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Jetblue Airways Starting from Scratch Essay - 8425 Words

Jetblue Airways Starting from Scratch

Where have you heard this before? We're starting tickets and go to the big cities.'

a new low-fare airline.

We're going to offer low-fare

-Financial
If you want to be a millionaire, start with a billion dollars and launch a new airline: -Richard Branson, Founder, Virgin

Keep an eye on ]etBlue.

That could prove to be a successful operation.3 -Herb Kelleher, Co-founder,

Ann Rhoades looked up from the stack of papers in front of her and gazed out the window. She watched with pride as a JetBlue plane lifted off from Kennedy Airport. She knew from the departure time that this one was bound for Buffalo. She paused for a moment to reflect on what had been a very exciting year for the start-up. JetBlue's service had grown from 9 departures per day at launch in February 2000 to more than 50 per day in the past 11 months. The fleet had grown from 2 planes to 10 with the arrival of one new Airbus A320 every five weeks (se4

Exhibit 1 for first year growth). The business plan called for adding 10 new planes every year thrOllgh the end of 2003, bringing the fleet to 40.

Rhoades,Executive Vice President for People, had been extremely busy -growing the JetBlue team from the original 10 people to almost 1000. She knew that she would continue to add approximately 100new "crew members" with the arrival of every Ilew airplane and that, if they hit their plan, JetBluewould employ nearly 5000people within the next 4 years. Shewas charged with achieving this rapid growth while building a values-based, high conunitment organizational culture. Her experienceas head of human resourcesfor Southwest Airlines from 1988to 1994provided Rhoadeswith both appreciation for the challenge and expertise to meet it. She was committed to attracting, developing and retaining outstanding people who could make the JetBlue concept a reality. Still, she recognized that JetBlue'sexpansion goals were more aggressivethan any she had met before.

ProfessorJody Hoffer Gittell and ProfessorCharles O'Reilly of Stanford University Graduate BusinessSchool prepared this casein cooperation with the Global Airline Industry Program at the MassachusettsInstitute of Technology. HBS casesare developed solely as the basis for class discussion.Casesare not intended to serveas endorsements, sourcesof primary data, or illustrations of effective or ineffective management. Copyright @2001President and Fellows of Harvard College. To order copiesor requestpermission to reproduce materials, call 1-800-545-7685, write Harvard BusinessSchool Publishing, Boston, MA 02163,or go to http:/ /www.hbsp.harvard.edu. No part ofthis publication may be reproduced, stored in a retrieval system, used in a spreadsheet,or transmitted in any form or by any means-electronic, mechanical, photocopying, recording, or otherwise-without the permission of Harvard BusinessSchool.

JetBlue Airways: Starting from Scratch

Birth of an Airline
JetBlue was the best-funded start-up in U.S. aviation history, founded in early 1999 with an initial capitalization of $130 million. JetBlue's strategy was to combine common sense with innovation and technology to "bring humanity back to air travel." To accomplish this, JetBlue aimed to be the first "paperless" airline, substituting computers and information technology for everything from flight planning to aircraft maintenance to the sole use of e-tickets. But the company wasn't only about efficiency, it was also focused on service. In the words of founder David Neeleman, "We like to think of ourselves as customer advocates. We believe that all travelers should have access to high quality airline service at affordable fares."4

Brave words in the face of the depressingreality that of the 51 U.S. airlines founded during the 1980s, only two, America West and Midwest.

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Executive Summary JetBlueAirways . the latest entrant in the airlines industry has gone through the initial stages (entrepreneurial and collectivity) of the organizational life cycle rapidly under the successful leadership of David Neelman. JetBlueAirways is currently in the formalization stage of the life cycle where in it needs to create procedures and control systems to effectively manage its growth. Also as it proceeds to grow further to reach the elaboration stage, JetBlue needs to continue to align itself with the environment in order to maintain its sustained growth. JetBlue . Entrepreneurial Stage David Neelman realized his vision of creating an airlines company that is focused on customer service by startingJetBlue . During the startup phase or entrepreneurial stage, typically most of the companies go through the activities of marketing the service and /or product. But Neelman, perceptive of the industry needs, went about raising enough capital before startingJetBlue . as airlines industry is a capital intensive industry. His entrepreneurial style and previous experience enabled him to identify the core value of the service “To improve the passenger experience at a low cost” that he wanted JetBlue to provide. Neelman wanted to utilize technology to bring better customer experience at a low cost. Some of the.

