1. Despite its initial success, why was JetBlue unable to sustain a blue ocean strategy?

I feel that due to its failure to strike a balance between cost leadership and differentiation,
JetBlue was unable to maintain its blue ocean strategy. It was unable to effectively manage the
trade-offs between great customer value and lower expenses, although initially offering both. It
so lost its competitive advantage and started to lag behind industry standards such as the Dow
Jones U.S. Airlines Index.

2. The Wall Street Journal asked JetBlue's chief commercial officer, Marty St. George, "What is
the biggest marketing challenge JetBlue faces?" His response: "We are flying in a space where
our competitors are moving toward commoditization. We have taken a position that air travel is
not a commodity but a service business. We want to stand out, but it's hard to break through to
customers with that message."46
a. Given St. George's statement, which strategic position is JetBlue trying to accomplish:
differentiator, cost leader, or blue ocean strategy?-Explain.

According to Marty St. George's remarks, JetBlue wants to stand apart from the competition. In
contrast to rivals who treat air travel as a commodity, he highlights JetBlue's perspective on the
industry as a service provider. This emphasis on creating distinctive value through improved
in-flight experiences, better customer service, and an all-around superior service offering is
consistent with a differentiation strategy, which aims to differentiate oneself from competitors by
providing value to customers that goes beyond cheap prices. JetBlue is attempting to make a
name for itself by emphasizing its services over its price.

b.
Which strategic moves has the team around
CEO Robin Hayes put in place, and why? Explain whether they focus on value creation,
operating costs, or both simultaneously. Do these moves correspond to St. George's
understanding of JetBlue's strategic position? Why or why not?
Explain.

JetBlue has prioritized cost containment and value creation under CEO Robin Hayes. They
reduced expenses by charging for checked luggage and utilizing more fuel-efficient aircraft,
while simultaneously enhancing in-flight experiences with new Airbus aircraft and expanding
foreign routes. By increasing customer value and controlling operating costs, these actions
support St. George's differentiation strategy and strengthen JetBlue's standing as a
service-focused airline.

3. Consider JetBlue's value curve in Exhibit 6.12. Why is JetBlue experiencing a competitive
disadvantage? What recommendations would you offer JetBlue to strengthen its strategic
profile? Be specific.
JetBlue's value curve in Exhibit 6.12 suggests that the company is squeezed from above and
below, offering more services than low-cost airlines, but still falling significantly short of legacy
carriers on key items such as lounges, meal service, and international routes. A
middle-of-the-road positioning is often at a competitive disadvantage as a player. For instance,
JetBlue cannot compete on price with the low-cost carrier or service with the legacy carriers. But
in building a more strategic profile, JetBlue needs to double down on cost leadership through
further steps to streamline operations and lower prices or differentiate its services by offering
amenities in-flight and adding international routes. Corresponding to the latter strategy is
allowing strengths of customer service and reliability to establish a niche. Such a clearer focus
would remove JetBlue from the strategic "no man's land" between cost leadership and
differentiation.

4. JetBlue CEO Robin Hayes is contemplating adding international routes, connecting the U.S.
East Coast to more European destinations. Would this additional international expansion put
more pressure on JetBlue's current business strategy? Would it require a shift in JetBlue's
strategic profile? If a strategic repositioning is needed, in which direction should JetBlue pivot?
Explain.

JetBlue’s current business strategy combines elements of cost leadership and differentiation,
which has been difficult to sustain. Expanding into European markets could intensify the
pressures that JetBlue already faces for several reasons. International costs could be more
complicated and expensive. They will have to compete with well-established legacy carriers.
JetBlue has already made moves that suggest difficulties in balancing differentiation and cost
leadership which will only be amplified if going into that new market. A shift would have to
happen to keep up with the competition while fixing some of their weaknesses. JetBlue could
attempt a targeted hybrid strategy, selectively expanding internationally while maintaining its
focus on cost-efficient yet high-value offerings. Therefore, JetBlue could focus on a limited
number of high-demand, profitable international routes rather than try to rapidly expand across
multiple destinations, biting off more than they could chew. This allows the airline to capitalize
on the profitability of specific international routes while avoiding over-expansion, which could
hurt the brand or overwhelm its expenses. Domestically, JetBlue could focus on regaining that
lost market share and profit, while making international flights a niche, creating a high-margin
business segment.