...ABSTARCT: This report aims to give a brief understanding of strategic commitments, the rationality of predatory pricing and the extent to which predatory pricing strategies are used in the global airline industry. DATE: 5th March 2015 Introduction This report aims to give a brief understanding of strategic commitments and the rationality and extent to which predatory pricing strategies are used in the global airline industry. The Airline industry, being highly competitive, offers many examples of both Strategic Commitment making and Predatory Pricing strategies. What are Strategic Commitments... The commitments that firms make are two pronged, having direct and strategic effects. The direct effect is the clearly identifiable aspect of the commitment. The strategic effect of the commitment is more subtle, as it is the influence and response which the commitment generates from the competitors in the market in regards to their intended short/medium term tactical plans. Strategic commitments can be described as a form of strategy that firms have at their disposal, in which information on plans or intended actions by the business are publically released with the purpose of influencing the actions of other key market players. To be considered a strategic commitment the announced plan/action must have visibility so that those it is intended to influence can observe it, and it must be difficult to reverse, due to costs or other factors such as potential damage to a firm’s...
Words: 2211 - Pages: 9
...elements of marketing mix affects the development of the organization’s marketing strategy and tactics and how each is implemented. Hawaiian Airlines is a well-know company in the Hawaiian Islands. The company’s mission statement is to “grow a profitable airline with a passion for excellence, our customers, our people and the spirit of Hawaii” (“Mission, Vision & Values”,2012). In order to achieve the stated mission statement, Hawaiian Airlines has devised a creative marketing mix. The first element in the marketing mix is product. The product for Hawaiian Airlines is airline tickets. Some of the aspects Hawaiian Airlines marketing team researched were what the customer expected from the airline and what elements differentiated them from their competitors. Hawaiian Airlines concluded that customers expected affordability and quality customer service when purchasing from their airlines. Hawaiian Airlines is branded to represent Hawaii and the “aloha” spirit. Hawaiian Airlines’ logo which is a woman with a flower in her ear is a representation of the culture in Hawaii. The logo or image is the second product Hawaiian Airlines sells and it also differentiates them from other airlines because of the representation of the Hawaiian culture. The results of the research affect the development of Hawaiian Airlines’ marketing strategy and tactics by appealing to the needs of the consumers. On Hawaiian Airlines’ website, passengers are able to put special request notifications such as:...
Words: 833 - Pages: 4
...Southwest Airlines SWOT Analysis Beresford Doherty February 16, 2009 The Mission Statement 1 The mission statement of Southwest Airlines declares that it is "dedicated to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit." And to its employees, Southwest Airlines pledges a commitment "to provide our Employees a stable work environment with equal opportunity to learn and for personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring attitude with the organization that they are expected to share externally with every Southwest Customer" [1]. Southwest Airlines is a principal supplier of air transportation in the United States for the conveyance of passengers for business and leisure purposes. In accordance with its mission statement, Southwest Airlines has recognized the importance of customer service and has trained its employees to conform, in accordance with responsible awareness of their customers and their needs. Southwest Airlines Co is arguable the most efficient, best performing domestic airline in the United States today. Based on 3 criteria’s from the Federal Aviation Administration (FAA) they are the enforcement of regulations and standards related to the manufacture, operation, certification and maintenance of aircraft. Southwest...
Words: 3130 - Pages: 13
...Profile of a Successful Company: Southwest Airlines Eileen Bertera Southern New Hampshire University Executive Summary Upon review on a profile of a successful company we see Southwest Airlines as a prime example. Their ability to recognize weakness in their management system and adjust strategies has allowed them to emerge as a leader in the US airline industry. Southwest is the largest US low fare carrier with low fare rates, no additional fees and excellent customer service. Southwest Airlines currently has one of the most innovative management practices in the US to date. A review of the critical elements of Southwest Airlines proves to be effective and innovative. Mission and Vision According to their mission statement, Southwest is “dedicated to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride and company spirit.” (sw.co, 2015) This mission is demonstrated by the recognition of the airline business as a customer service industry. With this recognition is the practice of customer service and hospitality skills by all employees in all departments. The customer experience comes first. Southwest Airlines believes in treating all employees like family and customers like guests in their home. By providing hospitality skills and engaging with their customers, Southwest Airlines is able to fulfill their mission purpose. Strategic Management Plan The main goal of Southwest Airlines strategic management plan is to quickly...