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SUBJECT: JetBlueAirways Key strategic issues faced by JetBlueAirwaysJetBlueAirways was established in USA as a low-cost domestic airline carrier. The company started operating as a point-to-point carrier, providing quality customer service at competitive prices. Basically, the main strategy of JetBlue is to offer its clients a combination of low fares and product differentiation. In terms of strengthening its market positions, the following key strategic issues are faced by the company: How to achieve “cost leadership” and “product differentiation”? JetBlue achieves “Cost leadership” through efficient operations and innovations. For instance, serving no-meals allows the company to maintain quicker turnarounds at the airports. New airplanes minimize repairs, maintenance and fuel costs. Being highly productive in the usage of its workforce and assets also helps the company to follow its low-cost strategy. Innovations such as software for electronic ticketing and network of home-based reservation agents reduce need for physical infrastructure, hence decrease overhead expenses. In addition, the differentiated strategy of the company is achieved through various features such as leather seats, 100 channels satellite radio, in-flight entertainment system and friendly services. Offering assigned seats is another valuable.

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Jet Blue Airways ; Managing Growth 1. Jet Blue´s Business- level strategy; value and cost drivers Jet Blue uses to create and maintain ist competitive position Founded by the discount airline veteran David Neeleman in 2000, JetBlueAirways has quickly become one of the largest discount airlines in the United States. Starting primarily by serving the East Coast, the airline has since expanded throughout the country and entered the international market. The reasons for its early success are numerous: JetBlue entered the market with one of the largest levels of liquidity of any start-up airline; it met the needs of customers’ whose primary concerns are price and route; and it successfully defined its brand and differentiated itself from competitors by offering an above average customer experience and amenities for a discounted price. They are offering fares with the “point to point” system. JetBlue ´s business-level strategy is therefore a mix of cost-leadership and differentiation. David Neeleman’s idea behind JetBlue was to start a company that combined the low fares of a discount airline carrier with the comforts of a small cozy den in people’s homes. His vision involved both business and leisure customers to have cheap and affordable flights throughout the United States and abroad on newer aircraft that are not only comfortable, but are equipped with.

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JetBlueAirways David Slade BUS 630 Ashford University Milan Havel January 28, 2012 JetBlueAirways 1.) What is JetBlue’s 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? JetBlue’s strategy for success in the marketplace can be summed up, as “a leading low-fare, low-cost passenger airline by offering customers high-quality customer service and a differentiated product” (JetBlue 10-K/A Report, 2005). They believe that by offering low rates, their demand will increase, offering travelers with a low-cost alternative. They believe that having low operating costs allows them to keep unit costs down. They also research areas that have little travel and those with high travel and high costs. This allows them to target another travel point. Offering a more luxurious travel accommodation is JetBlue’s key to staying innovative and separate from the rest. JetBlue feels that customer intimacy, operational excellence, and product leadership customer value proposition are all important. They spend time hiring honest, friendly workers to give the ultimate in customer satisfaction, while only using one type of aircraft so that all of the maintenance required would be the same on all engines. By offering.

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“JetBlueAirways . Managing Growth” Samuel Natkovitch I. Introduction The airline industry is one of a highly complex and unpredictable nature. “JetBlueAirways . Managing Growth” presents a case about a brand that can attest to this fact, a brand that also happens to be one of the big airline corporations of America- JetBlue . Former Executive Vice President of Morris Air, David Neeleman, founded JetBlue in 1999. Neeleman entered the market with 10 planes and in just under 6 years, the JetBlue fleet consisted of 119 planes. JetBlue achieved tremendous growth in a short amount of time. The airline adopted Porter’s low cost and differentiation strategies, allowing it to achieve high market share as well as competitive edge. It operated under a low-cost carrier (LCC) model in which the fares offered were comparatively lower than those offered by other airlines in the industry. JetBlue’s strategy was to attract domestic and commercial customers by providing them discounted prices and aircraft equipped with latest technology. The low-cost strategy was adopted via productive workforce, automated processes and heavy reliance on technology. To examine JetBlue’s success at the time, the VRIO framework can be used: Valuable- JetBlue was most certainly valuable. It is a leader in the LCC airline industry and it has a higher level of cost leadership than.

