Research and Application

Research and Application 7-20

Dan Mahaffey

BUS630- Kuhn

Week 3 Assignment 1

3/7/2011

* 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?

A review of JetBlue’s 10-K/A(JetBlue 2005) demonstrate that they focus on product leadership with customer value proposition. It is clear to see that JetBlue had the highest load limits in the industry and that they have a strong customer focus demonstrated by their statement that they “aim to provide high quality service coupled with lower fares” showing their customer value proposition.

* 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.)

Similar to all airline companies JetBlue must contend with the volatile variable pricing of their highest cost commodity which is required for almost all revenue generation; fuel costs (Alexander 2011). An unexpected rise in fuel costs, such as that associated with current events in Libya (Alexander 2011) will reduce JetBlue’s earnings per share causing them to be diluted.

Aside from the volatilility of fuel costs, JetBlue, like most other global corporations, will face a risk associated with using the US dollar. As the value of the dollar rises and falls JetBlue will want to mitigate their risks by locking in pricing and exchange rates to their advantage in future business dealings.

* How can the concept of unit-level activities be applies to an airline?  More specifically, what are two examples of unit-level activities for JetBlue?  What steps has JetBlue taken to manage these unit-level activities more efficiently?

There are a number of revenue streams and operations JetBlue uses which...