Words: 764 - Pages: 4
...Southwest Airlines COM/530 Communications for Accountants March 24, 2014 Abstract Southwest Airlines is the most respected airline in the United States for their philosophy, mission, vision, and values. More than 38 years ago Rollin King and Herb Kelleher started in 1971 as a small 3 airplane carries operating with in Texas. Southwest has dedicated themselves with providing the highest quality of customer service, provides safe reliable air transportation service at a cost effective pricing. “Southwest Airlines is the nation's largest carrier in terms of originating domestic passengers boarded and has acquired AirTran Airways, now a wholly owned subsidiary of Southwest Airlines Co. Southwest serves 73 cities in 38 states and remains one of the most honored airlines in the world known for its commitment to the triple bottom line of Performance, People, and Planet.” (PR Newswire, 2012) SOUTHWEST AIRLINES This paper will discuss the culture of Southwest Airlines philosophy, mission, vision and value statements. The mission of Southwest Airlines is its ongoing dedication to provide the highest quality level of customer service. “Air Transports World’s selection for Airline of the Year for 1991 is Southwest Airlines of Dallas. Created in 1967 by Herbert D. Kelleher and Rollin King, the airline started up in 1971 as a small, 3-airplane carrier operating entirely with Texas. Southwest has dedicated itself to providing safe, highly reliable and frequent air transportation...
Words: 778 - Pages: 4
...SOUTHWEST AIRLINES CO. CASE STUDY 2013 1) Financial data from 2012-2008 | Revenues(b) | Net Income (b) | Load Factor | Trips flown | 2012 | $17.09 | $0.42 | 80.3% | 1,361,558 | 2011 | $15.66 | $0.18 | 80.9% | 1,317,977 | 2010 | $12.10 | $0.46 | 79.3% | 1,114,451 | 2009 | $10.35 | $ 0.099 | 76.0% | 1,125,111 | 2008 | $11.02 | $0.18 | 71.2% | 1,191,151 | 2) Blue Ocean Strategy Blue ocean strategy refers to the creation of a new, uncontested market space by a company that makes competitors irrelevant and that creates new consumer value often while decreasing costs. Southwest airlines is a very good example for using Blue Ocean Strategy as by creating a new market by offering the speed of air travel with the low cost and flexibility of driving. The three main aspect of Blue Ocean Strategy are as follows and how the Southwest Airlines applies these to its business: FOCUS: Southwest focus only on three factors: friendly services, speed and frequent point-to-point departures. They doesn’t make investment in meals, lounges and seating choice and able to price against car transportation DIVERGENCE: While the other Airlines operated through hub-and-spoke systems, Southwest Airlines doesn’t followed them instead created new rules and alternatives by choosing point-to-point travels between midsize cities. COMPELLING TAGLINE: A Good strategy has a clear cut and compelling tagline, which not only provides clear, cut message but also advertise...
Words: 1882 - Pages: 8
...Southwest Airlines using the Congruence Model Company’s Strategy: Southwest’s strategy is to improve efficiency in its operations and pass cost saving to its customers by offering them low and competitive prices. Southwest Airlines is dedicated to providing the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and company Spirit. Analyze each key element of the company separately based on the congruence Model Organization Structure (Formal Structure): The organization of Southwest Airlines is best described as an upside-down pyramid – an organization very much in line with the way they want to do business. The upper management is at the bottom and supports the front line employees, who are the experts. Front line employees play a major role in the yearly business planning and operational budgeting which for a great part is done bottom-up rather than top-down. This is the fruit of co-founder Herb Kelleher's unorthodox leadership style, in which management decisions are made by everyone in the organization, not just the head executives. The company does not put much emphasis on structure instead, employees are encouraged to think freely without constraints such as titles or official mandates. Culture (Informal Structure): The development improvement and refinement of originality, individuality and identity and personality of a given people. This is how southwest airlines define its culture. Southwest Airlines was built...
