...Strategic Management Case Analysis: Southwest Airlines Southwest Airlines Co. (Southwest) is often cited as a success story in terms of strategic management. Southwest is a passenger airline that provides scheduled air transportation in the United States. Primarily, the company offers passengers low-fare, point-to-point air transport services in 72 cities in 37 states all throughout America (MarketLine, 2012). Southwest is headquartered in Dallas, Texas, and has about 45,392 employees as of FY2011. For FY2011, the company generated revenues of $15.658 billion, increasing by 29.4% over FY2010 (MarketLine, 2012). Southwest reported net profit of $178 million in FY2011. It must be noted that the airline industry is famed for its cut-throat competitiveness. However, since its inception in 1971, Southwest has been able to steadily rise to the top of airline rankings due to its Low Cost Leadership strategy (Muduli & Kaura, 2011); Box & Byus, 2009). Southwest also consistently offers on-time arrival that, combined with low-priced fares, makes it highly favorable for passengers. Southwest is able to achieve its strategy by using a linear, point-to-point network and does not have an airport hub (Tierney & Kuby, 2008). As a result, the company’s aircraft are seldom idle while its competitors spend prolonged idle time while passengers switch planes at the hub (Tierney & Kuby, 2008). Because of the impact of this strategy on passengers and the industry as a whole, competitors tend to...
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...Strategic Management and Strategic Competitiveness Name Professor BUS 499 Business Administration- Capstone Strayer University- Maitland Campus April 13, 2014 Abstract The purpose of the paper is to research and understand how the changes of globalization and technology have impacted the Airline industry. This paper will also apply the industrial organization model and the resource-based model to determine how the Airline industry earn above-average returns. This paper will explain how the Airline industry’s success is through its mission and vision statements with Southwest Airlines as an example. Finally, this paper will evaluate how the importance each category of the stakeholder impacts are to the overall success of the Airline industry. Globalization and Technology In today’s business industry, the globalization process has become an important aspect and fundamental force. The elements that contribute to globalization is the environment, culture, regulation and technology and production. While the advancements globalization has increased greatly, so has the advancements in airline industry with their aircraft (Shevell, 1999). Globalization also provides a great amount of potential profits to nations and their corporations (Button, 2008). Air transportation has evolved into a major industry (Kroo, 1999). The airline industry’s continuously grows and is facilitated through its international investment...
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...Southwest Airlines Research Report Tommy Best - Jessica Johnson - Adam McCormick Laura Monday - Evvan Tolly - Jessica Wirth Mary Wrenn ADV 340 - Dr. Childers - Fall 2009 Table of Contents Industry Overview Introduction....................................................................................................................................................................................................................... 1 History............................................................................................................................................................................................................................... 2 Size of Industry.................................................................................................................................................................................................................. 2-3 Stage in Product Life Cycle.................................................................................................................................................................................................. 3-4 Seasonality......................................................................................................................................................................................................................... 4 Growth Potential/Forecasts..........................................................................................................
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...Southwest Airlines Evaluation of Current Research Techniques Used Southwest Airlines uses many different types of research over the last 20 years. As a customer of Southwest Airlines, I have personally experienced the following techniques, phone, paper, and email surveys. Representatives from Southwest request customers to stay on the line after booking travel to complete surveys on their experience with the reservation line. These surveys last 5-7 minutes on average and included the customer’s perception of the booking process. Southwest Airlines has placed surveys in the company ‘Spirit’ magazine. These magazines are available to customers both online and in the seat pocket on each flight ("Spirit", 2012). This allows customers to fill out the survey and return to the flight attendants, gate agents or mail into the company. The survey requests information on the flight and booking process. Southwest Airlines has recently starting sending email surveys to their Rapid Reward customers. After the customer travels using their reward number, a survey will be sent to retrieve the perception of the event from the traveler. This includes information on all events of the trip from booking to baggage claim. When working as a travel agent, Southwest Airlines had customer representatives that contacted the agency by phone to conduct surveys. These surveys included questions about reservations, flight status, gate staff, and baggage of the customers. If a customer complain was received...
