...Problems at JetBlue JetBlue’s problems were caused by both management as well as technological issues. If JetBlue’s management team would have been better prepared or made different decisions then many problems could have been avoided. One of the things that airlines know is that bad weather can never be predicted or controlled no matter what the circumstance and any airlines should be prepared for the worst, especially during the off season when bad weather occurs the most. From my experience, delaying customers to their flights happens quite often, especially during bad weather. But every airline knows that a customer will only wait for so long before getting discouraged and upset. Having customers wait for several hours or sitting on a plane for up to 11 hours would cause most people to never consider that airline again, in turn JetBlue would be losing large quantities of customers due to bad management decision making. When customers where finally allowed off the plane and already upset they were not able to get ahold of airline agents or had an hour wait time to try to rebook or find out where their bags were. This just added to an already furious customer base. Although JetBlue had a system in place their system was only equipped to handle under normal circumstances and was not equipped for emergencies. If JetBlue had prepared their system for an emergency situation then customers could have handle the situation through the airline agency in a more timely manner and would...
Words: 318 - Pages: 2
... Spring II 2014 Paige Pence Jamie Neidholdt Tyler Slayton Ja-ir Gooden Jacob Miller May 4, 2014 JETBLUE AIRWAYS: GROWING PAINS I. Introduction A. Executive Summary 1. Summary statement of the problem: JetBlue Airways was a fairly new airline that was going up against such airlines like Southwest, AirTran, and Delta. Started in 1999, JetBlue Airway was able to turn profits fairly quickly; in 2001 the company had profits of $38.5 million (George & Regani, 2008, 20-4). From there on it seemed that the company would continue to be profitable especially with expansions in the works; moving into areas that competitors ignored, ordering more planes, expanding to the west coast, and building a new terminal at JFK. However, due to various external and internal factors the company once again posted losses in 2005 and 2006. 2. Summary statement of the recommended solution: The problem is that JetBlue is expanding too fast and too soon to keep up. The company needs to slow their growth so that the company can keep up with the pace. Furthermore, the company needs to continue to do what the company does best; superior customer service, low fares, short-to-medium routes instead of offering what the competitors are doing. This is lessening JetBlue’s differentiation from other companies creating just another option for customers. Finally, JetBlue needs to continue to make cuts as outlined in the Return to Profit plan so that the company reduces expenses. B. The...
Words: 6380 - Pages: 26
...Executive Summary Going public’s main advantage is to provide liquidity and access to raise capital in the future, however, it can lead to problem in control of management and is expensive. There are Free Cash Flow techniques and relative valuation techniques that we can use to value Jetblue’s share, however we are going to use the Free Cash Flow technique for this case as this is an IPO and the company had no history whatsoever that we can rely on except by using its similar competitor statistics and assumptions to value Jetblue. In conclusion, we have calculated that using Free Cash Flow technique, the share price is $57 and therefore the current range of $25 to $27 is underpriced and that they should increase it to $56 to $58. Case We can use several valuation techniques to value JetBlue’s shares which are the Free Cash Flow to Equity (FCFE) method, Free Cash Flow to Firm (FCFF) method and relative valuation techniques such as price earnings ratio (P/E), EBITDA multiple, price cash flow rations (P/CF), price book value ratios (P/Bv) and price sales ratio. An Initial Public Offering is when a company initially offers shares of stocks to the public, which is also known as going public. An IPO is the first time the owners of the company give up part of that ownership to stockholders. The advantages of Initial Public Offering are associated with liquidity, monitoring, credibility, access to markets and to be able to raise capital in the future. On the other hand, the disadvantages...
Words: 1162 - Pages: 5
...………………………………………………7 Internal Rivalry …………………………………………………………. 8 Entry ………………………………………………………………………… 9 Substitutes and Complements …………………………………….. 11 Supplier Power ………………………………………………………….. 12 Buyer Power …………………………………………………............... 13 Financial Analysis ………………………………………………….14 SWOT Analysis ………………………………………………………23 Strategic Issues and Recommendations …………………..25 References ……………………………………………………………30 Harkness Consulting 2 Executive Summary From its initial flight in February 2000, JetBlue emerged into the heavily competitive airline industry as the little airline that could. While legacy carriers declared bankruptcy, JetBlue trounced its competition by offering low‐cost, customer‐focused service. Under the direction of the energetic David Neeleman, JetBlue became a major player in the airline industry. Operating domestic flights on a point‐to‐point system, JetBlue primarily manages East‐West and Northeast‐Southeast routes. While this route structure initially proved profitable for the company, rising costs and heated price competition are currently threatening JetBlue’s market share. The company’s stock price has dropped drastically since reaching a high of over $30 in 2004. Currently priced at less than half its 52‐week high, JetBlue must take serious strategic action in order to reinvigorate its business. After working with low‐fare carrier Southwest, a touch‐screen airline reservation company...
