The Battle for Logan Airport: American Airlines versus JetBlue (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study Description of The Battle for Logan Airport: American Airlines versus JetBlue (A)
JetBlue will begin flying out of Boston's Logan Airport-and American Airlines was feeling the heat. JetBlue was growing eight times faster than Southwest Airlines, the longtime leader among low-cost carriers, and the rapidly expanding low-cost segment of the industry-30% of all U.S. flights, projected to rise to 40% by 2006-presented an increasing challenge to the "major" airlines. For American, JetBlue's entrance into Boston via Logan signaled a moment of reckoning. Should the airline opt for a standard competitive response, such as price reductions and frequent flyer programs? Should it take on JetBlue at Logan only, or across all the markets where it would compete with the low-cost challenger? American 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 economic conditions affecting the airline industry; the business models of three main types of airlines-major, low-cost, and regional-and their strengths and vulnerabilities in terms of recent competitive market conditions. The B case involves American's counter-attack and the C case the responses of other airlines and JetBlue, including an examination of the resulting financial and market costs and benefits.
Authors :: Ming-Jer Chen, Jason Anderson, Patrick Mueller, Jeff Tolonen
Swot Analysis of "The Battle for Logan Airport: American Airlines versus JetBlue (A)" 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 Jetblue Airlines facing as an external strategic factors. Some of the topics covered in The Battle for Logan Airport: American Airlines versus JetBlue (A) case study are - Strategic Management Strategies, 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 (A) casestudy better are - – there is increasing trade war between United States & China, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, increasing energy prices,
there is backlash against globalization, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of The Battle for Logan Airport: American Airlines versus JetBlue (A)
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 (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jetblue Airlines, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jetblue Airlines 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 (A) can be done for the following purposes –
1. Strategic planning using facts provided in The Battle for Logan Airport: American Airlines versus JetBlue (A) case study
2. Improving business portfolio management of Jetblue Airlines
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 Jetblue Airlines
Strengths The Battle for Logan Airport: American Airlines versus JetBlue (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jetblue Airlines in The Battle for Logan Airport: American Airlines versus JetBlue (A) Harvard Business Review case study are -
Strong track record of project management
– Jetblue Airlines is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Jetblue Airlines 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.
Effective Research and Development (R&D)
– Jetblue Airlines has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study The Battle for Logan Airport: American Airlines versus JetBlue (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Jetblue Airlines 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 (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Strategy & Execution field
– Jetblue Airlines is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Jetblue Airlines in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Jetblue Airlines 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 (A) 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.
Superior customer experience
– The customer experience strategy of Jetblue Airlines in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Jetblue Airlines has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Jetblue Airlines 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 (A) 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.
High switching costs
– The high switching costs that Jetblue Airlines 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.
Diverse revenue streams
– Jetblue Airlines is present in almost all the verticals within the industry. This has provided firm in The Battle for Logan Airport: American Airlines versus JetBlue (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Learning organization
- Jetblue Airlines is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Jetblue Airlines is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Battle for Logan Airport: American Airlines versus JetBlue (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses The Battle for Logan Airport: American Airlines versus JetBlue (A) | 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 (A) are -
Low market penetration in new markets
– Outside its home market of Jetblue Airlines, firm in the HBR case study The Battle for Logan Airport: American Airlines versus JetBlue (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Jetblue Airlines has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Lack of clear differentiation of Jetblue Airlines products
– To increase the profitability and margins on the products, Jetblue Airlines needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Ming-Jer Chen, Jason Anderson, Patrick Mueller, Jeff Tolonen suggests that, Jetblue Airlines 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.
High cash cycle compare to competitors
Jetblue Airlines has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Jetblue Airlines 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.
High operating costs
– Compare to the competitors, firm in the HBR case study The Battle for Logan Airport: American Airlines versus JetBlue (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Jetblue Airlines 's lucrative customers.
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 (A) 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 Jetblue Airlines has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As The Battle for Logan Airport: American Airlines versus JetBlue (A) HBR case study mentions - Jetblue Airlines takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the segment, Jetblue Airlines needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow decision making process
– As mentioned earlier in the report, Jetblue Airlines has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Jetblue Airlines even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities The Battle for Logan Airport: American Airlines versus JetBlue (A) | 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 (A) are -
Manufacturing automation
– Jetblue Airlines can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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. Jetblue Airlines can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Jetblue Airlines 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 (A) 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.
Using analytics as competitive advantage
– Jetblue Airlines 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 (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jetblue Airlines to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Jetblue Airlines 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.
Creating value in data economy
– The success of analytics program of Jetblue Airlines has opened avenues for new revenue streams for the organization in the industry. This can help Jetblue Airlines to build a more holistic ecosystem as suggested in the The Battle for Logan Airport: American Airlines versus JetBlue (A) case study. Jetblue Airlines can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Jetblue Airlines can use these opportunities to build new business models that can help the communities that Jetblue Airlines operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Jetblue Airlines in the consumer business. Now Jetblue Airlines can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jetblue Airlines 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 (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Jetblue Airlines 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
– Jetblue Airlines 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Jetblue Airlines can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Jetblue Airlines can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats The Battle for Logan Airport: American Airlines versus JetBlue (A) 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 (A) are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Jetblue Airlines with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Jetblue Airlines 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 (A) .
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.
Environmental challenges
– Jetblue Airlines 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. Jetblue Airlines can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Jetblue Airlines needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 (A), Jetblue Airlines 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 .
Technology acceleration in Forth Industrial Revolution
– Jetblue Airlines has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Jetblue Airlines needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Jetblue Airlines in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Stagnating economy with rate increase
– Jetblue Airlines 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.
High dependence on third party suppliers
– Jetblue Airlines 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.
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 Jetblue Airlines business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Jetblue Airlines.
Weighted SWOT Analysis of The Battle for Logan Airport: American Airlines versus JetBlue (A) 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 (A) 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 (A) 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 (A) 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 (A) 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 Jetblue Airlines needs to make to build a sustainable competitive advantage.