JetBlue Airways 10-K annual report analysis

¶ … 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?

The strategy for JetBlue's success in the marketplace is described in the company's 10-K/A filling. Their goal is to 3 establish JetBlue as a leading low-fare, low-cost passenger airline by offering customer's high-quality customer service and a differentiated product.' (JetBlue,2005) By doing this, they are trying to 3 stimulate market demand while maintaining a continuous focus on cost-containment and operation efficiencies.' (JetBlue, 2005) Based on the filing, JetBlue relies on product leadership customer value proposition. The four key elements to their strategy are:

Stimulate demand with low fares

Emphasize low operation costs

Offer point to point flights to underserved and/or overpriced large markets

Differentiate our product and service (JetBlue, 2005)

Due to the strategies, JetBlue has been able to grow largely as a company and become one of the leading airlines which focus on customer satisfaction at a low operating cost.

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.)

As in any business, there are risks involved in which could threaten the company's ability to satisfy stockholders expectations. For JetBlue, they operate in an extremely competitive industry and must be able to remain a leader in their industry to ensure they are continuing to satisfy stockholder expectations. Some of the risks are items such as; maintenance costs will increase as the fleet ages, not being able to attract and/or retain qualified personnel at reasonable costs, or not being able to keep low costs for customers. These are just some of the items that could affect their ability to satisfy their stockholders.

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?

Unit-level activities are 3 performed each time a unit of a product is produced. The number of times unit-level activities are performed varies according to the number of units produced.' (principles of accounting). This concept can be applied to airlines because things such as fuel cost and the additional services given to the passengers. To handle the rising in fuel prices, JetBlue has offered promotional tickets for passengers who have no luggage. The theory with that is that the more passengers with luggage, the more fuel used due to the weight of the plane. So to get around fuel prices, reward individuals for choosing to fly without luggage. JetBlue also has chosen to upgrade their aircraft to avoid any risks associated with the disruption of their services.

How can the concept of batch-level activities be applied to an airline? What are two examples of batch-level activities for JetBlue? What steps has JetBlue taken to manage these batch-level activities more efficiently?

Batch-level activities 3 are costs incurred every time a group (batch) of units is produced or a series of steps is performed. Purchase orders, machine setup, and quality tests are examples of batch-level activities.' (CliffsNotes). This concept can also be applied to an airline. Two examples of batch level activities for JetBlue are the flight training crew and the company's fleet. As stated in the above scenario with the unit-level activities, JetBlue just upgraded all of their fleets to the Embracers E190. By upgrading and having the same fleet all around, it is going to reduce the maintenance and training complications for the fact that they do not have several types of aircrafts. This is going to ensure they will not need several training sessions in which could wind up being a waste if they had to keep replacing the fleet. JetBlue simply organizing so that they whole company has the same fleet all around has ensured they are able to manage the batch level activities more efficiently.