...MBA 610 Case Study: Southwest Airlines Corporation 1. Southwest Airlines Corporation is an extremely popular and profitable company due to their strategy of being the nations’ low-fare, high customer satisfaction airline. Southwest is able to offer the nation’s lowest fares due in part to their low operating-cost structure, the lowest in the domestic airline industry. This low operating-cost structure (refer to Exhibit 1 for 5 year financial highlights and 2004 data) is the basis on which Southwest builds its competitive advantage, as it allows Southwest to sell low fare tickets while still enjoying a gross margin percentage of sales (29.2% of sales in 2004) much higher than United Airlines (22.7% of sales), American Airlines (1.9% of sales), and Delta Airlines (18.9% of sales). Southwest achieved this low cost operating structure through eschewing the traditional “hub-and-spoke” approach used by their competitors, and instead flying short haul, medium haul, and point-to-point flights, allowing for more frequent flights. As a result, about 80% of Southwest’s passengers fly non-stop and the overall passenger length is approximately 758 miles. Additionally, Southwest consistently seeks out ways to improve its efficiencies and low cost structure. For an example, at Southwest, turnaround time (from the time a plane lands until it is ready for takeoff) takes approximately 20-25 minutes and requires a ground crew of four plus two people at the gate. By comparison, turnaround times...
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...Southwest Airlines Case Study After the acquisition of AirTran, Southwest Airlines (SWA), a company with years of profitability in airline industry is now facing challenges in both external and internal environment. The strength of success in marketing strategy and organizational management and the threats from uncertainty environment exist at the same time. This paper is a brief analysis of the company’s strategy and estimated future performance. External Environment Airlines in United States present a wide variety of services based on their strategies to satisfy different needs of the leisure travelers group and business travelers group. There are three main groups of airlines, which are national airlines, regional airlines and commuter or feeder carriers. Based on the territories they serve, airlines differ in routes. The two major types are point-to-point and hub-and-spoke. Both strategies have their own inherent costs and organizational implications. An airline can provide plenty of services: while most airlines have two classes of service, there are also airlines providing services in different selected classes. After the complete removal of government controls, airlines industry is going on a shakeout under the severe competition which is expected to last a long period. The industry is so difficult that its suppliers have high bargaining power; business requires large expenditures; and the price wars are extreme intensive. To survive and compete in this environment...
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...Southwest Airlines Calsouthern University Introduction “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else (Sam Walton, 2015).” Millions of people fly everyday. Southwest airlines provide low-fare travel among 58 cities in the United States. Although the airline industry suffered greatly in the aftermath of September 11, Southwest was able to continue to hold strong. Southwest airline continues to maintain steady sales as much of the industry was affected by changes in laws/regulations and competition entering the market. In the following report there is a brief introduction to Southwest Airlines and their strategy and then what, if anything, they need to do or not do to remain at the top and competitive in the airline industry. The Problem The major problem of the company is whether they can continue growing and at the same time keep offering the same services to their clients. To continue growing, Southwest Airlines needs to analyze the external environment in order to ensure their success. The solutions that will be presented for Southwest airlines have to attack two main issues: 1. How will they be able to keep their “Southwest airlines LUV” 2. How to keep their expansion and not affect the image of the airline. Southwest Airlines has a list of infinite options, many will hinder their image from the inside out (employees to costumers) while providing a set of services...
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...Case #20 – Southwest Airlines Marisa Melchiorre Amber Harrison Emeka Onyia Company History 1966 Rollin King approached Herb Kelleher’s law office with plan to start low-cost/lowfare airline Ran into legal problems, rival airlines in Texas did everything they could to block new airline Herb Kelleher was determined to start up airline 1971 – Lamar Muse Southwest CEO, background in industry to get it up and starting Raised $7 million in capital and private investors to purchase planes and equipment Flights started between Dallas, San Antonio, and Houston known as the “Golden Triangle” First ever annual profit in 1973 2010 – market share leader in domestic air travel in US, consistently profitable even during down turning economy, profit every year since 1973 Number of passengers increased by more than 28 million 1. Is there anything that you find particularly impressive about Southwest Airlines? One of the most impressive characteristics about Southwest Airlines is their fun, loving, determined company culture that believes first in making employees happy which then results in happy customers. Herb Kelleher was adamant about listening and allowing employees to think and to most importantly be heard. The strong value of the happiness of their spunky employees is their competitive advantage against other rival airlines in the industry. Southwest is able to create a competitive advantage not only with their low prices but also offering a fun and humorous experience...
