...4315*2 Team 4 Strategic Profile and Case Analysis Purpose In the airline industry competitors have to work hard to maintain market share and even more to increase their share. Southwest Airlines has become the market share leader in terms of passengers carried with the simple strategy: “low-cost/low-price/no-frills.” They have done an excellent job in implementing and executing their strategy elements. Some of the most crucial executions in the Southwest strategy are their point-to-point scheduling of flights, customer service and customer satisfaction, and appreciation of employee involvement for continuous company improvement. Although many other airlines can implement the same strategic elements as Southwest has, they would still be behind the times since Southwest has been working efficiently from inception. Throughout this analysis of their performance, one may conform his or her own opinion on how to grade Southwest with the information provided. Alternative strategic suggestions will be evaluated with a preferred alternative choice that could improve the Southwest image and performance. Situation Analysis General Environmental Analysis Until the Airline Deregulation Act of 1978, the government had control over airline fares, routes, and market entry. But since Southwest's initial plan was to fly only intrastate routes, they did not have to come under the regulation of the Civil Aeronautics Board. Southwest did, however, encounter some legal and regulatory...
Words: 2295 - Pages: 10
...Summary Corporate Culture & Southwest Airline Case Analysis CORPORATE CULTURE Corporate culture is an incredibly powerful factor in a company’s long-term success. No matter how good your strategy is, when it comes down to it, people always make the difference. Corporate Culture * Is the meshing of shared values, beliefs, business principles, and traditions that imbues a firm’s operating style, behavioral norms, ingrained attitudes, and work atmosphere. * Is important because it influences the firm’s actions and approaches to conducting business Corporate culture refers to the shared values, ingrained attitudes, core beliefs and company traditions that determine norms of behavior, accepted work practices, and styles of operating. How was a corporate culture developed and nurtured in your organization? A company’s culture is grounded in and shaped by its core values and ethical standards. I am working at PT. Tempo Scan Pacific, Tbk. and known as Tempo Group. Tempo Group has a “Corporate Culture” implemented in the 5 core values : 1. Honesty 2. Equality 3. Usefulness 4. Responsibility 5. Perseverance Here are a few ways my organization can facilitate the creation of a nurturing the culture : * Communications: This allows information and ideas to flow up from entry-level ranks to the top management of the company, but information from upper management is also shared more readily with the entire company. Always communicate...
Words: 3368 - Pages: 14
...ORGANIZATIONAL ANALYSIS It is evident that the greatest strength that Southwest Airlines has is its financial stability. As known in the US airline industry, Southwest is one of those airlines who are consistently earning profits despite the problems the industry is facing. With such stability, the corporation is able to make decisions and adjust policies, which other heavily burdened airlines may not be able to imitate. Having a low amount of cost in their operations is one of the contributing factors in Southwest Airlines’ financial success. Such low cost model of the corporation is brought about by an effective strategy. Southwest uses only one type of aircraft – the fuel-efficient Boeing 737. This tactic keeps training and maintenance costs down. Moreover, the no-frills approach to customer service contributed to the low cost of operations for Southwest. The airline does not serve meals on board, and there are no luxurious or first class seats offered. Services like these have been seen by the airline as unnecessary for an airline that provides a short-haul trip from city to city. By these, Southwest were able to offer low price tickets to customers, which was good for the company because most people would prefer to fly without those services mentioned if it meant for cheaper ticket price. Even though Southwest offers no-frills, there is still a high degree of customer satisfaction that continuously builds customer loyalty for the company. As mentioned, Southwest offers low...
