Southwest Airlines Co Strategic Planing

7/21/2019 Southwest Airlines Co Strategic Planing

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Southwest Airlines



“If you get your passengers totheir destinations when they

want to get there, on time, atthe lowest possible fares, and

make darn sure, they have agood time doing it, people willy your airline.”

Core

Strategy



Southwest Airlines Started as an intra-stateoperator in the state of e!as in "#$"

Short haul, high fre%uen&y, low &ost strategy, andpoint to point route system

In "##' southwest held '.' (arket Share)

Southwest make the e!pansion to be&ome ama*or &arrier

+owest operating &ost in the domesti& airlineindustry

+ow &ost philosophy survived, a severe pri&ewar

Company Overview



Cost Leadership Strategy



OTHER

(ultiple typesof air&rafts areused

SOUTHWEST

Single type ofair&raft is usedthat is oeing$$



OTHER SOUTHWEST

On an averagethere were six

cabin crews.

(a!imum three&abin &rew



ther /ost +eadershipStrategy

0se se&ondary airports 1+ess&ongested2

perates in mid-si3ed &ities.+ow &ost pri&ing strategy

4o &omplementary meals

5igh utili3ation rate of eet ofair&raft.





arget /ustomer

/onvenien&e, time-

oriented travelers.6ri&e sensitive leisuretravelers.



“7apid 7ewards 6rograms” for

fre%uent yers.



8rowth f South9est

Fleet Size Net Income ($ 000s)

Passenger carried / per employee Aircrat !tilization ("rs)

Source: 1994 Annual Report


http://slidepdf.com/reader/full/southwest-airlines-co-strategic-planing 12/17S9 Analysis



Strengths

Strong eet operations

:ominant market position in 4orth Ameri&a

<riendly Sta=

est low fare &arrier

+argest airlines in the world in terms of highestnumber of passengers per year

7e&ogni3ed as a great value and e!&ellent servi&es

<le!ible working hours even though >?) of employeesare unioni3ed

Strong brand image

5ighest daily domesti& departures than any other&ommer&ial 0.S. airline



9eakness

:e&lining pro@ts and margins

5eavy dependen&e on passenger revenues

5eavy dependen&e on a single produ&er oeing

/onservative growth strategy +imited to &ities domesti&ally

perates its own booking servi&e

:oes not o=er segmentation 1business ights, @rst

&lass, et&.2



pportunities

7e&overy of 0S Airline Industry

A&%uisition of Air ran 5oldings

7e&overy of 0S tourism

International B!pansion +onger ights are being introdu&ed

raveller traC& is e!pe&ted to grow by -.D) through?E"#.



hreats

Intense &ompetition

7egulation restri&tions

6ri&e u&tuations in petroleum markets

5igh unemployment and ination keeps travellersfrom ying

Foint ventures &an negatively a=e&t brand image

B!posure to Shaky Ameri&an B&onomy



What Should SouthWest Do ? Indu&t more and more &ost saving initiatives

/ontinue with the same highly sele&tive pro&ess for re&ruitment

In&rease operations by e!panding operations or through (GAs

<o&us on te&hnology whi&h helps in&reasing fuel eC&ien&y

4ot &ompensate safety for frugality

(aintain the same operating eC&ien&y

9ork on more and more reward initiatives

4ot let the people be over&on@dent of the su&&ess and keep

motivating them

(aintain the same &ulture and employee satisfa&tion

Heep &ustomer servi&e as their main motto

Documents

Southwest Airlines Co Strategic Planing