Jet Blue Airways Case Study

Eric Porter Jet Blue Airways Case Study B283 Case Analysis Introduction: David was once a partner for Southwest Airline. He was even the runner up to be the president of the company. But due to his aggressive nature in his desire for innovation he was voted out of the company. He decided to take what he had learned from Southwest Airlines and merge it with his ideas to create his own airline. It would take lots of capital, but he knew that he wanted to use technology to drastically increase customer convenience and safety. “Based on his earlier industry experience, Neeleman had several ideas about how to start a new airline that would capitalize on technology and make the customer experience better than existing offerings.” Problem Analysis: -Major problems and challenges facing employees and organization: David knew all to well the hurdles in starting an airline business; under capitalization being the mother of them all. With all his plans and ideas for new technology it would take even more capital to start than ever. What does help with some of his new ideas are his innovation to require fewer employees. One of his ideas that lead to him being fired from South West was that he wanted to replace sales ticket booths with sole online purchasing. This would eliminate the need for people to sell tickets while simultaneously increasing efficiency. In the war on financing, David also encounters the issue with food. Customers tend to complain about airplane food, so he simply decided to scrap it all together. This concept showed a lot of focus on David’s part. He decided that if he couldn’t make it a strength for his business then he wouldn’t bother with it at all. Almost every business has this sort of problem and it can be a make or brake their business. It shows whether their management team, be it one guy or dozens, realizes what is the real goal of their business. An airline is not a restaurant, so why focus on food. An automotive shop could offer to furnish customer’s vehicles with fancy doo-dads, but if their main goal is to make cars safe and reliable, they need to focus on the big picture. -What do “I” think the business is doing right and what do “I” think they need to change: David Neeleman had a vision for his company: “We believe that all travelers should have access to high quality airline service at affordable fares.” The next step with this vision is trying to share it. A company can’t run smoothly if there is ambiguity. David needed to define what “high quality” meant to him, as well as “affordable fares”. Regarding “high quality”, David made it very clear that their first step was to buy all their planes brand new, NO exceptions. Being well rounded in the business world is crucial for survival. After spending time working in a plane leasing business David knew all to well the strings attached with that business and also knew he didn’t want to be at their mercy. By purchasing their own, brand new, planes they could design them and fit them with top of the line things, from TV’s, increased leg room, to leather seats. Recommendations: As one of the most successful airline businesses to arise it is hard to really point out any recommendations. I totally understand why David doesn’t like flying. Waiting in lines are never enjoyable for anyone. However, I would recommend that more than just peanuts and sodas be available. Conclusion: David was a great planner. He used his five year non-competitive time to refine his ideas and to sort out his problems instead of vacationing. Innovation was huge and what made Jet Blue so successful so quickly was the foresight in steps to take. From capitalizing, to purchasing, to building, etc. etc. Everything was done in a process that allowed for minimal waste of finances.

Start Up Nation: step #8

Start Up Nation: step #8 Finding Great People Look for people with potential and proven skill, but they need to work well as a team. A great idea won't go anywhere with mediocre people. But if you have super starts, even with a mediocre idea, they will find a way to make it big. Create a "Super Star List" Keep track of these super stars through offering stock options, bonuses, whatever it takes. The best way is to offer some type of recognition for their work. In time they can serve a helpful part in your company. They must feel like they are included! Three types of people for your superstar list: -People with potential -People with proven skills -People who are what we call “power brokers" MENTORS! Having a mentor is almost essential to training YOURSELF in how to operate your business.

$100 Challenge Update #3

This week end got rained out. No one wants a car detailing with it pouring rain. We have raised a total of $55 and with just two more cars we will easily break $100. Blake knows a guy who owns a car business and needs multiple vehicles well detailed. I went to the library Friday and designed a flyer that we can pass out. It contains all the information regarding our services and prices. Hopefully when people can visualize and see in front of them what we all do it will be much more effective than just trying to explain it to them. This next weekend is our golden weekend. We are planning for a bunch of cars.