Words: 1540 - Pages: 7
...TO MANAGEMENT Semester 2, AY2011/2012 Individual Report A Report on Southwest Airlines Prepared for: Mr. Balasubramanian Shankar Due date: Monday, 5th October 2015 Submitted by: Jiyeon | CT00000000 | TABLE OF CONTENTS 1. INTRODUCTION 2 2. COMPANY BACKGROUND 3 3. PESTEL ANALYSIS 4 3.1 Political 4 3.2 Economic 4 3.3 Social 5 3.4 Technological 5 3.5 Environment 5 3.6 Legal 6 4. PORTER’S FIVE FORCES ANALYSIS 7 4.1 Threat of New Entry 7 4.2 Threat of Substitution 7 4.3 Buyer Power 7 4.4 Supplier Power 8 4.5 Competitive Rivalry 9 5. STRATEGIC RECOMMENDATIONS 10 5.1 Managing Technology Advancements 10 5.2 Maintain Cost Advantage 10 5.3 Geographical Expansion 10 5.4 Product Diversification 11 6. CONCLUSION 12 7. REFERENCES 14 1. INTRODUCTION The focus company in this report is Southwest Airlines (SA), a major low cost carrier in the United States (US). The aim of this report is to examine the current market environment and competitive power of Southwest Airlines. In order to have a substantial overview of its environment, two analyses, the PESTEL analysis and Porter’s Five Forces analysis, will be used to evaluate SA. With the findings, strategic recommendations will be made for the problems that the airline is facing or may encounter in the near future. 2. COMPANY BACKGROUND Southwest Airlines is a budget airline established in 1967 by Rollin King and Herb Kelleher and had its first flight...
Words: 3086 - Pages: 13
...Southwest Airlines Corporation Question 1 : What is Southwest’s strategy? What is the basis on which Southwest builds its competitive advantage? One of the goals of the company is to achieve its goals which can be seen through the Vision. Southwest’s Vision “ To become the World’s Most Loved, Most Flown, and Most Profitable Airline” can be achieved by planning good strategy. Strategy is also needed in order to achieve Southwest’s goals and purpose, which is “To connect People to what’s important in their lives through friendly, reliable, and low-cost air travel”. The main strategy of Southwest is the capability of the company to manage and take advantage of its competitive advantage. Major competitive advantage of Southwest Corporation is its people, just like current CEO Gary Kelly said on company’s official website : “Our people are our single greatest strength and most enduring long-term competitive advantage”. Additionally, Southwestt keep developing its sustainable competitive advantage by using Generic Competitive Advantage. It was the advanced of Michael Porter’s Five Force Analysis Model consist of Low Cost or Differentiation. a) The Low Cost Strategy or Cost Leadership Southwest used tight cost control and cost minimization by keeping their cost of goods sold low but not as an exchange of satisfaction of the customer. They maintained low cost operation by doing several following things in the right way, effectively and efficiently: ...
Words: 383 - Pages: 2
...The Airline Industry: A Strategic Overview of Southwest Airlines Terra Thompson Ohio Dominican University Running head: SOUTHWEST AIRLINES 1 The Airline Industry: A Strategic Overview of Southwest Airlines Terra Thompson Ohio Dominican University SOUTHWEST AIRLINES The Airline Industry: A Strategic Overview of Southwest Airlines Table of Contents 2 The History of Southwest Airlines ................................................................................................. 3 Target Market and Business Model ................................................................................................ 3 Current Product............................................................................................................................... 4 Southwest’s Culture ........................................................................................................................ 5 Mission Statement .......................................................................................................................... 5 Mission and Corporate Culture....................................................................................................... 6 Employees and the Mission ............................................................................................................ 7 The Importance of the Mission Statement and Corporate Vision................................................... 7 Strategic Analysis .................
Words: 6158 - Pages: 25
...Southwest Airlines, Case Analysis Your name BUSN412 Business Policy August 7th, 2011 CASE ANALYSIS Southwest Airlines. COMPANY NAME: Southwest Airlines. INDUSTRY: Air Travel. COMPANY WEBSITE: (www.southwest.com) COMPANY BACKGROUND: Southwest Airlines Co. incorporated in 1967, is a passenger airline that provides scheduled air transportation in the United States. As of December 31, 2010, the company had 548 Boeing 737 aircraft serving 69 cities in 35 states (Southwest Airlines Company profile, 2011). Key officers include: Herbert D. Kelleher – Founder and Chairman Emeritus. Colleen C. Barrett – President Emeritus. Gary C. Kelly – Chairman, President & Chief Executive Officer. The Company functions primarily on point-to-point service rather than focusing on hub and spoke service. About 78% of the passengers of the airline travel on non-stop flights and the Company predominantly serve short-haul routes with flights operating highly frequent. (Southwest Airlines Company profile, 2011) SWOT ANALYSIS: Strengths: By far the biggest strength of Southwest Airlines is the ability of the company to offer reliable low-cost prices; they are also able to maintain lower operating cost which enhances its profitability. They were the first to introduce online booking, ticket less traveling, and no reserved seating, thus making it easier to turn around flights. The teamwork and efficiency within the company’s employees is widely recognized as one of the reasons...