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...Business Research Methods Part III Learning Team A QNT 561 May 19, 2011 INTRODUCTION The airline industry has been devastated by rising fuel costs and the declining economy. The fuel costs in the USA have risen to levels that have led Southwest’s management to evaluate options to promote ticket sales during this tough economic time. The focus of Southwest Airlines is to survive, continue to be competitive and make a profit. The recent history of struggles they have encountered mainly due to the economy, fuel costs, and also the structural damage of the aircraft. Southwest has had to develop and execute plans to improve their business to retain a strong company. Southwest’s management team has requested a research team using a survey as the main instrument to help understand the airlines travelers concerns and desires to prevent them from seeking travel to other airlines. The research conducted will provide management with some insight into the reasons travelers will continue to utilize southwest as there primary airline of choice. BACKGROUND Southwest Airlines has built its culture and its reputation from the inside out. It values a happy workforce, and believes that its 32,000 satisfied employees will keep customers coming back. Southwest sees the importance of building and sustaining strong internal relationships. They believe in promoting from within and providing employees the opportunity to grow and learn from one another. Everyone at Southwest understands...
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...Principles of Marketing December 6, 2012 Southwest is the leading and largest LCC (low cost carrier) in the airline industry and the United States. Southwest formerly, Air Southwest, prides itself on quality customer service and holds its employees in the highest regards. Southwest embodies its mission statement; “The Mission Statement of Southwest Airline is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.” Air Southwest Co. was born in 1967 over a dinner with Rollin King and Herb Kelleher. King who, verbalized his concept as “if you get your passengers to their destinations when they want to get there, on time, at the lowest possible fare and darn sure they have a good time doing it, people will fly your airline.” He further demonstrated this on a paper napkin. (Wikipedia 2009) This concept grew into Air Southwest flying intrastate to three major airports, which included Dallas, San Antonio, and Houston. The flights remained within the state to avoid Federal Regulation, which resulted in a storm of backlash from three major airlines; Braniff, Trans-Texas, and Continental Airlines, and started legal action against Air Southwest, that went on for three years. In 1970 Air Southwest triumphed in the legal battle against these airlines and changed its name to Southwest Airlines in 1971. Lamar Muse was hired by Southwest as president. Mr. Muse brought with him years of experience...
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...MARKETING TERM PAPER FOR [pic] AIRLINES: A MODEL OF EXCELLENCE IN THE CIVIL AVIATION INDUSTRY Table of Contents 1.0 INTRODUCTION 3 1.1 Company Background 3 1.2 Research Topic 5 2.0 ENVIRONMENTAL ANALYSIS 6 2.1 Political, Economic, Social and Technological Analysis 6 2.2 Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis 7 2.3 Summary 9 3.0 SEGMENTATION, TARGET AND POSITIONING (STP) 10 4.0 PRODUCT, PRICE, PLACE AND PROMOTION (4Ps) 11 5.0 CONCLUSION 12 6.0 REFERENCES 13 6.1 ANNEX I 14 INTRODUCTION The Airline Industry has experienced global economic and ecological turmoil in the past two decades. This turmoil has brought to the fore the challenges being faced by the Aviation Industry in the world which have, in most cases, led to decreased profitability, lower growth rates, safety concerns and employee lay-offs among others. However, in-spite of the above mentioned challenges in the industry, Southwest Airlines has emerged as one of the most creative, most price competitive, safe, innovative and flexible company in the industry. The company has overcome unsurmountable challenges to become what is perceived today as a successful model of excellence in the industry with an extraordinary safety record in the last 40 years. In its forty-three years of service, the Dallas-based Airline continues to differentiate itself from other carriers with exemplary customer service delivered...
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...SEDL – Advancing Research, Improving Education in School, Family, & Community Connections Annual Synthesis 2001 Emerging Issues SEDL – Advancing Research, Improving Education in School, Family, & Community Connections Annual Synthesis 2001 Emerging Issues Catherine Jordan Evangelina Orozco Amy Averett Contributors Joan Buttram Deborah Donnelly Lacy Wood Marilyn Fowler Margaret Myers National Center for Family and Community Connections with Schools SEDL 4700 Mueller Blvd. Austin, Texas 78723 Voice: 512-476-6861 or 800-476-6861 Fax: 512-476-2286 Web site: www.sedl.org E-mail: info@sedl.org Copyright © 2002 by Southwest Educational Development Laboratory (SEDL). All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval system, without permission in writing from SEDL or by submitting a copyright request form accessible at http://www.sedl.org/about/copyright_request.html on the SEDL Web site. This publication was produced in whole or in part with funds from the Institute of Education Sciences, U.S. Department of Education, under contract number ED-01-CO-0009. The content herein does not necessarily reflect the views of the U.S. Department of Education, or any other agency of the U.S. government, or any other source. Table of Contents Acknowledgments. . . . . . . . . . . . . . . . . . . . ...
