BUSI 400: Strategic External Analysis of JetBlue Airlines

This report presents an external environment analysis of JetBlue Airlines, examining the airline's strengths, weaknesses, opportunities, and threats (SWOT) and applying Porter's Five Forces model to assess the competitive landscape. The SWOT analysis highlights JetBlue's strong brand identity, customer satisfaction, and operational cost issues. The Porter's Five Forces analysis assesses the threats of new entrants, substitute products, rivalry among existing firms, and the bargaining power of buyers and suppliers. The analysis includes references to academic literature and industry reports to support its findings, providing a comprehensive overview of JetBlue's strategic position within the airline industry and addressing the assignment brief's requirements for a detailed external analysis.

Running head: MARKETING
Marketing
Name of the Student
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Author note

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Table of Contents
External Environment Analysis.......................................................................................................2
SWOT Analysis...........................................................................................................................2
Porter’s Five Forces Model Analysis..........................................................................................4
References........................................................................................................................................6

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External Environment Analysis
The respective section throws light in understanding the external environment analysis of
JetBlue Airlines which is one of the American low cost airlines. The external environment plays
a vital role in understanding the possible business opportunities or threats which can be affecting
the business of the organization in the competitive business environment (Huang, 2019). In case
of JetBlue, the external environment includes SWOT analysis and Porter’s Five Forces model
analysis which will be including the different kinds of competitors and threat of rivalry which
will be impacting the business negatively.
SWOT Analysis
Strengths
Strong Business and Brand identity- It is the first aspect of JetBlue wherein the caring,
integrity and the safety of the customers are the main aspect of JetBlue. JetBlue makes sure that
all these factors are engraved in the entire story of the brand. The Instagram blog of JetBlue
which is named “Out of The Blue” assists in sharing stunning pictures along with stories of the
working environment which is effective in attracting large number of customers (Inyang & Egor,
2017).
Customer related Satisfaction- It is the other aspect of JetBlue wherein it is considered to
be the low-cost airlines which provides the different services such as free luggage, free
cancellation as well as free change fees (Novikov, 2018). There is in-flight entertainment along
with complimentary beverages which is the efficient aspect for JetBlue to impress their
customers.

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Weaknesses
Less Number of International Destinations- It is the first aspect of JetBlue wherein they
serve only 101 cities and it includes Caribbean as well as North American destinations.
However, the airlines claims that the longer international routes will be increasing to complexity
and additional charges will be incurred that can affect their effectiveness (Novikov, 2018).
High Cost Related to Operations- It is the other weakness of JetBlue wherein the
organization has been setting ambitious targets and the unit’s growth related cost is less than
1%from 2018 to 2020 (David & David, 2016). The repair and maintenance costs of JetBlue
airlines have increased to 17% which created a weakness for the airlines.
Opportunities
Expansion in New Markets- It is the crucial opportunity for JetBlue as in the different
recent kind of advertisements, the JetBlue airlines seem to be pointing towards Europe with
A321LR option. Moreover, the CEO and chairpersons of the company JetBlue feels that there
are high levels of opportunities available for them in Latin America and Central America which
can be creating positive impact on growth prospects of the company (Kimani & Ogutu, 2018).
Introduction of New Airplanes- It is the other opportunity wherein airline officials have
confirmed the fact that they had agreement with Airbus for bringing thirty more A321 aircraft to
their fleet over span of more than seven years.
Threats
Rise in the prices of fuel- Due to rise in prices of fuel, the company has been increasing
the prices and bill of fuels and it impacts their business tremendously (Stauss & Seidel, 2019).

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Strong Level of competition- It is the last threat that can be impacting the effectiveness
of the company and it will be impacting the growth of JetBlue in competitive business
environment (Stauss & Seidel, 2019). There are competitors such as British Airways or Qantas
Airways which can be impacting their business.
Porter’s Five Forces Model Analysis
Particulars Analysis
Threat of New Entrants It is Low as there is high capital cost required for
entry and the brand image and loyalty maintenance
are the two other crucial elements which can be
impacting profitability of the firm negatively
(Novikov, 2018)
Threat of Substitute Products It is medium as for the short kind of flight; the
alternative can be the automobile and other means
of transportation. Moreover, switching costs of the
other airlines is low (Novikov, 2018)
Rivalry among existing firms It is high and intense and it can be impacting the
profitability negatively. There is high level of price
competition in the respective industry which is
offering the customers with various offers such as
low cost fares and it is impacting the sales of
JetBlue Airlines (Novikov, 2018).
Bargaining Power of Buyers It is medium to high as the internet provides
customers with different options and search for
airlines which provides low fares

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There are different airplane companies which offers
the customers with the similar kind of experience
and with low cost fares (Kimani & Ogutu, 2018)
Bargaining power of suppliers It is high as Airbus and Boeing are the two major
suppliers in Airline companies and it allows them
to have the entire power of suppliers in the airline
industry (Kimani & Ogutu, 2018)
Airline related employees are unionized which lets
them have the entire power of the suppliers

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References
David, F., & David, F. R. (2016). Strategic management: A competitive advantage approach,
concepts and cases. Pearson–Prentice Hall.
Huang, Y. (2019, December). Strategic Environment Analysis of Logistics Enterprise based on
SWOT-PEST-Michael Porter's Five Forces Model--Taking SF Express as an Example.
In 2nd International Symposium on Social Science and Management Innovation (SSMI
2019). Atlantis Press.
Inyang, B. J., & Egor, F. E. (2017). The relevance of strategic analysis and control in managing
corporate organizations to gain competitive advantage. The Business & Management
Review, 9(2), 253-253.
Kimani, G. K., & Ogutu, M. (2018). The Effect Of External Environment And Firm Size On The
Relationship Between Knowledge Management And Competitive Advantage. European
Journal of Business and Strategic Management, 2(9), 71-84.
Novikov, S. V. (2018). Strategic analysis of the development of high-technology manufacturing
facilities. Russian Engineering Research, 38(3), 198-200.
Stauss, B., & Seidel, W. (2019). Strategic Planning of Complaint Management. In Effective
Complaint Management (pp. 69-84). Springer, Cham.