Words: 8870 - Pages: 36
...Strategies for Growth and Value Creation Case Analysis: JetBlue – Managing Growth Prepared by, Alexander Martinus Christian (1342980602) Dina Sandri Fani (1342981574) Muhammad Irsan (1340001263) Puntin Kulmongkon (1342980514) BINUS BUSINESS SCHOOL BINUS UNIVERSITY JAKARTA 2015 I. Case Synopsis JetBlue Airways, Inc. (JetBlue) is a low-cost carrier (LCC) that is based in New York’s John F. Kennedy International Airport. The founder, David Neeleman, developed JetBlue’s business plans in 1998, and established the company in February 1999 after raising the needed financial resource to create the airline. JetBlue started its operations in February 2000, with its first flight from JFK to Fort Lauderdale airport in Florida. The September 11, 2001 terrorist attacks caused a very devastating time for the airline industry. Even though this occurred only a year after JetBlue started as a LCC, the company was one of three airlines to produce a profit at the end of 2001. Their performance in this year alone showed many other airlines that JetBlue was a big competitor in the airline industry who couldn’t be ignored. In the following years JetBlue grew substantially as one of best-rated airlines in the industry for customer satisfaction. In May 2007, JetBlue now decides to change its command structure. David Neeleman is being replaced by David Barger, former chief operating officer (COO) and president of the company, as chief executive officer (CEO). After gaining...
Words: 3591 - Pages: 15
...blue hits turbulence assignment 1. As shown in the case, the types of information systems are - TPS ( Transaction Processing)system that is used for making the reservation, papereless processes in this case - CRM (Customer Relationship Management) that enables the customers the communication with the airline company and acquire updated flight info such as delays and cancellations - ESS (Executive Support System)- rovides senior management a way to address strategic issues and planning based on results provided by the systems 2. Jet Blue business model was to provide a luxurious flying experience by using info systems to automate key processes such as the process of ticket sales, and baggage handling, they were also used to manage planes, crews and scheduling. This enabled the airline to turn a profit by running its business at 70% of the cost of larger competitors. The Jet Blue scored customer retention rate of 50%. 3. The problem appeared when the ice storm struck the NYC area. JetBlue made a fateful decision to maintain its schedule in the belief that the horrible weather would break. The weather conditions and the delays or cancellations of other flights caused customers to flood JetBlue’s reservation systems, which couldnt handle the onslaught. Also, JetBlue didnt have a system in place for the rested crews to call in and have their assignments rerouted. The communication system was inadequate. The department responsible for allocating pilots...
Words: 422 - Pages: 2
...JetBlue Questions for Discussion 1. Give examples of needs, wants, and demands that JetBlue customers demonstrate, differentiating these three concepts. What are the implications of each for JetBlue’s practices? * First of all people who go to an airline are because they have the need to travel, which the main feature is. Inducing the consumer or person, as their main need. * JetBlue customers to contract your travel company this time JetBlue, wanted a good service during the flight, as the other American airlines had a basic customer service, which did not feel very comfortable, where they found an airline that will feature an extensive variation of national destinations, also where the client does not feel comfortable with the treatment of the service on board, where he had nowhere to eat, no technology on board, little comfort seats and above very low value of the company to its customers. * National Flights In United States, apart from being very basic and failing to meet the expectations of consumers and transform routine travel to something kind of awkward for people, also did not have the best rates, and this is what people demand, apart from good service to meet their needs also need to optimize resources. The implication for the needs, wants and demands of customers because the bad services of the other airlines it provoked that JetBlue was renewing all his ideology and it will begin to be employed at his culture focusing especially in...
