read SCENARIO and answer the question JetBlue Entrepreneur David Neeleman, at th

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read SCENARIO and answer the question
JetBlue
    Entrepreneur David Neeleman, at the age of 25, co-founded Morris Air, a charter air service that in 1993 was purchased by Southwest Airlines (SWA). Morris Air was a low-fare airline that pioneered many cost-saving practices that later became standard in the industry, such as e-ticketing. After working as an airline executive for SWA, Neeleman founded another low-cost airline, JetBlue Airways, in 1998. At the same time, he also wanted to offer better service and more amenities.
    JetBlue started by using just one type of airplane (the Airbus A320) and chose to fly point to point, directly connecting highly trafficked city pairs. In contrast, legacy airlines such as Delta, United, and American use a hub-and-spoke system; such systems connect many different locations via layovers at airport hubs. The point-to-point business model focuses on directly connecting fewer but more highly trafficked city pairs.
    Some of JetBlue’s other features include high-end 100-seat Embraer regional jets with leather seats, free movie and television programming via DirecTV, XM Satellite Radio, along with friendly and attentive on-board service. Other amenities include its recently added Mint class, which offers personal check-in and early boarding, free bag checking and priority bag retrieval after flight, and complimentary gourmet food and alcoholic beverages in flight. It also features small private suites with a lie-flat bed up to 6 feet 8 inches long, a 15-ince high-resolution personal screen, and free in-flight high-speed Wi-Fi (“Fly-Fi”). JetBlue is also adding the newer Airbus 321 to its fleet, which scores significantly higher in customer satisfaction surveys than the older Airbus 320.
    Also, because roughly one-third of customers prefer speaking to a live reservation agent, despite a highly functional website for reservations and other travel-related services, JetBlue decided to employ stay-at-home parents in the United States instead of following industry best practices by outsourcing its reservation system to India. The company suggests this “home sourcing” is more productive than outsourcing; it also says that customers’ appreciation of the reservation experience more than makes up for the wage differential between the United States and India. To sum it up, JetBlue’s “Customer Bill of Rights” declare its dedication to “bringing humanity back to air travel.”
        
JetBlue using one type of airplane and flying point-to-point are examples of what type of business-level strategy?

Integrated cost leadership/differentiation

Differentiation

Focused differentiation

Cost leadership

1 points   

QUESTION 17

JetBlue using planes with leather seats, free in-flight entertainment, and Mint class are examples of what type of business-level strategy?

Differentiation

Integrated cost leadership/differentiation

Focused cost leadership

Cost leadership

1 points   

QUESTION 18

JetBlue using one type of airplane and flying point-to-point demonstrate what risk of Southwest’s using a cost leadership strategy?

Competitors catch up and erode cost leader’s advantage

Cost reductions may occur at the expense of customers’ perceptions of value

Processes used may become obsolete

Competitors, using their own core competencies, may successfully imitate the cost     leader’s strategy

1 points   

QUESTION 19

JetBlue using planes with leather seats, free in-flight entertainment, and Mint class opens itself up for what risk?

The price differential between JetBlue and firms following another strategy     becomes too large

Experience narrows customers’ perceptions of value for the focal firm’s products’     features

JetBlue doesn’t create enough value to allow it to charge significantly higher prices

Counterfeit goods replicate the features of the focal firm’s products

1 points   

QUESTION 20

JetBlue choosing to employ U.S. citizens for reservations rather than outsourcing to call centers in India helps it avoid what risk of outsourcing?

Losing control over an activity that is important to the firm’s success even though it’s not an activity that is actually a source of competitive advantage

Losing control over an activity that is valuable, rare, inimitable, and non-substitutable

Losing control over an activity that stimulates the development of new capabilities and competencies

Losing control over an activity in which it can create and capture value

Integrated cost leadership/differentiation

Differentiation

Focused differentiation

Cost leadership

Explanation / Answer

16. Cost leadership

17. Integrated Differentiation

18.Competitors, using their own core competencies, may successfully imitate the cost leader’s strategy

19.Counterfeit goods replicate the features of the focal firm’s products

20. Losing control over an activity in which it can create and capture value.

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