The E-Myth Revisited ch. 16-18

There is a wonderful start to this reading when he says "If you want it done you're going to have to create an environment in which doing it is more important to your people than not doing it."(p. 197) The problem is how to go about it. You could choose to fire those who don't, give better wages to those who do, and more. People respond better to rewards than punishment. Another strategy to help employees work harder is to simply be a respectable employer. "...I have so much respect for this place. It's because I have so much respect for the boss." The man's boss took him aside the first day of work and explained to him his work ethic. He told him his expectations and treated the new employee with respect. Not as a greeny who didn't know anything, but as an adult who understands. I hope that one day I could be such a boss, but to start I think I would need to take the boss's top 3 principles (on page 201) to heart. 1. "the customer is not always right, but whether he is or not, it is our job to make him feel that way." 2. "Everyone who works here is expected to work toward being the best he can possibly be at the tasks he's accountable for." 3. The business is a place where everything we know how to do is tested by what we don't know how to do, and the conflict between the two is what creates growth, what creates meaning. If I could I would frame this and post in in a place where every employee could be reminded of it daily...maybe right above the employee bathroom mirrors or something. The Final thought was page 204. Invent a game that every one in the business can play. One that is continuous, but still has little victories here and there. Establish the rules of the game and give everyone their position. And since games can get boring over time, it is important to change a few things to make it still interesting, but don't change the strategy. My brother works at RC Willys furniture ware house in Utah and every week or so they have a drawing for the employes to have a change to win something. An I-Pod, X-Box, TV's, etc. This "game" they have invented allows all to play, and has rewards for those who work harder than others. There are two pillars of a successful marketing strategy. 1. Demographics 2. Phychographics These allow/help you to know what your customer wants, even when they don't. (p. 222) -"After all, the purpose of any system is to free you to do the things you want to do." Organization creates order and once I can get everybody doing their specific jobs with rewards for their efforts, show them respect, and create a place that gives the employee a vested interest in the company. These will help me to have a successful business.

The E-Myth Revisited ch. 13-15

In reading chapter 13 I found a comment that I had to stop and think about. He says "In fact, there is ultimately only one reason to create a business of your own, and that is to sell it." I though about the automotive shop that I would like to own one day. With all the effort that it will require, if it does prove to be a successful business I would like to stay in it as long as possible. And even possible I would love to make it as a family business. If you've found something that is profitable why sell it if it could also work for your children as well. But I could see the other side of the coin, that after running a business for lengthy periods of time, eventually a desire for change is inevitable. On page 154-5 he gives an example of a commercial, it had nothing to do about perfume, only that if they purchased this product...the fantasy they portrayed could be yours. Well, I must admit that those commercial drive me insane. They always appear as an over dramatization and give me no information about the product. And perhaps it is only because I do not fit in their demographics. I always imagined that it was a great idea for everyone to do everything. Everybody understands what the other guy does. But as the story continued I could see how things could easily fall apart. Specializing allows them to focus and do one job very well instead a bunch of jobs just ok. Assigning specific jobs also makes specific people accountable. I have had plenty of experience at Erickson's GMC dealership with this. There are two positions, working on the hood, and working under the car. With me and Ryan there was always confusion when a problem was made on a car a few days back. He'd look at him and he'd look at me. It was so frustrating that the manager redesigned the service sheet so now we have to sign for who did what. Now that they know who did what on every car, we are more responsible and the mistakes have been reduced.

Stew Leonard's Rock

"How Stew Leonard's Customer Service Rock of CommitmentCame to Be" After an angery lady accused him of selling sour eggnog, Leanard told her she was wrong and she stormed out saying she'd never come back again. His wife agreed with the woman and so the next morning, realizing he couldn't afford to lose any customers, he bought a 6000 lb granite slab and placed it infront of his store. It read: Rule #1: The Customer is Always Right Rule #2: If the customer is ever wrong, Reread Rule #1 He learned that most customers are not trying to cheat him. And if he treated them all as such he would lose the 99% honest customers because of the 1% dishonest ones. "Customer Service cannot be a sometimes thing" I do agree that it is important to make the customer happy, but after working in an automotive shop I do believe that there are ways to teach the customer in an appropriate way so they will not be mad at you when you show them they are wrong. Many customers try to diagnose their own vehicle and then bring it into a dealership to be fixed. This is fine, except when they are wrong. So sometimes they don't tell us the real problem, but just tell us what they want done. After we do it they will quickly come back and complain that we didn't fix it. Then the issue comes up that we did a bad job. We are then at fault. This is a small example why it is very important to teach the customer who just wants a tune up that it may not solve the problem at hand. The customer may be right that there is a problem, but don't underestimate your business and why they came to you...TO FIX IT. It is your job to instruct the customer what is wrong in a constructive manner. That way they can see your honesty and care for their service.

Gen Y makes a mark

[Generation] Y Makes a Mark There are rising numbers of those in their mid-20's and even younger who are realizing they don't want to have to fit into corperate America. They want their career to fit into them. So they are becoming entrepreneurs. Most of these are children of the baby boomer generation, AKA: Gen Y. They desire to have the work-life balance that their parents didn't have. But going into business just to get away from the fact that what employers are offering and employees are wanting don't usually mix, it often takes lots of help which is why is it very common for entreprenuers to start a business with friends. Though there is a great risk in getting started, there is less of a risk today than there was many decades ago. And if successful the results show that "self cmployed are considerably more satisfied with their jobs than are other workers.