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...with its employees and how they were managed. Successful human resource practices are a key essential for this to be accomplished. Southwest has encouraged its employees to recognize with others at the company to deliver exceptional customer service and to have fun at the workplace. One possible reason Southwest outperforms other airlines serving the same customers and market is their strategy of low costs, low fares, and frequent flights. Southwest also keeps its fares simple. Unlike other airlines that rely heavily on computers and artificial intelligence to maximize flight revenue, Southwest normally offers only two fares on a route, a regular coach fare and an off-peak fare. Overall, Southwest Airlines has been profitable in every one of the last 21 years from when the case study was written. The HR practices that served as sources of Southwest success start with hiring the right people into HR to begin with. Southwest transformed its Human Resource Department from “a police department” to a “People Department.” Southwest recognized that their people are the competitive advantage. They deliver the resources and services to prepare their people to be winners, to support the growth and profitability of the company, while preserving the values and special culture of Southwest Airlines. “The company is only as good as its people.” Southwest constantly reinforced that theme, which is why it has an advantage over their competition. Southwest’s attention to congruency starts...
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...Exit seating (a)(1.i-iv) (page 4, ¶3 ) Add a Note below the subparagraph Paragraph (6) Exit Seating / Subparagraph (a)(1.) That requirements should be part of the air carrier’s approved Exit Seat Program” Southwest Airlines would like to add the following NOTE below this subparagraph, NOTE: Air Carriers should know that if the personal briefing to each passenger seated in an exit seat becomes part of an air carrier’s approved Exit Seat Program as referred to in Operations Specification A022, that the word “should” that is used in this advisory circular concerning personal briefings to passengers seated in an exit seat is no longer valid. Since this briefing is now part of an Operations Specification all the “should(s)” become “must” as an air carrier is required to follow its Operations Specifications.” A4A Appx. 1 2.Video Briefings a)Pretakeoff 6. Exit seating (a)(1.i-iv) (page 4, ¶3 ) This subparagraph does not capture what is found in current guidance material on this subject such as having the F/A “Clearly explain what each such passenger should do in the event the exit might be needed,” which is found in 121-24C. Southwest Airlines suggests that (i) be replaced...
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...Southwest Airlines, owned by Southwest Airlines Company, is a passenger airline primarily operating in the United States. Based on information in their annual stockholders report (Southwest Airlines, 2012), they provide scheduled air transportation for passengers departing and arriving from 103 cities in 41 states. This is limited compared to some of the larger airlines. The airline is the largest US domestic airlines based on the total number of originating passengers boarded. This does not mean they are the largest by fleet size or number of employees. Because of the point to point model rather than the typical hub and spoke model, 71% of Southwest’s fares are non-stop allowing them to increase the total passengers per day per plane. With this point to point model Southwest has made a profit for the past 39 years, and has grown into a $15.7 billion business operating 140 aircraft. Based on Gwynne (2012), Southwest started as a low cost point to point airlines operating from 3 Texas cities in 1971. They offered ticket prices as low as $40 per seat between Dallas, Houston, and San Antonio. Southwest flew from small airports and was able to get people in and out quickly with fewer hassles as compared to the major airlines of the time. Their market strategy at the time was simple. Get people where they wanted to go, on time, for the lowest price possible. This follows the production concept as described by A Framework For Marketing Management (2012). The early Southwest airlines...
