Jet Blue Airays

Jet Blue Airways

Glenda Reese

Managerial Accounting BUS 630

Hong Zhao

November 8, 2012

Jet Blue Airways

(1) What is JetBlue’s strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion? According to the Securities and Exchange Commission (SEC) (2005), JetBlue’s strategy is to establish JetBlue as a leading low-fare, low-cost passenger airline by offering customers’ high-quality customer service and a differentiated product. They strive to offer low fares that stimulate market demand while maintaining a continuous focus on cost-containment and operating efficiencies (pp.1-2). The company relies primarily on an operational excellence customer value proposition. The evidence that supports this conclusion is (1) JetBlue’s key elements of their strategy, (2) emphasizing low operating costs, and (3) the offer of point-to-point flights to underserved and/or overpriced large markets (p.2).

(2) What business risks does JetBlue face that may threaten the company’s ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks? (Hint: Focus on pages 17-23 of the 10-K/A). Risks JetBlue faces that may threaten the company’s ability to satisfy stockholder expectations, according to SEC (2005, March 8), include (1) operating in an extremely competitive industry; (2) failing to successfully implement the growth strategy; (3) having a significant amount of fixed obligations and incurring significantly more fixed obligations, which could harm the ability to meet the growth strategy and impair the ability to service their fixed obligations; (4) increased maintenance costs as the fleet ages; (5) being unable to attract and keep qualified personnel at reasonable costs or failing to maintain the company...