Words: 1027 - Pages: 5
...I. Company background Southwest Airlines is one of the US based major air carrier based out of Dallas Texas where it commenced operations on June 18, 1971. It was founded by Rollin King and Herb Kelleher got together and decided to start a "different kind of airline”. " They began with one simple notion: 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" (1). Southwest started with three Boeing 737 aircrafts with focus of serving mainly three cities in the state of Texas; Houston, San Antonio and Dallas. By summer of 1993 Southwest already became the 7th largest airline in the US. Today Southwest operated more than 3,400 flights a day serving 93 destinations across the US and five other countries in the Americas with over 665 aircrafts in its fleets. Southwest strategy is clear and simple, it’s a three headed monster strategy that focuses on, short-haul, high -frequency and low-cost. The NYSE symbol for the company is LUV, which indicated the home of the company at the Dallas Love Field airport and the theme of the cordial relationship created and maintained between Southwest employees and its customer. On Jan 22nd 2014, CEO and chairman of the board announced a record annual income of $1.1 billion or $1.64 per diluted share which is 20 cent higher than the industry average return per share during the same period. This...
Words: 2632 - Pages: 11
...Case Study: Southwest Airlines MGT 620X- Operations Strategy February 27, 2015 Executive Summary This case study will look at the various services that Southwest Airlines is looking to add to their current offerings. Whether or not satellite-based WiFi internet, extensive wine and/or coffee offerings, and the possibility of international alliances with other airline carriers are areas that should be explored to enhance services at Southwest. While each of the above mentioned services are all luxuries that many customers would enjoy having on a flight the airline the airline must establish if they are all luxuries that customers would also be willing to pay for. Southwest prides their business on being able to offer low-cost fares adding services would mean increasing rates. Southwest must determine if the risk is worth the reward. This case study will help Southwest make some of those determinations. Introduction: LUV Southwest Airlines is defined by their mission statement: “dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit” (Southwest, 2015). When making decisions on which path the...
Words: 1853 - Pages: 8
...I. Company background Southwest Airlines is one of the US based major air carrier based out of Dallas Texas where it commenced operations on June 18, 1971. It was founded by Rollin King and Herb Kelleher got together and decided to start a "different kind of airline”. " They began with one simple notion: 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" (1). Southwest started with three Boeing 737 aircrafts with focus of serving mainly three cities in the state of Texas; Houston, San Antonio and Dallas. By summer of 1993 Southwest already became the 7th largest airline in the US. Today Southwest operated more than 3,400 flights a day serving 93 destinations across the US and five other countries in the Americas with over 665 aircrafts in its fleets. Southwest strategy is clear and simple, it’s a three headed monster strategy that focuses on, short-haul, high -frequency and low-cost. The NYSE symbol for the company is LUV, which indicated the home of the company at the Dallas Love Field airport and the theme of the cordial relationship created and maintained between Southwest employees and its customer. On Jan 22nd 2014, CEO and chairman of the board announced a record annual income of $1.1 billion or $1.64 per diluted share which is 20 cent higher than the industry average return per share during the same period. This...
Words: 2632 - Pages: 11
...Kingfisher Airlines update” October 2008 Agenda • • • • • UB Group: The growth story (slide 3) Airline Industry Overview (slide 9) Kingfisher Airlines Overview (slide 18) KFA Financials (slide 25) KFA Outlook (slide 31) 2 31st October 2008 UB Group: Growth Story 3 UB Group’s growth story SUCCESS MANTRAS • • India’s Leading branded consumer group Has dominated domestic market − Accelerated organic growth − Acquisitions • • Is Globally Competitive Has set standards of governance and transparency 4 31st October 2008 No. 1 Beer in India No. 1 Spirits in India No. 1 Airline in India What next? Merged Hebertsons into MCD Kept acquiring smaller players in beer and liquor industry. Brought in Scottish New Castle Market gave thumbs up as Margins doubled to 18% because of synergies Acquired 100% stake in Whyte and Mackay, worlds 4th largest scotch company Acquired further 20% stake in Deccan Aviation through open offer KFA merged in DAL and the merged entity renamed as Kingfisher Airlines Limited UB Group 2002 TIMELINE 2003 2005 2007 2007 2008 Bought Gilbey Green lablel BUILT BRANDS LIKE KINGFISHER, BAGPIPER, BLACK DOG … Acquired Shaw Wallace & Co Ltd Consolidated Beer business under UBL and liquor business under USL Acquired 26% in Deccan Aviation- Announced merger of KFA with Deccan,; Acquired further 3% stake in Deccan Aviation to increase the holding to about 50% Announced...
