shows how JetBlue ran into trouble by trying to combine two different
competitive strategies at the same time—a cost-leadership strategy, focused on low
cost, and a differentiation strategy, focused on delivering unique features and service.
Although the idea of combining different business strategies seems appealing, it is actually
quite difficult to execute an integrated cost-leadership and differentiation position.
Cost leadership and differentiation are distinct strategic positions. Pursuing them at the
same time results in trade-offs that work against each other. For instance, higher perceived
customer value (e.g., providing leather seats throughout the entire aircraft and free Wi-Fi)
comes with higher costs. JetBlue continues to pursue an integration strategy today, attempting
to be both a cost leader and differentiator. Many firms that attempt such an integration
strategy end up being stuck in the middle; that is, the managers have failed to carve out a
clear strategic position. In their attempt to be everything to everybody, these firms end up
being neither a low-cost leader nor a differentiator. This common strategic failure contributed
to JetBlue’s competitive disadvantage in recent years.