Case Study Description of JetBlue Airways: Starting from Scratch
JetBlue Airways shows how an entrepreneurial venture is able to use human resource management, specifically a values-centered approach to managing people, as a source of competitive advantage. The major challenge faced by Ann Rhoades is to grow this people-centered organization at a rapid rate, while retaining high standards for employee selection and maintaining a small company culture.
Authors :: Jody Hoffer Gittell, Charles A. O'Reilly
Swot Analysis of "JetBlue Airways: Starting from Scratch" written by Jody Hoffer Gittell, Charles A. O'Reilly includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Jetblue Airways facing as an external strategic factors. Some of the topics covered in JetBlue Airways: Starting from Scratch case study are - Strategic Management Strategies, Labor, Leadership, Organizational culture, Talent management, Venture capital and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the JetBlue Airways: Starting from Scratch casestudy better are - – supply chains are disrupted by pandemic , there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, there is increasing trade war between United States & China, geopolitical disruptions,
increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of JetBlue Airways: Starting from Scratch
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in JetBlue Airways: Starting from Scratch case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jetblue Airways, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jetblue Airways 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 JetBlue Airways: Starting from Scratch can be done for the following purposes –
1. Strategic planning using facts provided in JetBlue Airways: Starting from Scratch case study
2. Improving business portfolio management of Jetblue Airways
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Jetblue Airways
Strengths JetBlue Airways: Starting from Scratch | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jetblue Airways in JetBlue Airways: Starting from Scratch Harvard Business Review case study are -
Training and development
– Jetblue Airways has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in JetBlue Airways: Starting from Scratch 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 Jetblue Airways 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.
Ability to recruit top talent
– Jetblue Airways is one of the leading recruiters in the industry. Managers in the JetBlue Airways: Starting from Scratch are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Jetblue Airways 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 JetBlue Airways: Starting from Scratch HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Jetblue Airways is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Jetblue Airways has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Jetblue Airways 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.
Innovation driven organization
– Jetblue Airways is one of the most innovative firm in sector. Manager in JetBlue Airways: Starting from Scratch Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Jetblue Airways has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Jetblue Airways to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Jetblue Airways 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Jetblue Airways digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Jetblue Airways 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.
Learning organization
- Jetblue Airways 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 Airways is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in JetBlue Airways: Starting from Scratch Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the JetBlue Airways: Starting from Scratch 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.
Weaknesses JetBlue Airways: Starting from Scratch | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of JetBlue Airways: Starting from Scratch are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the JetBlue Airways: Starting from Scratch 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 Airways has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Jetblue Airways is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Jetblue Airways needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jetblue Airways to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Jetblue Airways 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.
Low market penetration in new markets
– Outside its home market of Jetblue Airways, firm in the HBR case study JetBlue Airways: Starting from Scratch needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study JetBlue Airways: Starting from Scratch, in the dynamic environment Jetblue Airways has struggled to respond to the nimble upstart competition. Jetblue Airways has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study JetBlue Airways: Starting from Scratch, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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 JetBlue Airways: Starting from Scratch HBR case study mentions - Jetblue Airways 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.
Lack of clear differentiation of Jetblue Airways products
– To increase the profitability and margins on the products, Jetblue Airways needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Jetblue Airways 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.
Skills based hiring
– The stress on hiring functional specialists at Jetblue Airways 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study JetBlue Airways: Starting from Scratch, is just above the industry average. Jetblue Airways needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities JetBlue Airways: Starting from Scratch | 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 JetBlue Airways: Starting from Scratch are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Jetblue Airways is facing challenges because of the dominance of functional experts in the organization. JetBlue Airways: Starting from Scratch 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Jetblue Airways can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Jetblue Airways 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 JetBlue Airways: Starting from Scratch - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jetblue Airways to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Airways can use these opportunities to build new business models that can help the communities that Jetblue Airways operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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 Airways can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Jetblue Airways 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.
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 Airways 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.
Learning at scale
– Online learning technologies has now opened space for Jetblue Airways 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 Jetblue Airways in the consumer business. Now Jetblue Airways can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Jetblue Airways 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Jetblue Airways can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Jetblue Airways can develop new processes and procedures in Leadership & Managing People 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.
Better consumer reach
– The expansion of the 5G network will help Jetblue Airways to increase its market reach. Jetblue Airways 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.
Threats JetBlue Airways: Starting from Scratch External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study JetBlue Airways: Starting from Scratch 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 Jetblue Airways in the Leadership & Managing People sector and impact the bottomline of the organization.
Environmental challenges
– Jetblue Airways 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 Airways can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study JetBlue Airways: Starting from Scratch, Jetblue Airways may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Jetblue Airways in the Leadership & Managing People industry. The Leadership & Managing People 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.
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. Jetblue Airways 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.
Stagnating economy with rate increase
– Jetblue Airways 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.
Shortening product life cycle
– it is one of the major threat that Jetblue Airways is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Jetblue Airways with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Jetblue Airways has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Jetblue Airways needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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 Airways needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Consumer confidence and its impact on Jetblue Airways 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.
High dependence on third party suppliers
– Jetblue Airways 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.
Weighted SWOT Analysis of JetBlue Airways: Starting from Scratch 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 JetBlue Airways: Starting from Scratch 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 JetBlue Airways: Starting from Scratch 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 JetBlue Airways: Starting from Scratch 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 JetBlue Airways: Starting from Scratch 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 Airways needs to make to build a sustainable competitive advantage.