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Jetblue Airways Case Study

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Case Study 13: JetBlue Airways

External Environment Analysis: * PESTEL(Macro-level environment) * Political: September 11 terrorist attack, tons of new flying rules and regulatory factors, political stability, competitive industry, * Economic: Improved purchasing power, rise in oil prices & inflation * Sociocultural: Increased entertainment level, greater customer awareness, security level of customers, bad service & lost baggage * Technological: Automated cockpit systems, introduction of animated advertisements, e-ticketing * Ecological: N/A * Legal: N/A

* Five Forces * Threat of Entry: Low. Deregulation allowed easy entrance, low profit margin, hard to differentiate, high cost of capital to enter, brand image and customer loyalty important, safety and reliability important for new companies entering * Power of Suppliers: High. Only 2 suppliers, not much bargaining ability, fuel suppliers can control the price of fuel, fuel supply extremely important for JetBlue * Power of Buyers: High. Several flying options for customers, no switching cost, easy for customers to research competitors, customer incentives * Threat of Substitutes: High. A number of other airlines available, high existing barriers, bankruptcy laws allow continued operation for companies operating at a loss * Rivalry among competitors: High. Large competitors such as Delta, United Airways & American Airlines. Competition can get fierce when the industry is at a standstill. Industry very sensitive to economic cycles.

Internal Analysis: * VRIO Framework Resources & Capabilities | Valuable? | Rare? | Costly to Imitate? | Organized to Capture Value? | | | | | | Online Streaming | Y | Y | Y | Y | Convenience | Y | Y | Y | Y | DVD Rental | Y | N | N | N | Blu-ray Rental | Y...

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