JetBlue Airways SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by JetBlue Airways managers to do a situational analysis of the firm . It is an important technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) JetBlue Airways is facing in its current business environment.

The JetBlue Airways is one of the leading companies in its industry. JetBlue Airways maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis a highly interactive process and requires effective coordination among various departments within the organization such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework enables an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the JetBlue Airways to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
JetBlue Airways swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect JetBlue Airways strengths, and eradicate its weaknesses.

Step by Step Guide to JetBlue Airways SWOT Analysis

Strengths of JetBlue Airways – Internal Strategic Factors

As one of the leading companies in its industry, JetBlue Airways has numerous strengths that help it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of JetBlue Airways are –

  • Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
  • Strong distribution network – Over the years JetBlue Airways has built a reliable distribution network that can reach majority of its potential market.
  • High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
  • Superb Performance in New Markets – JetBlue Airways has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
  • Strong Free Cash Flow – JetBlue Airways has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Highly successful at Go To Market strategies for its products.
  • Automation of activities brought consistency of quality to JetBlue Airways products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Good Returns on Capital Expenditure – JetBlue Airways is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

Weakness of JetBlue Airways – Internal Strategic Factors

Weakness are the areas where JetBlue Airways can improve upon. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though JetBlue Airways is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that JetBlue Airways is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • The profitability ratio and Net Contribution % of JetBlue Airways are below the industry average.
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, JetBlue Airways needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
  • Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of JetBlue Airways
  • High attrition rate in work force – compare to other organizations in the industry JetBlue Airways has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.

Opportunities for JetBlue Airways – External Strategic Factors

  • Government green drive also opens an opportunity for procurement of JetBlue Airways products by the state as well as federal government contractors.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided JetBlue Airways an opportunity to enter a new emerging market.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as JetBlue Airways to increase its profitability.
  • The new technology provides an opportunity to JetBlue Airways to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
  • The market development will lead to dilution of competitor’s advantage and enable JetBlue Airways to increase its competitiveness compare to the other competitors.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for JetBlue Airways to capture new customers and increase its market share.
  • Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
  • Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for JetBlue Airways in other product categories.

Threats JetBlue Airways Facing - External Strategic Factors

  • New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
  • The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
  • No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for JetBlue Airways   in those markets.
  • As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
  • Liability laws in different countries are different and JetBlue Airways may be exposed to various liability claims given change in policies in those markets.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .

Limitations of SWOT Analysis for JetBlue Airways

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

  • Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
  • SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
  • The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of JetBlue Airways
  • SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
  • SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Weighted SWOT Analysis of JetBlue Airways

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis JetBlue Airways managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of JetBlue Airways

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

  • M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
  • A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
  • O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
  • L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
  • R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)