The Battle for Logan Airport: American Airlines versus JetBlue (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Battle for Logan Airport: American Airlines versus JetBlue (B)
The entrance of JetBlue into the Boston area low-cost carrier market in 2004 is viewed as a direct attack on Major airlines and prompts American Airlines to decide whether or not to respond and if so, how to respond. American, already weakened financially, cannot match JetBlue's prices and remain profitable. It must weigh the importance of the Boston market in its overall economic picture and the potential responses of other airlines to whatever action it takes. This case reviews the recent economic conditions affecting the airline industry; the business models of the 3 main types of airlines--Major, Low-Cost Carriers, and Regionals--and their strengths and vulnerabilities in terms of recent competitive market conditions; and the economic role airports play. This case is divided into 3 parts: A, B, C. The B case involves American's counter-attack--a free ticket promotional offer from American on the day JetBlue opens. The C case discusses the responses of other airlines and JetBlue and a preliminary analysis of the fallout: resulting financial and Market costs and benefits. See related cases (A case: UV3906; and C case: UV3909).
Authors :: Ming-Jer Chen, Jason Anderson, Patrick Mueller, Jeff Tolonen
Swot Analysis of "The Battle for Logan Airport: American Airlines versus JetBlue (B)" written by Ming-Jer Chen, Jason Anderson, Patrick Mueller, Jeff Tolonen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Airlines Jetblue facing as an external strategic factors. Some of the topics covered in The Battle for Logan Airport: American Airlines versus JetBlue (B) case study are - Strategic Management Strategies, Pricing, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Battle for Logan Airport: American Airlines versus JetBlue (B) casestudy better are - – increasing commodity prices, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, there is backlash against globalization, technology disruption, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion,
increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of The Battle for Logan Airport: American Airlines versus JetBlue (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Battle for Logan Airport: American Airlines versus JetBlue (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Airlines Jetblue, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Airlines Jetblue operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of The Battle for Logan Airport: American Airlines versus JetBlue (B) can be done for the following purposes –
1. Strategic planning using facts provided in The Battle for Logan Airport: American Airlines versus JetBlue (B) case study
2. Improving business portfolio management of Airlines Jetblue
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Airlines Jetblue
Strengths The Battle for Logan Airport: American Airlines versus JetBlue (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Airlines Jetblue in The Battle for Logan Airport: American Airlines versus JetBlue (B) Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Airlines Jetblue in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Airlines Jetblue
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Airlines Jetblue does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Strategy & Execution industry
– The Battle for Logan Airport: American Airlines versus JetBlue (B) firm has clearly differentiated products in the market place. This has enabled Airlines Jetblue to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Airlines Jetblue to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Airlines Jetblue is one of the leading recruiters in the industry. Managers in the The Battle for Logan Airport: American Airlines versus JetBlue (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Airlines Jetblue has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Battle for Logan Airport: American Airlines versus JetBlue (B) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Airlines Jetblue are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Successful track record of launching new products
– Airlines Jetblue has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Airlines Jetblue has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Operational resilience
– The operational resilience strategy in the The Battle for Logan Airport: American Airlines versus JetBlue (B) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Airlines Jetblue is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ming-Jer Chen, Jason Anderson, Patrick Mueller, Jeff Tolonen can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Highly skilled collaborators
– Airlines Jetblue has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in The Battle for Logan Airport: American Airlines versus JetBlue (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Airlines Jetblue digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Airlines Jetblue has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Airlines Jetblue has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses The Battle for Logan Airport: American Airlines versus JetBlue (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Battle for Logan Airport: American Airlines versus JetBlue (B) are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Airlines Jetblue is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Battle for Logan Airport: American Airlines versus JetBlue (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study The Battle for Logan Airport: American Airlines versus JetBlue (B) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case The Battle for Logan Airport: American Airlines versus JetBlue (B) can leverage the sales team experience to cultivate customer relationships as Airlines Jetblue is planning to shift buying processes online.
Interest costs
– Compare to the competition, Airlines Jetblue has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Airlines Jetblue supply chain. Even after few cautionary changes mentioned in the HBR case study - The Battle for Logan Airport: American Airlines versus JetBlue (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Airlines Jetblue vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Battle for Logan Airport: American Airlines versus JetBlue (B), it seems that the employees of Airlines Jetblue don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Battle for Logan Airport: American Airlines versus JetBlue (B) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Airlines Jetblue has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Airlines Jetblue has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Battle for Logan Airport: American Airlines versus JetBlue (B), in the dynamic environment Airlines Jetblue has struggled to respond to the nimble upstart competition. Airlines Jetblue has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Airlines Jetblue has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - The Battle for Logan Airport: American Airlines versus JetBlue (B) should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Ming-Jer Chen, Jason Anderson, Patrick Mueller, Jeff Tolonen suggests that, Airlines Jetblue is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Skills based hiring
– The stress on hiring functional specialists at Airlines Jetblue has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Opportunities The Battle for Logan Airport: American Airlines versus JetBlue (B) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study The Battle for Logan Airport: American Airlines versus JetBlue (B) are -
Leveraging digital technologies
– Airlines Jetblue can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Buying journey improvements
– Airlines Jetblue can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Battle for Logan Airport: American Airlines versus JetBlue (B) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Airlines Jetblue can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, The Battle for Logan Airport: American Airlines versus JetBlue (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Airlines Jetblue can use these opportunities to build new business models that can help the communities that Airlines Jetblue operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Using analytics as competitive advantage
– Airlines Jetblue has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study The Battle for Logan Airport: American Airlines versus JetBlue (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Airlines Jetblue to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Airlines Jetblue is facing challenges because of the dominance of functional experts in the organization. The Battle for Logan Airport: American Airlines versus JetBlue (B) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Airlines Jetblue in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Airlines Jetblue can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Airlines Jetblue to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Airlines Jetblue to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Airlines Jetblue in the consumer business. Now Airlines Jetblue can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Airlines Jetblue can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Airlines Jetblue can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Airlines Jetblue to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Developing new processes and practices
– Airlines Jetblue can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Threats The Battle for Logan Airport: American Airlines versus JetBlue (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Battle for Logan Airport: American Airlines versus JetBlue (B) are -
Stagnating economy with rate increase
– Airlines Jetblue can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Battle for Logan Airport: American Airlines versus JetBlue (B), Airlines Jetblue may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Consumer confidence and its impact on Airlines Jetblue demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Airlines Jetblue business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Airlines Jetblue needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Airlines Jetblue can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Airlines Jetblue high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Airlines Jetblue can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study The Battle for Logan Airport: American Airlines versus JetBlue (B) .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Airlines Jetblue with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Airlines Jetblue can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Airlines Jetblue needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Airlines Jetblue in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Airlines Jetblue
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Airlines Jetblue.
Weighted SWOT Analysis of The Battle for Logan Airport: American Airlines versus JetBlue (B) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study The Battle for Logan Airport: American Airlines versus JetBlue (B) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study The Battle for Logan Airport: American Airlines versus JetBlue (B) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study The Battle for Logan Airport: American Airlines versus JetBlue (B) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of The Battle for Logan Airport: American Airlines versus JetBlue (B) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Airlines Jetblue needs to make to build a sustainable competitive advantage.