Words: 1682 - Pages: 7
...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...
Words: 1474 - Pages: 6
...Case Analysis – Southwest Airlines Corporation Jerry Pierce California Southern University Case Analysis – Southwest Airlines Corporation Introduction Southwest Airlines is America’s largest low-fare carrier, serving the most domestic customers than any other airline due to their unique combination of low fares, friendly customer service, record of safety, lack of fees, and “an extraordinary corporate Culture that extends into the communities (they) serve.” (Southwest, 2013) Incorporated on June 18, 1971 in Texas, Southwest airlines commenced, serving three Texas cities with three Boeing 737 aircrafts under the direction of its’ founders, Rollin King and Herb Kelleher. Their philosophy was simple and consisted of an idea that getting passengers to their destinations when they wanted to get there, on time, at the lowest possible cost, “and make darn sure they have a good time doing it”, customers will show loyalty to the airline and ensure its success. (Southwest, 2013) Proof of the company’s success was confirmed in 1989 when it exceeded one billion dollars in revenue and established itself as the highest ranked in customer satisfaction among all major airlines. Analysis The mission statement of Southwest Airlines boasts a “dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.” (Southwest, 2013) Additionally, Southwest confirms a loyalty to its employees by creating a stable work...
Words: 1292 - Pages: 6
...EWMBA 299 – Competitive Strategy Southwest Airlines Introduction The domestic US airline industry has been intensely competitive since it was deregulated in 1978. In a regulated environment, most of the cost increases were passed along to consumers under a fixed rate-of-return based pricing scheme. This allowed labor unions to acquire a lot of power and workers at the major incumbent carriers were overpaid. After deregulation, the incumbent carriers felt the most pain, and the floodgates had opened for newer more nimble carriers with lower cost structures to compete head-on with the established airlines. There were several bankruptcies followed by a wave of consolidation with the fittest carriers surviving and the rest being acquired or going out of business. Analysis of the airline industry To determine the profitability of the airline industry, we will do an industry analysis using Porter’s five-forces framework. This industry analysis will help us in understanding the size of the Potential Industry Earnings (PIE), and how much of this the different participants can extract. Rivalry among competitors There is intense rivalry among different airlines. In the pre-deregulation days, airlines competed mostly on things like service, meals and in-flight movies etc., since prices were mandated by the Civil Aeronautics Board. In the post-de-regulation era, this rivalry has taken on the form of severe price competition, with airlines ruthlessly undercutting each other with...
Words: 2475 - Pages: 10
...Southwest Airlines BUSN412 Business Policy September 29, 2011 CASE ANALYSIS SOUTHWEST AIRLINES COMPANY NAME: Southwest Airlines. INDUSTRY: Southwest Airlines Co COMPANY WEBSITE: (www.southwest.com) COMPANY BACKGROUND: Southwest Airlines was incorporated by Rollin King and Herb Kelleher in March 1967. Their main focus was to avoid federal regulations by providing interstate services in Texas. In 1970, the Supreme Court upheld the right for Southwest Airlines to fly within Texas. By January 1978, Southwest Airlines had a total of almost fifty million dollars of revenue. In January 1998, Southwest Airlines were considered one of the best companies for America to work for (Our History). SWOT ANALYSIS: Strengths: The strengths for Southwest Airlines are one of the lowest airfares offered, which attracts more customers because of the same quality, but with less cost. They also have no fees for the first two baggage cost. Many other airlines charge expensive fees for one bag, which loses their customers. Weaknesses: Southwest Airlines has a limited amount of cities that it flies to, which are about 70 cities. This is harder for customers to book through their airlines because of the limited cities that it is constricted to. Since it started off with only Texas, it still continues to expand. Opportunities: As mentioned above, one of Southwest Airlines opportunities is expanding to more cities. Going from one to about seventy one has made their business increase...