Words: 3302 - Pages: 14
...Southwest Airlines' success in the airline industry. These elements include service, operations, cost control, marketing, and the corporate culture. Southwest made flying fun for employees and customers by making everyone feel like they are part of one big family. Management encouraged good relations between employees and passengers that resulted in high employee job satisfaction and low turnover. From an operational perspective, Southwest Airlines distinguished themselves from other airlines by incorporating cost saving programs such as the airline doing its own ticketing and not going through a travel agent. Southwest flew passengers nonstop to their destinations and did not promote connecting services. Southwest focused on flying passengers into uncongested airports and did not transfer baggage to other airlines. Only drinks and snacks were served on board. Southwest Airlines only flew newer Boeing 737 jets, which required less maintenance, and hence reduced the time needed to "turn" an aircraft around from an industry average of 55 minutes to 15 minutes or less. Southwest Airlines emphasized cost control and all employees worked together to minimize costs. Pilots developed new procedures regarding takeoffs and landings and fuel was purchased from vendors with the lowest prices. Marketing was an important element to the success of Southwest Airlines. Price, convenience and service were always emphasized along with the "Texan home-grown" image that Southwest Airlines wanted to...
Words: 2956 - Pages: 12
...Entrepreneur 1 Marketing Strategies 2 3.1Price-a low-cost strategy 3 3.2Product-the psychology of passengers 3 3.3Promotion-Speedy boarding 4 3.4Place-sales online and convenient airport 4 Organizational Culture 6 Employee motivation strategies 7 5.1 Share schemes 7 5.2 Your benefits 7 5.3 Straff travel 7 Conclusion 8 Reference 9 1.Introduction In recent years, the development of the aviation industry increase rapidly. Most of people choose the aircraft as travel transport, the annual number of passenger had a dramatic rise around the world,which had became a common situation. Easyjet Airline Company Limited (Styled as easyjet) is the largest airline of the United kingdom, whereas it is the second largest low-cost airline in Europe. The airline was established at 1995, and it headquarters at London Luton Airport. As a low-cost airline, Easyjet has own successful way. The intention of the study is...
Words: 1837 - Pages: 8
...Assignment 2 Introduction, brief description and core operation. Starbucks started its humble beginning at a small little shop front down by Pike place market in Seattle. It had pride itself for roasting high quality whole-bean coffee, and producing one of the best coffees in the neighborhood. Today, more than forty years later, Starbucks had become one of the major coffee chains in the world with more than 18,000 storewide in 62 countries. Starbucks main core operations derive from the sale of their beverages, retail and franchise operation; it also aims to provide the Starbuck’s experience. As stated on Starbuck’s mission statement, “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”. This statement shows that Starbucks is not just creating a business based on its product and services, it also aim to build a closer connection with their customers through a “people to people” approach. By creating the Starbucks experience with the customers, it enables them to provide an even better service to attract and retain its customer’s loyalty. Economic/Global impact Coffee beans and coffee beverage is made up the main core business that Starbucks operates on, with coffee bean as the second highest valuable commodity in market, it means that any economic factors might affect the costing of the coffee beans, which might result in price hike for their beverages. External ...
Words: 1169 - Pages: 5
...excellence: lessons from Singapore Airlines Singapore Airlines is well known as a paragon of in-flight service. It is also a remarkably efficient and profitable airline and has been for decades. Loizos Heracleous, Jochen Wirtz and Robert Johnston explain how it combines service excellence with cost effectiveness. Singapore Airlines (SIA) has achieved the Holy Grail of strategic success: sustainable competitive advantage. It has consistently outperformed its competitors throughout its 30-year history. In addition, it has always achieved substantial returns in an industry plagued by intermittent periods of disastrous under-performance (see Table 1). Cost-effective service excellence: lessons from Singapore Airlines SIA has done this by managing to navigate skilfully between poles that most companies think of as distinct – delivering service excellence in a costeffective way. SIA’s awards list is long and distinguished. In 2002 alone it won no less than 67 international awards and honours including “best airline” and “most admired airline” in the world in Fortune’s Global Most Admired Companies survey. Spring 2004 q Volume 15 Issue 1 Business Strategy Review 33 Since Michael Porter’s influential suggestion that differentiation and cost leadership are mutually exclusive strategies and that an organisation must ultimately choose where its competitive advantage will lie, there has been fierce debate about whether a combined strategy can be achieved – and sustained over...
Words: 3095 - Pages: 13
