Jetblue 5 core values

Final Project Milestone One: JetBlue Airlines

Joshua Knowlton

Strategic Management: MBA 700-X2929

Instructor: Dr. Worden

January 12, 2014

Strategy and the Strategic Management Process at JetBlue Airlines

1. Describe the industry in which the company operates

The following statistics are provided for the airline industry on a global level:

-2000 Airlines operating more than 23,000 aircrafts, providing service to over 3700 airports

-In 2006, there were 28 million scheduled flight departures, carrying over 2 billion passengers

-Growth of world air travel has averaged approximately 5% per year over the past 30 years

-Annual growth in air travel has been about twice the annual growth in GDP

-Expected to double over next 10 – 15 years

The following statistics are provided for the airline industry in the United States:

-100 certificated passenger airlines operate over 11 million flight departures per year

-Carry over one‐third of the world’s total air traffic

-745 million passengers in 2006 creating over $160 billion in total revenues

-545,000 employees and over 8,000 aircraft operating 31,000 flights per day

-Commercial aviation contributes 8 percent of the US Gross Domestic Product, according to recent estimates

2. What is the company’s stated strategy? Is it a winning strategy?

According to the corporate website, JetBlue’s mission is to bring humanity back to air travel. Part of the strategy implemented by the airline is to continuously strive to make every part of customers’ experiences as simple and as pleasant as possible. As a result of this mission and strategy, JetBlue created the Customer Bill of Rights (JetBlue Airways, 2014). This seems to be a winning strategy for the airline as it continues to experience phenomenal growth as it works to become “America’s favorite airline.”

3. How does the company’s mission statement compare to those of its competitors?

When it first began operations in 1999 the mission statement for JetBlue declared that the airline would become “the premier value-based carrier in the Americas.” However, according to Peterson (2012), it did not take corporate leadership long to realize that not a single customer, crewmember, or shareholder would ever know what was meant by the phrase “premier value-based carrier”. Luckily for JetBlue the company decided not to go after a mission statement full of buzzwords or lofty virtue. The mission statement that was ultimately crafted is a simple, straight forward concept, which is to bring humanity back to air travel (JetBlue, 2014).

This mission statement seems to be much better than that of competitors. For example, the mission of Southwest Airlines is “dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and company spirit” (Southwest Airlines, 2013). This seems to be one of those mission statements that contains lofty virtue which JetBlue wanted to avoid.

4. How do the mission, vision, and values support strategic objectives or performance targets of your company?

JetBlue’s mission to “bring humanity back to air travel was created in part due to the airlines goal of becoming “Americas’ Favorite Airline,” a rallying cry that has been the airline’s inspiration for delivering customer-friendly flying (Peterson, 2012). Despite having a phenomenal mission statement, it does not seem that JetBlue has a formal corporate vision statement. A quote from then CEO David Neeleman was featured in the company’s 2005 Annual Report which serves as a summary of the airline’s vision: “As JetBlue continues to grow, we know our commitment to friendly, helpful service, combined with amenities customers want, will continue to keep JetBlue #1 in the eyes of our customers” (“JetBlue Annual Report,” 2005).

JetBlue’s values of safety, caring, integrity, passion, and fun also support strategic objectives and help the airline achieve its mission (JetBlue Airways, 2014). A huge part of not only the mission statement but the overall strategic objective of JetBlue is the Customer Bill of Rights, which was inspired by the values of the organization. The JetBlue Customer Bill of Rights details the specific compensation that customers will receive if they are inconvenienced due to certain delays or cancellations that are within the airline’s control (JetBlue Airways, 2014).

. Other strategic objectives which are important to JetBlue include:

-High quality service and product

-Low operating costs

-Brand strength

-Strength of their people

(JetBlue Annual Report, 2010)

5. What do the mission, vision, and value statements say about the company and its leadership?

Originally JetBlue substituted a formal mission statement with five core values of safety, caring, fun, integrity, and passion (Judd, 2003). These five values were deemed so significant that they are printed on every paper paycheck JetBlue issues (Effectively Managing, 2004). However, after Dave Barger took over as President and CEO in 2007, the ultimate mission became bringing humanity back to air travel, though these values were never abandoned. The leadership of Barger and founder David Neeleman helped to establish the culture at the airline which help it achieve its mission. According to Ford (2004), JetBlue’s culture embodies what it considers the crucial “three Ps” that are introduced by high-level offers to each new employee on his or her first day of orientation: people, performance, and prosperity. Founder David Neeleman stated in 2004 that he believes it is vital that everyone understands and believes in the corporate philosophy about how people should be treated (Ford, 2004). Additionally, JetBlue teaches its staff that each of the three Ps has measurements associated with it that helps JetBlue translate the essential core values into quantifiable terms (Effectively Managing, 2004).

References:

1. Columbia University (n.d.). Airline Industry Overview. Retrieved on 12 January 2014 from http://www.columbia.edu/cu/consultingclub/Resources/Airlines_Eric_Henckels.pdf

2. Effectively Managing Performance Measurement Systems (2004). JetBlue Case Study, 79-87. Retrieved on 12 January 2014 from Business Source Complete.

3. JetBlue Airways (2014). Our Company. Retrieved on 12 January 2014 from http://www.jetblue.com/about/

4. JetBlue Annual Report (2005). The JetBlue Experience. Retrieved on 12 January 2014 from http://www.jetblue.com/about/ourcompany/annualreport/2005/jbexp2.html

5. JetBlue Annual Report (2010). Retrieved on 12 January 2014 from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzg1MDQzfENoaWxkSUQ9Mzg2NzExfFR5cGU9MQ==&t=1

6. Judd, H. (2003). JetBlue Succeeds with Fun and Passion, Exec tells USU. Hard News Cafe Archive. Retrieved on 12 January 2014 from http://newscafe.ansci.usu.edu/archive/nov2003/1120_jetblue.html

7. Peterson, Joel (2012). Just What are You Trying to Say? Retrieved on 12 January 2014 from http://www.forbes.com/sites/joelpeterson/2012/11/13/just-what-are-you-trying-to-say/

8. Southwest Airlines (2013). Mission. Retrieved on 12 January 2014 from http://www.southwest.com/html/about-southwest/