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...efficiency and pass cost saving to its passengers by offering them low prices. The basis on which Southwest builds its competitive advantage is putting employees first, this will make them take real care of customers. It record as the first in the industry in the term of customer service and customer satisfaction based on some conducted surveys. Its strategy is valuable, rarely done because its difficulty to manage, hardly to imitate and organized well by the whole employee from pilot, gatekeeper, cabin crew, ground crew that committed to the company. The employee have one goal congruence with the company’s goal. The Southwest Airlines strategy is keeping costs low and treating employees well and a commitment to managing the company. The employee happy and they give the best service that will give satisfaction to the customer. There are two main strategic areas: a. Operating Costs Southwest Airlines has the lowest fares among its competition. Its lowest fares partly came from low operational costs. Here are the source of cost savings: * Using only one kind of airplane that is ‘Boeing 737’ while competitors are using all kind of airplanes and models. That saves millions for Southwest in maintenance cost, spare-parts inventories and mechanics training. More, every pilot and crew members will be familiar with every plane. On the other hand, using one type of airplane gives Southwest the opportunity to move the aircrafts through the route network without costly reconfigurations...
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...STRATEGIC MANAGEMENT (MGT431) GUIDELINES FOR THE WRITTEN STANDARDIZED CASE ANALYSIS Overview and Background The introduction of your paper should acquaint the reader with the company being analyzed and demonstrate your ability to succinctly describe the company from a historical perspective. Take this opportunity to highlight key factors and past strategies, which have led the company to its present position. It is important for you to understand precisely, why the company has been successful (or unsuccessful) in the past. Taking time to articulate this may suggest distinctive competencies that you might otherwise overlook when writing the following sections. Conclude the “Overview and Background” of your paper by clearly identifying the key issues, and/or problems facing management at the close of the case. After reading and analyzing a case, the reader is generally left with a feel for some major issues with which will determine the future success of the firm. State these issues as succinctly as possible as they will likely be developed in much greater detail later in the case analysis. Company Mission This section of your paper should clearly state the company mission as you see it at the end of the case. Remember, a company mission delineates the primary purpose of the firm (its reason for existence) and must, at a minimum, describe: * The products or services of the firm * The primary markets to be served * The means by which the...
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...Southwest Airlines Case Study Jared G. Sanders BUSN412 Business Policy April 1, 2012 SOUTHWEST AIRLINES WWW.SOUTHWEST.COM AIRLINE INDUSTRY BACKGROUND /HISTORY/ COMPANY TIMELINE: Southwest, founded by Rollin King and Herb Kelleher, began as a small Texan airline almost 35 years ago and has grown to become one of the largest airlines in America. It was created on the following premise: “If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline!” (www.southwest.com). Today Southwest Airlines flies more than 70 million passengers a year to 60 great cities all across the country, and they do it more than 3,000 times a day. They have 436 of the newest jets in the nation, with each plane being an average age of 9 years. (www.southwest.com). Southwest’s combination of low fares, outstanding customer service, and strong leadership have helped the airline remain profitable even in the midst of tragedies like the terrorist attacks on September 11, 2001. SWOT ANALYSIS: Southwest was set up for success from the beginning because of its unique upside-down organizational structure. Upper management is at the bottom and supports the front line employees, who are the real experts. Kelleher’s unorthodox leadership style, in which everyone in the company makes management decisions, is largely unheard of these days. The company doesn’t...
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...Case Study Two: Southwest Airlines & Sprint Telecommunications DeVry University: BUSN258 November 30, 2011 Southwest Airlines & Sprint Telecommunications There are many factors that contribute to the success of a company and customer service is one of the more important elements that determine this. A company’s customer service reputation is not built nor fixed overnight; yet it can be a company’s greatest attribute, or attribute greatly to its downfall. Southwest Airlines is known for its world class customer service; this is just the opposite of Sprint Telecommunications which is often noted for its lack of customer service. While exploring the customer service reputation of these two different companies we will discover the vital role and impact of customer service as pertains to the success of these companies. “Southwest Airlines Co. is a low-fare domestic airline that provides primarily short haul, high-frequency airline services. Southwest is one of the largest carriers in the U.S. based on number of domestic passengers. The firm operates 547 Boeing 737 planes, serving 72 cities in 37 states throughout the U.S. The firm operates over 3,100 flights daily (Plunkett 2011).” For those of us who are unfamiliar with Southwest Airlines customer service practices look no further than the company’s philosophy and mission statement. “The Southwest Airlines philosophy serves as the vision and mission for the organization. Certain quality management principles are embodied...
