Chapter 6.6, Problem 4CC

Summary Introduction

Case summary:

The case deals with finding a new blue ocean strategy for J airways. In 2000, J airways were founded by Person DN. Person DN would like to set up a blue ocean strategy which would use value-innovation to combine cost-leadership and differentiation activities. In 1993, Company M is the lowest-fare airline that has many cost-saving practices, which was purchased by Company S. The primary goal of Person DN is to provide service with even lower cost than Company S.

Company J has lowered its operating cost and enhanced its differential appeal. The features of Company J airways are satellite radio, free programming and movie, leather seats, high-speed Wi-Fi, friendly onboard service, and free bag checking. The challenges incurred were profit and market share. Hence, Company J could not able to sustain a blue ocean strategy.

To determine: Whether the international expansion put more pressure on the business strategy of Company J.