Group Presentation For Strategic

Management
oRamisa Saiyara
oSaad Md Nafiz Imtiaz
oFahmid Ferdous
oRizwanul Haque Chowdhury
What Is Recession?
A significant decline in activity across the economy,
lasting longer than a few months. It is visible in
industrial production, employment, real income and
wholesale-retail trade.

Why Recession Happens?
Low confidence
level
Word of mouth
Assignable cause
Word of mouth:
Low confidence level
of millions of
consumers and
producers after they
hear may job
cuts,demand coming
down, companions,
bankruptcy etc.
Assingnable cause:
Band incidence happening ,
example
1. September 11 terrorist
attack in USA.
2. International airport block
in Thailand.
3. Mumbai attack in India
Series of such incidence
leading in to war
Incidences of War that occurred such
situations as in:
Created fear in people
People cancelled their travel plans
Resulted in low occupancy rates
Airline industries badly hit
Airline industries offer discounts, coupons to attract
people but no improvement occurred
Airlines started cost reduction activities
How to recover from Recession
It is unhealthy for any nation to be on recession; So Government will take certain
counter measures to eliminate or reduce the effect of recession for turnaround.
Important Point:
Today, it is a market economy
Producers can
produce and
sell at their
prices
Consumers can
decide to buy
or not
Government has two plans
Fiscal
Policies
Monetary
Policies
I ts all about J et Blue
David Neelemen founded the company in February 1999.
Jet Blue is an American Low-Cost Airline.
Jet Blue serves 79 destinations in 24 states in U.S.A. and also other 30
foreign countries.
The carrier offers one class service with leather seats, satellite TV
from DIRECTV, satellite radio from XM, and movies.
It owns one subsidiary, in-flight entertainment system developer LiveTV.
Jet Blues Recession Outcome
Lay off people.
Low or no income to
spend & buy goods.
Demand for other
goods come down.
Reduce number of
flights.
In flights meal
reduced.
Meals supplying
company got the hit.
Catering company
now, lay off people.
Salary reduction.
Become careful due to
fear of loss of jobs.
Started saving money
instead of spending.
Demand for other
goods come down.
Segmentation, Market and Positioning
People for
business
travel
Cargo
services
Charter
airways
Leisure
travel /
holiday
Leisure travel/
holiday
People for
business travel
Porters Five Forces
Analysis
Threats of new entrants:
Low product differntiation in basic services.
Low switch costs for Customers & hogh
switch costs for Airlines.
Open sky policy allows foreign entrants.
Very high setup costs.
Increasing fuel prices.
Bargaining power of suppliers:
Switch cost to others supplier is high.
Low bargaining power with airlines.
Scope for suppliers to forward integrate.
Competitive Rivalry:
Very little product defferntiation in
services.
High bargaining power of suppliers.
No sense of brand loyalty amongst
customers and can easily switch to others
Airlines.

Bargaining power of buyers:
Switch costs are minimal for buyers.
No scope for backward integration.
With high number of buyers growth
opportunities are also high.
Availablity of Substitutes:
Travel by Airlines a status symbol.
Since switch to low costs between the
airlines , threat of substitute is high.
Indirect substitutes are railways.
Adoption of a Blue Ocean Strategy
Jet Blue- Point of Reference
Make the Competitions Irrelavant
The Strategy Canvas of The Short Haul Airlines Industry
Competitive Advantage
Value Resources
Costly to
imitate
Easy to
substitute
Human
Resources
Brand Equity
Social Capital
Employee
Relationship
Fuel
Aircrafts High
High
High
High
High
High
No
No
Yes
Yes
No
No
No
No
No
No
No
No
Jet Blues
Strategy
One type of Airplane Brand new Airbus
A320s
One type of fare Low
One type of customer service
Professional
One type of route Serving destinations
within U.S.A.
One way to deal with delays and
cancellations Honestly

Jet Blue International Swot
Strengths
Domestic Service
Business Model
High Brand
Awarness
Cost Leadership
Continoius
Improvements
Image
Weaknesses
Lack of
Experience
Less
differentiaon
Short lived
innovations
Billing systems
Lack of product
depth


Opportunities
Freight market
Chartered
services
Gaining share


Threats
Increasing
labour costs
Global dynamics
Scarcity of
pilots
Government
policies
Is Jet Blue Sucessful?
Fastest Growing Domestic Airline Co.
When Jet Blue entered the arena they had to compete with mature competitrs;
recession world-over & spiralling cost due to sharp increase in crude oil prices.
Only Airline Co. to make a profit
Growing market share (No. 2 currently)

Jet Blue Airlines has been on of the
Airlines which has been eating away
market share from it competitors