The main competitors for JetBlue include the Southwest Airlines, Virgin America, and Sun Country Airlines (Tan, 2016). The Southwest Airline is the world largest low-cost carrier that has its headquarters in Dallas, Texas. It commands more than 40% of the domestic market share (Mumbower, Garrow, & Higgins, 2014). The Virgin America is also a formidable player in the industry coming third in terms of market share just after the JetBlue. Its features include the provision of high-quality services and low-fare. Sun Country Airlines operates both charter and scheduled flights to various destinations across the United States, Mexico, Costa Rica, and the Caribbean. The mentioned airlines have unique modes of operation, which enable them to command a formidable share of the market, and pose serious competition to JetBlue, as each one tries to remain relevant in the quest to meet the consumer demand (Tan, 2016).
It is worth noting that in the face of competition it is futile to engage in price wars, particularly by an incumbent airline like the JetBlue. Evidence shows that such an engagement is not beneficial even in the face of serious threat from low-cost rivals. Additionally, pricing below cost is illegal in the United States. Charging below the cost means that the airline will not realize any profits in the long-term (Mumbower eta al., 2014). Therefore, in a case where JetBlue were to occupy the model by the Southwest Airlines (industry leader) they may not be in a position to match the price because the composition or the individual elements of the model bear little weight in comparison to the interaction of the said elements.
To remain relevant it is imperative for the airline to differentiate their products. Differentiation normally takes many forms, which may include the design of cool products, continuous innovation, creating unique products, brand community, and application of various sale experiences. In order to improve effectiveness and efficiency, JetBlue should not use any strategy in isolation. For example, for the provision of the personalized television sets to work in the contemporary setting, the company should keep on introducing new products, upscale the brand image, and invest more money in diversifying its services probably by offering free Wi-Fi as they are currently doing. Redesigning the seats to make them more comfortable will certainly work for the airline. Closely related to the differentiation strategy, is the fact that the company then needs to persuade the clients to pay for the additional services (Mumbower et al., 2014). Customers are normally willing to pay the extra amount in a case when there is the improvement of services. Charging a bit more for products of higher design and quality attracts the customers. The final condition for effective differentiation is that JetBlue should bring the benefits and costs in line before implementation. For example, HP restructured for years, but is currently at par with Dell. The implementation of the strategies may take time, but the benefits are eventually realized.
The company should consider applying or dealing with dual strategies. In the United States, the low-price customer has greater potential as it forms a very large market segment (Mumbower et al., 2014). Because of the vast years of experience in the industry and the abundance in resources, JetBlue has the ability to replicate cut-price operations. Additionally, the business models by other recent entrants such as Virgin America and Sun County Airlines are relatively simpler. The low-cost operations have the ability to offer the clients the small number of products that are cost-efficient to the company. Towards this end, the company should have a subsidiary. Creation of the subsidiary helps in cost-effective management of the investment where the parent company and the subsidiary earn profits.
The suggested two-pronged approach requires the company to use a unique brand name. For example, the company may choose the term "First Direct" or "Client First" to describe its new service brand. It is imperative to note that a clear or distinct brand communicates airline's objectives or services and the commensurate low prices to the lower prices. Conventional wisdom dictates that the company should house its subsidiary separately because the sources of the competitive advantage for the parent company are different. As suggested, by creating an independent unit, JetBlue has the freedom of coming up with a start-up operation with distinct systems, structures, values, and staff. The independence of the subsidiary will ensure that low-cost operation is more accountable with as little interference as possible and that the subsidiary does not cannibalize the sales. However, in the case of the low-cost carriers, the creation of the independent units is necessary, but not sufficient for the application of a dual strategy. The two-pronged strategy is mainly effective only when the low-cost operation is offensive from the onset in the quest to make money, and not as a defensive gimmick to hurt rivals. Essentially, if JetBlue creates a subsidiary, it should permit it to the new and old businesses to compete favorably with each other and include the cannibalizations approximates into the financial projections and the business models.
JetBlue should consider using new technology as a way of gaining an edge over the other players in the industry such as Southwest Airlines, Virgin America, and Sun Country Airlines. The application of technology that include cloud devices, the Internet of Things (IoT), and Big Data will certainly give the airline the much-needed competitive edge by improving their operations and boosting the passenger experience. In the contemporary setting, the passengers are highly tech-savvy than before. Approximately 80% of the passengers carry their smartphones, meaning that providing them with access to the internet will go a long way in boosting their experience, and subsequently inspire their loyalty to the company (Arikan, Deshpande, & Sohoni, 2013). The fact that the airline has began capitalizing in the tech-savvy passengers notwithstanding, there is plenty more technology on the offing that the company may still employ to lure the clients and help the company to fly high. The technologies entail the ones that can help the management to analyze data or to meet them at the point of demand. The technologies that improve the efficiency of airline operations include geared turbofan engines and the satellite based internet (Yayla-Kullu, & Tansitpong, 2013).
The change and the adoption of technological advancements are really taking pace, and JetBlue should consider adapting accordingly in order to remain relevant in the eyes of the public. For example, in 2014, the Airbus introduced its all-electric E-Fan demonstrator type of aircraft (Armen, 2014). The company is already on the right track as far as the technology goes. In 2013, JetBlue teamed up with Boeing to invest in the start-up called Zunum at developing electric aircraft. The use of the electric planes will definitely deliver eco-friendly, quite, and hypersonic planes that will enable the passengers to reach their destinations fast (David, 2013). Additionally, such a design portends great efficiency in the use of fuel and greater levels of affordability for the clients due to low operating costs. JetBlue's investment in the biometrics will serve it well in ensuring efficiency (Wu, 2012). In early 2017, JetBlue announced that it invested a substantial amount in the development in a perfect facial recognition feature that would replace the tedious or time-consuming electronic or the paper boarding passes. If developed, the passengers will only have to stand in front of a designated camera and take a picture. The system will then match the photo to the Border Patrol and US Customs database (Escobar-Rodriguez & Carvajal-Trujillo, 2014). Such a system is efficient and could be used in the war on terrorism as well. The company could then combine the technology with the facial recognition for automated baggage system or the fingerprint recognition to supplement the automated check-in system. Delta Airlines currently uses the latter technology and it is proving quite efficient in terms of time and money.
The company should boost its connectivity and entertainment in-flight as a strategy to attract more clients and to maintain the existing ones (David, 2013). In the past, in-flight entertainment entailed of a movie beamed on an overhead projector or a book. Before that, there were the in-flight payphones. Currently, airlines have splendid seatback entertainment systems. JetBlue was one of the pioneers of the said entertainment system. As observed, such is fast becoming obsolete due to the invention or the application of the satellite-based internet connectivity remembered in the plane systems. The next trend in the aviation industry is streaming entertainment due to the increased use of the smart devices. To adapt to the ever-changing consumer tastes and preferences, JetBlue should adopt wireless streaming like American, Southwest, and Delta had done. It is worth noting that JetBlue currently offers high-speed internet (DaSilva & Trkman, 2014). Combining such with free texting in-flight will go a long way in improving its position in the industry. Essentially, adapting to the changing technology or the technological advancements will prove beneficial, profitable to the company.
The other strategy is switching to conquer, which entails changing from merely selling products to providing solutions, which ensures survival through the conversion of the existing products into commodities. Offering integrated package that that encompasses services and products has the propensity of expanding the market segments that are willing and have the capacity to pay extra for the additional services. In the long-term, the strategy permits the company to develop an understanding of the business processes that normally makes it difficult to shift to a rival service provider.
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