Showing posts from February, 2014

NetJets's blue ocean strategy

NetJets reconstructed market boundaries to create a blue ocean by looking across alternative industries. NetJets observed that business travellers, the most lucrative mass of customers, have two principal choices: They can fly business class or first class on a commercial airline or the company can purchase its own aircraft to serve its corporate travel needs. Why would corporations choose one alternative industry over another? Commercial travel avoids the high up-front, fixed-cost investment of a multimillion dollar jet aircraft. Also, a company purchases only the number of corporate airline tickets needed per year, lowering variable costs and reducing the possibility of unused aviation travel time that often accompanies the ownership of corporate jets. On the other hand, corporations buy private jets to dramatically cut total travel time, to reduce the hassle of congested airports, to allow for point-to-point travel, and to gain the benefit of having more productive and energized