restricted and regulated political environment. Usually, the United States tries to intervene and protect both the airline’s operations and the passengers’ safety. These measures came in place as there has been a rise in crime related to terrorism and therefore, the government plays its role of setting laws that ensure every airline service provider operates within set guidelines
Economic factors
Social Factors
JetBlue Airways have experienced an increase in the demand for air travel each year. This is characterized by the changing preference in air transportation by the modern generation. The company has embraced the use of demographic increase to forecast future demands for air travel choices (Helms and Nixon 215-251). Also, the company participates in social activities like advocating for a cleaner environment, and supporting the need in society and thus it receives overwhelming support from various quarters. Thus, JetBlue Airways can attract many customers each year’s resulting into more profits.
Technological Factors
Notably, JetBlue Airways face the above-mentioned environmental factors which affect its operations both negatively and positively. The company strives to counter competition in the airline industry by establishing strategies like that of lowering costs to attain its set goals which are profit maximization. The company has made use of modern technology to the initiation of the automated process and use of technologically improved aircraft to ensure efficiency in its activities. Also, it is noted that the company is usually affected by the fluctuations in the oil prices.
Work Cited
Helms, Marilyn M., and Judy Nixon. "Exploring SWOT analysis-where are we now? A review of academic research from the last decade." Journal of strategy and management 3.3 (2010): 215-251.
Arjomandi, Amir, and Juergen Heinz Seufert. "An evaluation of the world's major airlines' technical and environmental performance." Economic Modelling 41 (2014): 133-144.
