David Neeleman: Flight Path of a Servant Leader (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of David Neeleman: Flight Path of a Servant Leader (A)
David Neeleman, founder of JetBlue, is forced to confront a crisis in customer confidence following operational difficulties on February 14, 2007. This becomes a vital test of his leadership.
Authors :: William W. George, Matthew D. Breitfelder
Swot Analysis of "David Neeleman: Flight Path of a Servant Leader (A)" written by William W. George, Matthew D. Breitfelder includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Neeleman David facing as an external strategic factors. Some of the topics covered in David Neeleman: Flight Path of a Servant Leader (A) case study are - Strategic Management Strategies, Crisis management, Customers, Leadership and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the David Neeleman: Flight Path of a Servant Leader (A) casestudy better are - – there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, geopolitical disruptions, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of David Neeleman: Flight Path of a Servant Leader (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in David Neeleman: Flight Path of a Servant Leader (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Neeleman David, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Neeleman David 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 David Neeleman: Flight Path of a Servant Leader (A) can be done for the following purposes –
1. Strategic planning using facts provided in David Neeleman: Flight Path of a Servant Leader (A) case study
2. Improving business portfolio management of Neeleman David
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 Neeleman David
Strengths David Neeleman: Flight Path of a Servant Leader (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Neeleman David in David Neeleman: Flight Path of a Servant Leader (A) Harvard Business Review case study are -
Diverse revenue streams
– Neeleman David is present in almost all the verticals within the industry. This has provided firm in David Neeleman: Flight Path of a Servant Leader (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.
Sustainable margins compare to other players in Leadership & Managing People industry
– David Neeleman: Flight Path of a Servant Leader (A) firm has clearly differentiated products in the market place. This has enabled Neeleman David to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Neeleman David to invest into research and development (R&D) and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Neeleman David digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Neeleman David 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.
Analytics focus
– Neeleman David 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 William W. George, Matthew D. Breitfelder 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.
Cross disciplinary teams
– Horizontal connected teams at the Neeleman David 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.
Low bargaining power of suppliers
– Suppliers of Neeleman David in the sector have low bargaining power. David Neeleman: Flight Path of a Servant Leader (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Neeleman David to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Neeleman David is one of the most innovative firm in sector. Manager in David Neeleman: Flight Path of a Servant Leader (A) 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
– Neeleman David has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Neeleman David to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Neeleman David
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Neeleman David does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Neeleman David has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Neeleman David 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.
High switching costs
– The high switching costs that Neeleman David 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.
Training and development
– Neeleman David has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in David Neeleman: Flight Path of a Servant Leader (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.
Weaknesses David Neeleman: Flight Path of a Servant Leader (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of David Neeleman: Flight Path of a Servant Leader (A) are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study David Neeleman: Flight Path of a Servant Leader (A), in the dynamic environment Neeleman David has struggled to respond to the nimble upstart competition. Neeleman David has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Neeleman David is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study David Neeleman: Flight Path of a Servant Leader (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Neeleman David products
– To increase the profitability and margins on the products, Neeleman David needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Neeleman David 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.
Low market penetration in new markets
– Outside its home market of Neeleman David, firm in the HBR case study David Neeleman: Flight Path of a Servant Leader (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, William W. George, Matthew D. Breitfelder suggests that, Neeleman David 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
Neeleman David 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.
Slow decision making process
– As mentioned earlier in the report, Neeleman David 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. Neeleman David 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.
Interest costs
– Compare to the competition, Neeleman David 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.
Increasing silos among functional specialists
– The organizational structure of Neeleman David is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Neeleman David needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Neeleman David to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Neeleman David 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 - David Neeleman: Flight Path of a Servant Leader (A) should strive to include more intangible value offerings along with its core products and services.
Opportunities David Neeleman: Flight Path of a Servant Leader (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 David Neeleman: Flight Path of a Servant Leader (A) are -
Learning at scale
– Online learning technologies has now opened space for Neeleman David 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Neeleman David 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, David Neeleman: Flight Path of a Servant Leader (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.
Buying journey improvements
– Neeleman David can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. David Neeleman: Flight Path of a Servant Leader (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.
Leveraging digital technologies
– Neeleman David 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.
Using analytics as competitive advantage
– Neeleman David 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 David Neeleman: Flight Path of a Servant Leader (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Neeleman David to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Neeleman David 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
– Neeleman David 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 Neeleman David to increase its market reach. Neeleman David 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.
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. Neeleman David can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Neeleman David 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Neeleman David is facing challenges because of the dominance of functional experts in the organization. David Neeleman: Flight Path of a Servant Leader (A) 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.
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. Neeleman David can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Neeleman David in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Threats David Neeleman: Flight Path of a Servant Leader (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study David Neeleman: Flight Path of a Servant Leader (A) are -
Consumer confidence and its impact on Neeleman David 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.
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.
Shortening product life cycle
– it is one of the major threat that Neeleman David is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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, Neeleman David 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 David Neeleman: Flight Path of a Servant Leader (A) .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study David Neeleman: Flight Path of a Servant Leader (A), Neeleman David 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 .
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. Neeleman David needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Regulatory challenges
– Neeleman David 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 Leadership & Managing People industry regulations.
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 Neeleman David business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Neeleman David 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Neeleman David 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 Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Neeleman David can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Neeleman David
– 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 Neeleman David.
Weighted SWOT Analysis of David Neeleman: Flight Path of a Servant Leader (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 David Neeleman: Flight Path of a Servant Leader (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 David Neeleman: Flight Path of a Servant Leader (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 David Neeleman: Flight Path of a Servant Leader (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 David Neeleman: Flight Path of a Servant Leader (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 Neeleman David needs to make to build a sustainable competitive advantage.
