The Battle for Logan Airport: American Airlines versus JetBlue (C) 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 (C)
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 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 B case:UV3908).
Authors :: Ming-Jer Chen, Jason Anderson, Patrick Mueller, Jeff Tolonen
Swot Analysis of "The Battle for Logan Airport: American Airlines versus JetBlue (C)" 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 (C) case study are - Strategic Management Strategies, Market research, Pricing 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 (C) casestudy better are - – increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google,
customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, etc
Introduction to SWOT Analysis of The Battle for Logan Airport: American Airlines versus JetBlue (C)
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 (C) 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 (C) can be done for the following purposes –
1. Strategic planning using facts provided in The Battle for Logan Airport: American Airlines versus JetBlue (C) 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 (C) | 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 (C) Harvard Business Review case study are -
Learning organization
- Airlines Jetblue 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 Airlines Jetblue 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 (C) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
Innovation driven organization
– Airlines Jetblue is one of the most innovative firm in sector. Manager in The Battle for Logan Airport: American Airlines versus JetBlue (C) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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 (C) 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.
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 (C) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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 (C) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Airlines Jetblue is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Airlines Jetblue in the sector have low bargaining power. The Battle for Logan Airport: American Airlines versus JetBlue (C) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Airlines Jetblue to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses The Battle for Logan Airport: American Airlines versus JetBlue (C) | 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 (C) are -
Low market penetration in new markets
– Outside its home market of Airlines Jetblue, firm in the HBR case study The Battle for Logan Airport: American Airlines versus JetBlue (C) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study The Battle for Logan Airport: American Airlines versus JetBlue (C), it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to strategic competitive environment developments
– As The Battle for Logan Airport: American Airlines versus JetBlue (C) HBR case study mentions - Airlines Jetblue 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.
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.
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 (C), 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.
Slow decision making process
– As mentioned earlier in the report, Airlines Jetblue 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. Airlines Jetblue 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Airlines Jetblue 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.
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 (C), 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.
Need for greater diversity
– Airlines Jetblue 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Battle for Logan Airport: American Airlines versus JetBlue (C), 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.
Opportunities The Battle for Logan Airport: American Airlines versus JetBlue (C) | 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 (C) are -
Better consumer reach
– The expansion of the 5G network will help Airlines Jetblue to increase its market reach. Airlines Jetblue will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Airlines Jetblue can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Learning at scale
– Online learning technologies has now opened space for Airlines Jetblue to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
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 (C) - 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.
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.
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.
Loyalty marketing
– Airlines Jetblue has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, 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, 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.
Creating value in data economy
– The success of analytics program of Airlines Jetblue has opened avenues for new revenue streams for the organization in the industry. This can help Airlines Jetblue to build a more holistic ecosystem as suggested in the The Battle for Logan Airport: American Airlines versus JetBlue (C) case study. Airlines Jetblue can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 (C) 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 (C) are -
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.
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.
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.
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 Airlines Jetblue.
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 (C), 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 .
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.
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. Airlines Jetblue needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Airlines Jetblue is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Airlines Jetblue will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
Technology acceleration in Forth Industrial Revolution
– Airlines Jetblue has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Airlines Jetblue 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.
Weighted SWOT Analysis of The Battle for Logan Airport: American Airlines versus JetBlue (C) 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 (C) 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 (C) 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 (C) 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 (C) 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.