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...Organizing Paper Boeing is the largest manufacturer of commercial and military airplanes, is the world’s leading aerospace company, and has a long tradition of leadership and innovation in the aerospace industry. Boeing is an international company headquartered in Chicago, Illinois, and employs more than 158,000 employees worldwide. The company’s corporate structure consists of the Boeing Commercial Airplanes and Boeing Defense, Space, and Security Divisions (Boeing, 2010). In the early 2000s Boeing struggled and was surpassed by Airbus in annual airline sales. Through the organizing function of management, Boeing is once again the leader in the aerospace industry, continues to build a competitive advantage, and is more flexible, innovative, efficient, and responsive to its customers. The organizing function of management follows the planning function and requires management to develop and organizational structure, assemble and coordinate the human, financial, physical, informational, technological, and other resources needed to achieve the organizations goals. To be effective, managers need to use new forms of organizing and possibly view people as the most valuable resource. Companies will departmentalize an organization during this function of management. Examples of departmentalizing an organization include organizing by function, product, geography, or customer. Although the organizing function of management consists of assembling and allocating the...
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...Professor Burnell Carden August 24, 2013 Introduction The intent of this paper it to define critical concepts of strategic planning with Southwest Airlines (SWA) top management and how their organization pursued choices and different strategies to run the business by using superior performance employees that gave them a competitive advantage over their competitors. I will concentrate on the thirteen strategic staffing decisions that are critical for any organization to be successful. I will also emphasis the knowledge, skills, abilities, and others (KSAOs) relative to the staffing process and how the company teaches these skills to the employees. This paper will focus on the success of the employees of the organization through the eyes of its past CEO Herb Kelleher. “We want to show them they’re important to us as who they are, as people. And by the way, one ramp agent - I have not disclosed this - sent me a note one day which I’ve never publicized, and I think you’ll understand why.” He said, “Herb, I finally got it. Your making work fun, and home is work.” (Herb Kelleher 2013) SWA was formed in 1971, to serve the inner cities within Texas but by 1998, it had 24,000 employees and 2,500 flights per day. The business was growing fast and the company worked hard at developing and maintaining a culture that it still emphasizes and instills today; flexibility, family orientation, and fun. Southwest airlines philosophy is about the people. It has been consistently successful...
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...adaptability and cooperation. Labor relations involve management’s ability to or strategies utilized to prevent and resolve workplace issues with employees. For example, Germany's Volkswagen utilizes a program called, Works Councils (Finkin, & Kochan, 2014). This program allows employees to share their work to reduce working hours rather than allow management to lay off employees at the company. On the other hand, Southwest Airlines, and Kaiser Permanente tailored programs specific to fit their individual company needs (Finkin, & Kochan, 2014). Lima Tire Company, a subsidiary of Treadway Tire Company was having issues with high operational cost and high turnover among foremen. Although the programs that were designed to control labor relations for the company; they were not effective as the company hoped. The company still faced the issue of a dysfunctional organization (Skinner, & Beckham, 2008). So, what are some of the strategies utilized by U.S. union free organizations today and why is it critical to the success of an organization to meet its goals and mission? This paper presents a summary of Lima Tire Company, a non-unionized organization, provides an alternative to handling its major problems, and provides a recommendation to help with the major issues. Brief Case Overview By the opening of the Lima Tire Plant in January 2008, Ashley Wall, the current Director of Human Resources has to devise plans that will correct several serious problems the company faced. Currently...
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...Contents South West Airlines 4 Goals and Objectives 5 Their Mission and Vision Statement 5 Strengths 6 Weaknesses 6 Opportunities 8 Threats 8 Analyzing company’s external environment 9 Analyzing the nature and strength of competitive forces 11 Competitive pressure stemming from bargaining power of buyer: 16 Determining whether the collective strength of the five competitive forces is conductive to good profitability: 17 Competitive pressure from seller of substitute products 18 Sign that competition from substitute is strong 19 Competitive pressure stunning from supplier bargaining power 20 PESTEL ANALYSIS 24 SCENARIO PLANNING 56 SCENARIO NO.1 58 SCENARIO NO.2 59 SCENARIO NO.3 59 SCENARIO NO.4 60 SCENARIO NO.5 60 SCENARIO NO.6 60 SCENARIO NO.7 61 SCENARIO NO.8 61 Competitors Objectives 62 Competitor's Current Strategy 63 Competitor's Resources and Capabilities 64 Competitor’s Assumptions 66 Regional Factors 67 Value chain activities: 68 Key competitive advantages: 72 Solutions: 82 Weights of Key success factors in five airlines: 86 COMPETITIVE ADVANTAGE 92 FIVE GENERIC COMPETITIVE STRATEGIES: 92 LOW COST PROVIDER STRATEGIES: 92 DIFFERENTIATION STRATEGIES: 95 BEST-COST PROVEDER STRATEGIES: 96 FOCUS (MARKET NICHE) STRATEGY: 96 STRATEGIC ALLIANCE AND PARTNERSHIP: 97 MERGER AND ACQUISITION STRATEGIES. 98 VERTICAL INTEGRATION. 98 OUTSOURSING. 98 OFFENSIVE...