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Background of JetBlueAirwaysJetBlueAirways Corp. is one of the major American low-cost airline and one of the best examples of a succeeding business because of excellent customer service based on low operating cost relative to the superior product offering (offer a product superior to competitors at affordable prices). JetBlue is established in 1999 by David Needleman and commenced operation only February 11, 2000 with new Airbus A320 aircraft operating between Buffalo and Ft. Lauderdale (Nasdaq 2011). In 2001 during the sharp decrease in airline travel that followed the terrorist attack company could survive the competition of the major airlines and even become one of the airline companies that made a profit (Denison Consulting 2005). Nowadays, JetBlue is the largest passenger carrier in the United States operating 115 Airbus A320 and 45 EMBARE 190 – the youngest and most fuel-efficient aircrafts serving 66 cities with an average of 650 daily flights throughout US and eleven countries in the Caribbean, South America and Latin America. JetBlue has the idea to “bring the humanity back to air travel”, including friendly, customer-service oriented staff, new aircrafts, with leather covered seats, build-in flat-screen monitors with in-flight movies, over 30 channels of DIRECTV, and 100 channel of XM satellite radio without any additional charge, providing the excellent.

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Jetblue Airways Starting from Scratch Essay - 1995 Words

Jetblue Airways: Starting from Scratch

At the beginning, JetBlue management set the tone for themselves that they would be different then other airlines. To do that they set values for all employees from top to bottom to follow and they set up an attractive pay and a unique benefits package that would allow for successful recruitment and retention of employees, while significantly reducing the chance of a union moving into the organization.

Equal Employment Opportunity Laws
There are certain Equal Employment Opportunity laws that every employer should be aware of and use as guidelines when developing a working relationship with employees and perspective employees. These laws protect employers and employees and enhance the overall association between the two. Three Equal Opportunity laws that impact JetBlue’s hiring practices are:

Title VII, Civil Rights Act of 1964, Amended 1972
One of many Equal Employment Opportunity laws, the Civil Rights Act may be the most important law as it prohibits an employer from discriminating against an individual based on race, religion, color, sex, and age. This protection from discrimination covers the areas of “hiring, firing, promoting, compensation, or in terms, conditions, or privileges of employment.” (Mondy, 2008)

Americans With Disabilities Act, 1990
Simply put, this law prohibits employers from discriminating against anyone with a qualified disability. This law establishes that an employer must make reasonable accommodations for a disabled person in the workforce that does not create an undue hardship to the employer. Examples of those accommodations are updating facilities to meet the needs of the disabled employee; adjusting work schedules; and updating equipment that a disabled employee could use.

Age Discrimination in Employment Act of 1967, Amended 1978, 1986 This law was created to protect employees over the age of 40 from employment discrimination based on age. The law also prohibits employers from forcing employees into retirement. The Age Discrimination Employment Act applies to both employees and job applicants.

JetBlue’s Recruitment Efforts
A key internal recruitment effort that JetBlue used was to seek referrals from existing employees. This effort is best illustrated with the pilots. JetBlue set out to hire employees who fit with the organization’s vision and in return they offered employees flexible time, pay and benefits and provided the pilots with updated technology and training. The goal of setting up Values and different employment packages was to show the staff that JetBlue cared about them. This in turn caused employees to be more loyal than at other airlines and soon word-of-mouth spread and people wanted to work for JetBlue. According to Dave Berger, JetBlue COO, “the happy pilots were a great source for recruiting their friends from competing airlines.” (Hoffer, 2001)

Externally, JetBlue placed one classified ad in a Salt Lake City newspaper seeking interested applicants for the position of reservations agents. This “single local advertisement” resulted in JetBlue hiring over 500 reservations agents and collecting “a waiting list of 2,500 interested applicants”. (Hoffer, 2001)The one advertisement was so successful because it enticed prospective employees with a flexible work schedule, standard pay with a bonus if they took calls whenever needed, and they provided computers and necessary equipment to the staff members so they could all work from home.

JetBlue’s Personnel Selection
JetBlue created five Values that would be used to make decisions in all areas of the organization including Human Resources. Those Values are Safety; Caring, Integrity; Fun; and Passion. JetBlue then went into detail with the Values to develop standards of “desirable and undesirable behaviors” (Hoffer, 2001) and used those standards in asking prospective employees about past behavior. JetBlue set out to hire people who best fit those Values. When interviewing an applicant.

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