Words: 3954 - Pages: 16
...struggled to place reservations, and the WestJet Web Site crashed repeatedly. WestJet’s call centers were also overwhelmed, and customers experienced slowdowns at airports. This delay provoked a deluge of customer dissatisfaction. In addition to the increase in customer complaint calls, customers also took to the Internet to express their displeasure. Angry flyers expressed outrage on Facebook and flooded WestJet’s site, causing the repeated crashes. These problems impact both of the airlines operational activities and decision making to change their initial carrier which had started out as a system designed for smaller start-up airlines to a better carrier. Other than that, both airlines needed more processing power to deal with a far greater volume of customers. They also needed features like the ability to link prices and seat inventories to other airlines with whom they cooperated. Both JetBlue and WestJet contracted with Sabre Holdings to upgrade their airline reservation systems. The differences between WestJet and JetBlue’s implementation of Sabre’s SabreSonic CSS reservation system illustrate the dangers inherent in any large-scale IT overhaul. It also serves as yet another reminder of how successfully planning for and implementing new technology is just as valuable as the technology itself. * Evaluate the risks of the projects to upgrade the reservation systems of...
Words: 1983 - Pages: 8
...` Soaring Above Classics’ Issues Meredith Simmons MKT/571 September 24, 2012 Heidi Kelley Soaring Above Classics’ Issues Classic Airlines (CA) has historically held an impressive market share, as it has experienced tremendous growth coupled with over 25 years of experience in the aviation industry. However, like many of its competitors, CA has recently been plagued with internal and external issues which could easily pose threats to its survival. In efforts to deal with these obstacles effectively, it is necessary to assess CA’s predicament, discuss and decide on corrective action to prevent any further decline, and review the implemented plans to determine how CA will thrive in the future. In essence, the appropriate parties must comprehend how the company ended up in this situation in efforts to formulate a good plan to rise above it. CA must address these problems swiftly by using the basic problem-solving method. The company must use their marketing resources, as well as some external marketing options, to determine a profitable solution. This paper will demonstrate how the nine-step process can be used as a means to return Classic Airlines back to its place as a major contender in the airline industry now and in the future. The Situation According to the University of Phoenix scenario (2010), some of the challenges are increased hesitation about flying...
Words: 2820 - Pages: 12
...Brian Williams 560 MGMT Case Analysis #1 JetBlue Introduction JetBlue Airways was founded in 1998 by former Southwest Airlines employee, David Neeleman, The company looks to utilize similar cost savings techniques as Southwest and has even improved, expanded and added some. In addition, JetBlue has attempted to offer differentiation in service to improve the customer experience. Unlike most pointtopoint airlines, JetBlue decided to add a second airplane model in order to expand into the regional flights. A deal was struck to purchase up to 200 jets from Embraer through 2016. The growth the company forecasted was soon realized to not be in the best interests of the future of JetBlue. In 2006 the company executives discovered that the the time it would take in order to just achieve breakeven cash flows with the growth model at that time was much longer than originally anticipated. This, along with dramatically rising fuel costs, meant a new plan would have to be implemented in order to slow growth. In 2007, newly appointed CEO David Barger had to design a way to reduce growth even further. What needed to be decided though was which jets to cut, and how much of each. the A320 was the model that built JetBlue and the aircraft that had proven its success in the past. The E190 provided a new unique opportunity and a niche market that JetBlue may be able to take great advantage of. ...
Words: 2665 - Pages: 11
...Chapter 01 What Is Strategy, and Why Is It Important? Multiple Choice Questions 1. | Keeping in mind Apple's competitive advantage, which of the following products was introduced by Apple in 2007? A. | iPad | B. | iPhone | C. | iPod | D. | iTunes | | 2. | _____ is best described as an integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage. A. | Supply chain management | B. | Integrated technology management | C. | Strategic management | D. | Inventory management | | 3. | _____ is best described as a set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors. A. | Behavior modification | B. | Strategy | C. | Credo | D. | Competency management | | 4. | Which of the following stages of the strategic management process involves an evaluation of a firm's external and internal environments? A. | Strategy analysis | B. | Strategy implementation | C. | Strategy formulation | D. | Strategy control | | 5. | In _____, a firm frames a guiding policy to address the competitive challenge. A. | strategy control | B. | strategy implementation | C. | strategy formulation | D. | strategy analysis | | 6. | Through _____, a firm puts its guiding policy into practice by employing a set of coherent actions. A. | strategy control | B. | strategy implementation...
