JetBlue – Individual Case Analysis Brian Lowry

JetBlue is a company worth noticing. It has had massive amounts of success since its

inception despite being in an industry plagued by failure. This success is demonstrated by the

fact that they continue to make a profit year after year even in 2002 and 2003 when the industry

lost billions of dollars. The all-encompassing reason for this accomplishment is that JetBlue

started out with a clearly defined set of values and all of its corporate strategies have stayed true

to these values over time. These values include safety, caring, integrity, fun, and passion. By

remaining loyal to these values, JetBlue has been able to establish several key competitive

advantages. These include having a low cost structure, happy, hardworking employees, an

effective organizational structure, and low fares and high service quality.

The low cost structure stems from taking care of their employees and is a good example

of the Strategy variable in the 7-S Model. All other major airlines have been faced with the

obstacle of dealing with the unionization of their employees. This is an external factor that

JetBlue has taken advantage of by tending to the specific needs of their employees so that they

do not have a reason to unionize. This has given JetBlue a leg up in keeping costs low and has

allowed them to decrease their fares in comparison to their competitors.

The employees themselves are also a competitive advantage for JetBlue. This is because

not only do they take care of the basic needs of employees such as competitive pay and benefits,

but they also work to make their employees as effective as possible. JetBlue does this by sharing

their values in an orientation when the employees first start at the company. This includes

explaining the differences between JetBlue and its competitors as well as industry economics.

JetBlue does this to ensure that all of its employees, not matter what position, understand how

the company makes money and how the core values and strategies fit into everything they do.

JetBlue also encourages open communication with monthly “Pocket Sessions” and anonymous

online surveys from crewmembers. These serve as a checks and balances system and ensure that

the company maintains their values throughout all levels of employment. After orientation and

initial training an employee is able to continue developing their skills through “leadership

development programs” or “JetBlue University.” By focusing on their employees in these ways,

JetBlue will maintain a devoted staff who doesn’t just work hard but also advertises these values

to the customers and other employees. This is especially important for an industry in which

employees come face to face with customers on a regular basis and are examples of how JetBlue

does well in the Staff, Shared Values, and Style variables of the 7-S Model.

The structure of the company is something that JetBlue also focuses on. By having a flat

organizational structure they remain flexible and implementation of key decisions can be done

quickly and easily. Being smaller than its competitors, JetBlue has been able to maintain this

structure and it has given them the advantage of added flexibility.

JetBlue’s primary focus is to have low fares and high quality at the same time. In the 7-S

Model, this would describe one of JetBlue’s strongest Skills. This is also a good example of the

Systems variable in the 7-S Model because this is a result of several systems within the company

working together. First, you have the HR systems in place that take care of the employees,

keeping them from unionizing which saves the company money. Other systems such as the

standardization of tools, equipment, and practices throughout the company due to only using one

type of airplane also saves money. These low costs combined with a system used to sell tickets

directly to the customer allow JetBlue to price their fares extremely low. This is the primary

forced used to attract new customers. Going back to the employees, by emphasizing a strong

positive corporate culture and by keeping the employees satisfied, they will treat the customers

well. This combined with other service features such as in-flight TV and the TrueBlue program

give customers the feeling of quality service and is the primary reason customers recommend

JetBlue to their friends and family. By using this competitive advantage while adopting the

strategy of targeting underserved and overpriced markets, JetBlue has been able to see rapid

increases in their net income year after year.

Just as described by the 7-S Model, all seven variables are interconnected. JetBlue has

has focused on doing each individual variable well and in turn each area has helped to elevate the

other areas as well. This is very similar to the Balanced Scorecard concept. Financial

performance, customer satisfaction, internal business process, and organizational capacity are all

tied together by the company’s vision and strategy. By sticking to their core values and taking

care of all four areas, the entire company is elevated together. This is why JetBlue has been so

successful. Going forward however, may be a different story. JetBlue has been able to capitalize

on the fact that it has been much smaller than its competitors. This has made it easy for JetBlue

to keep costs low and maintain flexibility. As the company continues to grow there will be many

obstacles to face. One of the advantages that JetBlue has had is only having one type of aircraft.

This is about to change and it will be more costly to have standby planes and needed equipment

at the ready. With more employees it will become challenging to communicate the desired

culture to the entire staff. The company is off to an excellent start and has many tools at its

disposal. In order to remain successful as it continues to grow it will have to continue

emphasizing its core values. JetBlue should commit to not lowering its standards when hiring or

training new employees. Additionally, holding itself to the low price-high quality standards that

it has now will ensure continued demand for its service. JetBlue is just taking off with an

excellent opportunity and if it stays true to its core principles the sky will be the limit.