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...HRMN 410 Southwest Case Study Click Link Below To Buy: http://hwaid.com/shop/hrmn-410-southwest-case-study/ Southwest Airlines Case Study Objective of this assignment: This activity serves as a final assessment for the course. It provides you the opportunity to demonstrate how well you have achieved the learning outcomes of the course. You are to provide your knowledge of the strategic and administrative function of Human Resources by thinking about the situation of Southwest Airlines recent merger and their expansion. Deliverable: • Read and reflect on the case study below • Prepare a response paper of not less than Six pages (excluding title and reference pages) with appropriate in text citations. • Demonstrate your research and analytical skills in developing your comprehensive paper by using the organizations website and outside articles written about the organization to supplement the information provided in the case study. • However, the case study is unique in that it is focused on the HR ramifications and most of the outside reports you will locate articulate the business side of the merger or expansion possibilities. Tailor your paper to the HR ramifications of the merger and expansion. • Keep in mind that the purpose of this final assessment is for you to demonstrate your knowledge of the strategic and administrative function of Human Resources. While the business side of the situation is the foundation, it is the command of the needed tasks...
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...An Analysis of “Southwest Airlines: We Love Your Bags” I visited the Southwest Airlines website and clicked on the “Our Culture “ tab. On this page, Southwest has culture defined as such: Cul’ture: the development, improvement, and refinement of the originality, individuality, identity, and personality of a given people (“Culture”, 2012). Southwest Airlines has stood out from the rest of the airlines even before I ever read a case study on the company and its business model. Although I have never flown on a Southwest Airline airplane, the difference can be seen just by walking through an airport that they service. The people look more relaxed, happier, and dedicated to their jobs. The company has capitalized by tailoring their culture to fit their customers and their employees versus tailoring their culture to adapt to the market/environment of the airline business. While they may not be the fanciest company in the airport, the friendly service is seen wherever you see their logo. It is an airline designed for the individuals looking for great value and dependability. When you look at the mission statement for Southwest, it is evident that they are committed to its employees. In a Knowledge@Wharton article, Colleen Barrett was quoted as saying ”Our mission statement is posted every three feet, all over every location that we have, so if you are a customer, you’ve seen it”(Knowledge@Wharton, nd, para. 3). The mission statement states, “Above all, Employees will...
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...culture that is needed to accelerate the goals and objectives and to guarantee that implemented changes are successful. The intention of this paper is to analyze the effects of organizational culture on organizational development and change. To allow one to grasp the concept of organizational culture Team A will give the description of Southwest Airlines, including the organization’s philosophy, mission, vision, values, and structure, an analysis of the relationship between the design and Southwest Airlines and its organizational culture, and the effects of organizational culture on Southwest Airlines workforce will be reviewed. An evaluation of the effects of change within Southwest Airlines will also be discussed. Description of Southwest Airlines Southwest Airlines is an airline that provides many services in different destinations around the United States. Southwest Airlines believes in being devoted to each of the communities that they serve by having their employees, customers, neighbors being a part of a loving family. Southwest philosophy is that happy employee’s equal happy customers and happy customers keep Southwest flying. They believe in providing a one of kind culture within their organization that means...
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...Market for Southwest Airlines Steven Garnes MKT/571 August 10, 2015 Denise A. Rueb Segmentation and Target Market for Southwest Airlines Introduction Southwest Airlines was formed in 1967 by Rollin King and Herb Kelleher and started service in June of 1971. The airline is headquartered in Dallas, Texas and originally operated flights within the state of Texas. The company has since expanded and now operates flights from Dallas to almost all major cities in the United States and is considered the largest low-cost carrier in the country. “Southwest seeks to offer a travel product that is built around flights targeted to specific demographics and ticket pricing that is simplified so that passengers know exactly what they getting for what they pay” (Bhutada, 2009). Market Brand Southwest has created a strong market brand by focusing on points of difference. “Points of difference are attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand” (Kotler, Keller, 2012). The points of difference for Southwest has been its focus on reliability, the value the airline offers its customers, and the fact it’s a fun airline to fly. Target Market Market segmentation in the airline industry is not as straightforward as it may seem. Airlines may consider it common sense to simply separate the market into business and economy class passengers. “However, airline companies that...
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