Words: 23148 - Pages: 93
...analysis, the selected method to evaluate the theory, was conducted from published research studies in leading Australian and New Zealand Public Relations and Communication journals, the websites of the PRism journal, the Australian and New Zealand Communication Association (ANZCA), the Public Relations Institutes of Australia (PRIA) and New Zealand (PRINZ), and via the database search platform Ebsco. The content analysis provided information about the number of published articles, leading theoretical models, research methods, and research orientation. The in-depth interviews, the chosen method to investigate the crisis communication practices, were conducted with three Australian and three New Zealand practitioners and addressed the issues of cultural influence, strategy applicability, and stakeholder relevance in crisis communication. However, both methods complement each other and add different perspectives to the research subject. The findings of this research project indicate a dominance of non-theoretical, qualitative crisis communication research in Australia and New Zealand in the...
Words: 50459 - Pages: 202
...obr76817_ch01_002-044.indd Page 3 09/09/10 9:50 AM user-f501 CHAPTER 1 207/MHRL043/kno31619_disk1of1/0070131619/kno31619_pagefiles: Management Challenges Business Applications Module I Development Processes Information Technologies Foundation Concepts FOUNDATIONS OF INFORMATION SYSTEMS IN BUSINESS Ch apt er Highligh t s L ea r n i n g O bj ect i v e s Section I Foundation Concepts: Information Systems in Business 1. Understand the concept of a system and how it relates to information systems. 2. Explain why knowledge of information systems is important for business professionals, and identify five areas of information systems knowledge that they need. 3. Give examples to illustrate how the business applications of information systems can support a firm’s business processes, managerial decision making, and strategies for competitive advantage. 4. Provide examples of several major types of information systems from your experiences with business organizations in the real world. 5. Identify several challenges that a business manager might face in managing the successful and ethical development and use of information technology in a business. 6. Provide examples of the components of real world information systems. Illustrate that in an information system, people use hardware, software, data, and networks as resources to perform input, processing, output, storage, and control activities that transform data resources into information...
Words: 24619 - Pages: 99
...Abstract Brands rushed into social media, viewing social networks, video sharing, online communities, and microblogging sites as the panacea to diminishing returns for traditional brand building routes. But as more branding activity moves to the Web, marketers are confronted with the stark realization that social media was made for people, not for brands. In this article, we explore the emergent cultural landscape of open source branding, and identify marketing strategies directed at the hunt for consumer engagement on the People’s Web. These strategies present a paradox, for to gain coveted resonance, the brand must relinquish control. We discuss how Webbased power struggles between marketers and consumer brand authors challenge accepted branding truths and paradigms: where short-term brands can trump longterm icons; where marketing looks more like public relations; where brand building gives way to brand protection; and brand value is driven by risk, not returns. # 2011 Kelley School of Business, Indiana University. All rights reserved. 1. The party crashers: Marketers and the Social Web Brands today claim hundreds of thousands of Facebook friends, Twitter followers, online community members, and YouTube fans; yet, it is a lonely, scary time to be a brand manager. Despite marketers’ desires to leverage Web 2.0 technologies to their advantage, a stark truth presents itself: the Web was created not to sell branded products, but to link people together in collective conversational...
Words: 12470 - Pages: 50
...Business Horizons (2011) 54, 193—207 www.elsevier.com/locate/bushor The uninvited brand Susan Fournier a,*, Jill Avery b a b Boston University School of Management, 595 Commonwealth Avenue, Boston, MA 02215, U.S.A. Simmons School of Management, 300 The Fenway, M-336, Boston, MA 02115, U.S.A. KEYWORDS Branding; Brand management; Social media; Web 2.0; Co-creation Abstract Brands rushed into social media, viewing social networks, video sharing, online communities, and microblogging sites as the panacea to diminishing returns for traditional brand building routes. But as more branding activity moves to the Web, marketers are confronted with the stark realization that social media was made for people, not for brands. In this article, we explore the emergent cultural landscape of open source branding, and identify marketing strategies directed at the hunt for consumer engagement on the People’s Web. These strategies present a paradox, for to gain coveted resonance, the brand must relinquish control. We discuss how Webbased power struggles between marketers and consumer brand authors challenge accepted branding truths and paradigms: where short-term brands can trump longterm icons; where marketing looks more like public relations; where brand building gives way to brand protection; and brand value is driven by risk, not returns. # 2011 Kelley School of Business, Indiana University. All rights reserved. 1. The party crashers: Marketers and the Social Web Brands...
Words: 12407 - Pages: 50