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...Implementation By Rhonda Stanley A Paper Presented in Fulfillment of the Requirement for BUS599 Strategic Management Strayer University Professor Joel Nwagbaraocha September 9, 2010 1. Discuss the corporate culture at Southwest Airlines and how it leverages its culture to achieve a competitive advantage. Southwest Airlines was incorporated in Texas in June 18, 1971. Southwest started with only 3 Boeing 737 aircraft and they only serviced Houston, Dallas, and San Antonio. Today Southwest operates 541 Boeing 737 aircraft and they service 69 cities. Southwest became a major in the airline industry in 1989 when it exceeded the billion dollar mark in revenues. Southwest is the US most successful low fare high frequency airline. Southwest operates more than 3,510 flights a day coast to coast making it the largest US carrier based on domestic passenger carried. Southwest maintains the third largest passenger fleet of aircraft among all of the commercial airlines. According to the Department of Transportation Bureau of Transportation Statistics Southwest carries more passengers than any other US airline. Southwest profitability business model led to a common trend called the Southwest Effect. The Southwest Effect is to show that it is less expensive to take a flight than driving between to points. Southwest entered the airline market at rates that allowed the airline...
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...SOUTHWEST AIRLINES FUEL HEDGING AND RELATIONS TO PROFITABILITY 1 Southwest Airlines Fuel Hedging and Relations to Profitability A Case Study in Cost-effective Fuel Management SOUTHWEST AIRLINES FUEL HEDGING AND RELATIONS TO PROFITABILITY 2 Abstract In order to stay airborne, a passenger airline has to consistently generate profits. Profits come only from paying passengers, hence all stratagems must be customer oriented. In a scenario where there are many airlines competing with each other, one way of attracting passengers is to keep the cost of flying low, while providing value for money. On the other hand, expenses must tightly controlled to reach and stay at the lowest possible. Certain expenses are unavoidable; however, one variable that can be kept low through decisive planning and foresight is the cost of fuel, which, at best, can be called volatile. A good way to achieve this is by hedging fuel cost, which is a complex, but rewarding process, as Southwest Airlines proves beyond doubt. SOUTHWEST AIRLINES FUEL HEDGING AND RELATIONS TO PROFITABILITY 3 Southwest Airlines Company: A Case Study in Managing the Cost of Aviation Fuel Introduction: Southwest Airlines Company, an American low-cost airline is the third largest airline in the world as well as the U.S.A. by the number of passenger aircraft among all of the world's commercial airlines (Arlene Fleming, About.com Guide; nationsonline.org), operating more than 540 Boeing 737 aircraft today between...
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...Herb Kelleher, co-founder of Southwest Airlines said, “Think and act big and grow smaller, or think and act small and grow bigger (Herb Kelleher Quotes…).” Marketing is an important part to selling a brand. In 2012 the Social Media Agency, “Likeable Media,” named Southwest Airlines in their top five most likeable companies (Five Most Likeable…). Likeable Media commends the airline for its passion for their employees as well as their customers. This in turn creates a passionate staff that encourages Southwest’s brand and helps it to grow. Southwest has been around for thirty nine years and has used multiple marketing strategies to grow their company. Herb Kelleher and Rollin King founded Southwest Airlines in 1971, flying to San Antonio, Houston, and Dallas. The company pioneered many marketing strategies that are still used today. Southwest offered the frequent miles program is the mid 1980’s, the first airline to enact the program. Passengers were able to save up the amount of miles they flew to fly for free or a discounted ticket. Southwest was also the first to offer senior citizen discounts on airline tickets. By 1984, Southwest was ranked first in customer service for four years in a row. In 1987 the company bought out TranStar Airline, and also Morris Air in 1994. After twenty five years, the company was rated the fifth largest United States air carrier, flying over fifty million passengers a year (Southwest Airlines). Marketing is very competitive between airlines,...
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