JetBlue Airways: company overview and operations

JETBLUE

The best description of JetBlue's business level strategy and the way the company successfully implemented both differentiation and cost leadership is described in an interview with Gareth Jones, VP, Corporate Communications at JetBlue. First of all, the company is an airline company that offers incredibly cheap services to its segment of consumers. However, as Gareth Jones is keen to emphasize, this is not enough, simply because the other companies will soon drive their prices to a lower limit as well. As in any other industries, the key is to offer something extra, something that will make the customers fly JetBlue instead of another low budget airline company. And this is what differentiation is about. As Gareth Jones explained, "we differentiated the product above and beyond price," because the idea is not to offer something less for the money, but to offer something different.

The fact that the airline industry is one of the ten most hated industries created the appropriate premises for JetBlue to try and change this conception. This meant offering services that could be compared to any in the industry, with better and more comfortable planes first of all. The service itself was important and less costly: simply be polite, make the customer feel pleased with the service he has received in exchange for his money.

One may wonder how the company managed to apply the differentiation strategy at the same time with the cost leadership. The answer is quite simple: a strong capital base that allowed them to invest without necessarily looking for a short-term profit. This meant not only that they could sustain the low- pricing strategy, but also that they were able to resist low-price attacks from the larger companies (who could afford price cuts) and were able, at the same time, to spend enough time building a strong and competitive brand.

So, in a few words, differentiation ranged from quality to comfort and to responsiveness to customer. Combined with the fact that all these services are offered at extremely competitive prices, the company has a strong position on the market.

2. It is quite obvious that the company managed to implement a unique strategy which allowed it to prosper on the market and to fight the large airline companies. The question we need to ask, however, is whether it actually has a competitive advantage. In my opinion, it does.

I am asserting this provided with the elements we have so far. In the beginning, the company was able to implement its differentiation- low cost strategy in order to attract its first customers and to build the brand's credibility. This was done using strong investments in the company's fleet and in innovations.