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    This Study Resource Was: Value Chain Analysis: Southwest Airlines

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    Jeff
    Southwest Airlines focuses on efficiency and low costs through standardization. It prioritizes operations functions like short flights without meals or assigned seating for fast turnarounds. This allows Southwest to excel in operations and outbound logistics like ticketless travel. JetBlue also aims for efficiency but focuses more on service with amenities on long haul flights, targeting a price premium strategy.

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    This Study Resource Was: Value Chain Analysis: Southwest Airlines

    Uploaded by

    Jeff
    1K views2 pages
    Southwest Airlines focuses on efficiency and low costs through standardization. It prioritizes operations functions like short flights without meals or assigned seating for fast turnarounds. This allows Southwest to excel in operations and outbound logistics like ticketless travel. JetBlue also aims for efficiency but focuses more on service with amenities on long haul flights, targeting a price premium strategy.

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    VALUE_CHAIN_ANALYSIS.docx

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    Southwest Airlines focuses on efficiency and low costs through standardization. It prioritizes operations functions like short flights without meals or assigned seating for fast turnarounds. This allows Southwest to excel in operations and outbound logistics like ticketless travel. JetBlue also aims for efficiency but focuses more on service with amenities on long haul flights, targeting a price premium strategy.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    1K views2 pages

    This Study Resource Was: Value Chain Analysis: Southwest Airlines

    Uploaded by

    Jeff
    Southwest Airlines focuses on efficiency and low costs through standardization. It prioritizes operations functions like short flights without meals or assigned seating for fast turnarounds. This allows Southwest to excel in operations and outbound logistics like ticketless travel. JetBlue also aims for efficiency but focuses more on service with amenities on long haul flights, targeting a price premium strategy.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    VALUE CHAIN ANALYSIS: SOUTHWEST AIRLINES

    Through the ups and downs of the airline industry, Southwest has been steady and successful. It also
    never had a major accident, no labor strife, no layoffs, and always been profitable. It also ranks high in
    customer satisfaction, low customer complaints and one of the best on time performance. We went
    through the bases of superior performance as attributed by multiple analysts. We then categorized these
    reasons using Value Chain Analysis. This exercise yields the following:

    Based on a Value Chain analysis:

    1. All Boeing 737 strategy: Procurement, HR, Inbound logistics


    2. Short haul (though increasingly getting longer): Operations
    3. No hub: Operations
    4. No meal/ no assigned seats: Operations
    5. Fast turnarounds at gate: Operations
    6. No inter-airline baggage transfer: Operations
    7. Ticketless travel: Outbound logistics

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    8. Internet only ticketing: Outbound logistics

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    9. Fuel Price Hedge: Procurement

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    10. Easy/ Fun/ Friendly service culture: HR

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    11. Baggage fly free: Outbound logistics

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    Based on the above, it seems Southwest’s product value resides primarily in Operations and secondarily
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    in Outbound Logistics and Procurement. In particular, all of these value chain activities are aided by
    standardization in planes (a single type of plane) as well as systems (e.g., a single venue of ticket sales).
    Since Southwest primarily focuses on efficiency and low cost which is scaleable, a growth strategy should
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    lead to higher profits.


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    vi y re

    VALUE CHAIN ANALYSIS: JETBLUE AIRWAYS

    Jetblue is younger than most airlines having started its operations in 1999. It was wildly successful in
    ed d

    terms of customers’ perceptions but less so in terms of profitability. It is also much smaller than the
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    legacy airlines as well as Southwest. In some ways, Jetblue was similar to Southwest.

    1. One type of aircrafts (now expanded to two): Procurement, HR, Inbound Logistics
    2. Point to point no connection flights: Operations
    is

    3. No inter-airline baggage transfer: Outbound logistics


    4. Ticketless travel: Outbound Logistics
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    5. Internet only ticketing: Outbound Logistics

    However it also differed from Southwest in important ways. In particular it focused on:
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    1. Long haul flights: Operations


    2. Regional airport to major airport connections: Operations
    3. Better quality assigned seats: Service
    4. DirecTV in every seat: Service
    5. High quality snacks and meals: Service

    This study source was downloaded by 100000762946102 from CourseHero.com on 04-09-2021 19:13:49 GMT -05:00

    https://www.coursehero.com/file/28780104/VALUE-CHAIN-ANALYSISdocx/
    Based on the above it seems Jetblue’s product value primarily resides in its service and secondarily in its
    operations and outbound logistics.

    For Jetblue, higher profits should be obtained by a price premium strategy in view of its value residing in
    superior service. This should also be aided by long haul flights from airports that do not have too many
    direct flight alternatives to large cities.

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    Th
    sh

    This study source was downloaded by 100000762946102 from CourseHero.com on 04-09-2021 19:13:49 GMT -05:00

    https://www.coursehero.com/file/28780104/VALUE-CHAIN-ANALYSISdocx/
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