Words: 1089 - Pages: 5
...Introduction Southwest Airlines is a major airlines company which provides air transportation to the people in U.S. It is headquartered in Dallas, Texas, and employs 34,901 people. It was co-founded in March 16, 1967 as Southwest Co. by Rollin King and Herb Kelleher initially named Air Southwest until changing the name to Southwest Airlines in early 1971 (matthew, n.d.). The main objectives of the firm was to attract the passengers by providing convenient schedules, taking people to their destination on time, and charging fees compatible with their automobile. Their target market is the business travelers and price- sensitive leisure travelers. There are a number of strategies of the company. The company is known among the top market leaders by following the low-cost differentiation strategy. Their tagline “Freedom to Fly” gives them another advantage. They provide fare promotions to stimulate ticket sales on flights. Passengers do not have to pay for their bags. In addition to that, there are special benefit programs like frequent flyer program giving rewards like Standard Rewards which include a free round trip if the passengers earn 16 credits in 24 months. Similarly another reward like Companion Passes gives the passengers a free round trip if they earn 100 credits in 12 months. (Hadi, 2012) Furthermore, they plan to expand to new geographical markets and adding flights to those areas where their rivals are cutting back services. There is huge competition in the airline business...
Words: 1008 - Pages: 5
...------------------------------------------------- SOUTHWEST AIRLINES 2008 ------------------------------------------------- (Case Analysis) Problem Statement: How can Southwest Airlines maintain its low cost leadership in the industry by making the strategy sustainable against the competitors that are emerging strong without compromising on the quality of customer service? External Analysis: Pest Dimensions | Effects on the case | Political | * 9/11 Attack, Ongoing war in Iraq, 2003 SARS epidemic affected the industry but Southwest was affected the least | Economical | * High Fixed Costs * Constantly changing fuel expenses | Social | * Strong commitment towards customer service * Hiring based on the attitude not on the experience | Technological | * Constantly emerging technologies has enabled frequent traveling among people * Enabled online ticket booking through website launch. | Legal | * Won legal battles against the competitors in the US courts twice * Bankruptcy protection filed by various Airlines | Environmental | * Other airlines were now out of bankruptcy with lower costs and higher efficiency. | SWOT Analysis: Strengths | * Point to point flight system * Low turnaround time of 15 min while the industry average was 45min * First movers in the online presence with a website of their own and in 2007 they accounted for 74% of their tickets booked online * Low prices * Customer centric behavior made the Southwest airlines stand out with fewest...
Words: 1058 - Pages: 5
...2010 CASE STUDY ON SOUTHWEST AIRLINE CHUOP Theot Therith TABLE OF CONTENT Table of Content 1. Case Abstract .......................................................................................................................................................... 1 2. Propose a Vision Statement............................................................................................................................ 2 3. The company mission statement and mission statement proposed .................................................. 2 4. List the corresponding Mission Statement components ......................................................................... 2 5. Perform an External Audit.............................................................................................................................. 3 6. Competitive Profile Matrix (CPM) ............................................................................................................... 5 7. The EFE Matrix .................................................................................................................................................... 5 8. Perform an Internal Audit ............................................................................................................................... 7 9. The IFE Matrix ..................................................................................................................................................... 8 10. TOWS Analysis ......
Words: 5651 - Pages: 23
...Southwest Airlines Case Analysis Philemon Ngadigui BUS 478 Cases in Strategic Mgt. November 17, 2012 Introduction The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit. a little more than forty years ago, Rolling King, owner of a small commuter airline, and Herb Kelleher, King’s lawyer, got together and decided to start a different kind of airline that would provide a short-haul, low-fair, high-frequency, point-to-point service in the United States. The company began service on June 18, 1971 with flights between Dallas, Houston, and San Antonio (“The Golden Triangle” as Herb called it), under the direction of Lamar Muse, who was brought in as a CEO. Muse was an aggressive and self confident airline veteran who knew the business well and who has the entrepreneurial skills to tackle the challenges of building the airline from scratch and then competing head-on with the major carriers. According to CNN.com citing the Fortune 500 journal, Southwest Airlines is the fourth largest customer airline carrier in the United States, and the 167th in the Fortune 500 annual ranking of America's largest corporations revue, with a annual revenue of $15,658.00 million . They use all Boeing 737 jets in order to save money on training and maintenance. The average age of company’s fleet is only 8.4 years. The average trip length is 451 miles with an average...
Words: 2477 - Pages: 10
