Case study analysis of

Southwest Airlines
Presented by:

Pujara Pratik
Modi Vicky
Moriya Hasanabbas
Kalor Chetan
Chuhan Aanad

Overview of the company

Southwest Airlines based in Dallas was founded
in 1967 by Rollin King and Herb Kelleher.
It is one of the major domestic airliners which
provides carrier and transportation service.
This company has 35,499 employees and it runs
over 500 Boeing 737 aircraft in 67 cities in the
US.

Southwests principal values are

Providing low-fare and Quality service.
Offering the highest quality of customer service.
Putting a lot of importance on the fair treatment
to its customers.
Building friendly relationship between its
customers and employees.

Culture of South West Airlines

Casual dress code

Field visit
Strong guidelines for every one.
At par with industry norms.
Pension through profit sharing plan

Their strategy

Southwest Airlines has achieved a great position in the

airline industry by adopting five important strategies.
(1) First, using the minor league airports which have
helped the company to reduce traffic delays and
increase passenger convenience.
(2) Second, flying one kind of aircraft has helped it to
achieve lower training cost.
(3) Third, reducing turn-around time by using point-topoint strategy, has avoided the use of complicated
reservation process system.

 Forth, not offering assigned seating and preferential

treatment on frequent fliers, has led the company to
have better ticket price.
Lastly, emphasis on building good relationship between
passengers and attendants has been a well valuable
factor.

Seven secret strategies of

southwest

One Plane Fits All

Point-to-Point Flying
Simple In-Flight Service
Customer perspective
Strong Management
A Relatively Happy Workforce
Aggressive Fuel Hedging save after 1999
$3.5 billion.

Southwest Airlines main competitor

USAir ways
Delta
United airlines
American Airlines
Alaska Airlines
America west Airlines

Questions
Question no: 1 What is mission and objective of Southwest Airlines?
Answer: The mission of southwest airlines is to is dedication to the highest
quality of customer services delivered with sense and warmth, friendliness,
individual pride, and company spirit .

1.
2.
3.
4.
5.
6.
7.

Long term objective

Reduce employee turnover
Increase product quality by
Decreasing operating cost
Increase internet sales
Decrease customer complain
Provide customer satisfaction
Continue to effectively hedge price

Conti..
Question no: 2 What is the strategy of Mr. Lamar
muse to reach the success?
Answer: Muse is a very intelligent and very much
self confident person and his strategy is we do
whatever we have to do to get the job done.
that is his main strategy towards to get the
success. He sought all his team member as his
own he select those person who is innovative
and do work differently from others.

Conti.

Question no: 3 What is the struggle of

southwest to gain market foothold?
Answer:
1. They were adding more and more flight
2. Muse come up with $10 fare at Friday night
between Houston Dallas flight. While other
were taking $13. Before 7pm the price was
$26 per passenger.
3. Southwest was the only one airlines who
provide alcoholic during day time.

Conti.
4.They try to fill empty seats at lower rate
from $26 to $13
5. Southwest was the only airlines who
provide new station like Houston hobby
through this station the business of
southwest is double.
So these struggle helps to southwest to
get market foothold

Conti...
Question no: 4 What is the strategy of
Mr. Herb Kelleher to reach the level of
success?
Answer: Mr. Herb Kelleher was the person
whose style was to listen, observe, and
offer encouragement. His simple strategy
was to provide encouragement to all
employee and do best for each work.

Conti
Question no: 5 What is the legal regulatory
hurdles to southwest airlines?
Answer: it is nothing but rival airlines were
protest against southwest airlines for the
arguments that these market were already
well served if southwest enter in Texas it
will costlier to all other airlines.

Conti.

Question no: 6 SWOT analysis of

Southwest airlines?
Answer:
(1) Strength
Sensible expansion policy
Strong market capitalization
Efficient operation
Produce positive of profit every time

Conti..
(2) Weakness
Little room for strategic development
No established alliance
Fully valued share price
(3) Opportunity
Low cost position
Geographical expansion
Continue streamlining
Merger and aquisition

Conti.
(4) Threat
Cost of operation
Unstable airlines industry

Conti.
Question no: 7 What is current position of southwest
airlines?

Answer:

Southwest Airlines has succeeded because

of their marketing orientation. This marketing orientation
has led to target pricing, or pricing from the customers
perspective of value backwards to the product definition
and cost. The result has been one of the most profitable
airlines in the history of commercial air traffic.

Conti
the current performance of southwest
airlines is very good.
The ROI of the company is steadily
increasing and Southwest has consistently
rank 1st by getting 80%-90% market share
by top 100 city pair routes.
While in overall industry in 2000 the total
market share is 9.4%.

Conti
Southwest airlines is profitable since 1973
and till this year. In between this period
1or 2 year they suffer from loss.
In 2001 their profit was $511.1 million for
the full year

Recommendation

First, the main problem will be solved by giving clients, such as , the
opportunity to decide their seats with extra fee. In addition, this
solution will keep the companys customers more satisfied and at
the same time increasing their loyalty.

Second, solution number two will increase the companys revenues.

According to The Wall Street Journal, by receiving extra fee on
assigning seats, Southwest could add seven hundred fifty million
dollars ($750.000.000) in its year revenues.
it is a long-term solution. By giving an advantage to the customers
who make their reservation earlier, Southwest will strengthen its
position among competitors, and the major problem will be solved.