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South west airlines case presentation (strategic management & operations)

This document provides information about Southwest Airlines, including its history, operations, achievements, and strategies. It was founded in 1971 in Texas as a "discount airline". Key points are that it operates over 90 destinations within the US using Boeing 737 aircraft, has over 46,000 employees, and has achieved over 40 consecutive years of profitability. Its strategy focuses on low fares, high-frequency short flights, and excellent customer service.

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SOUTHWEST AIRLINES BY-VISWACHAITHANYA (2T3-11) ANUPAMA (2T3-12) D. PALLAVI (2T3-13) EVITA (2T3-14) BHANU PRIYADARSHINI (2T3-15) G. SAI SOWJANYA (2T3-17) Siva Sivani Institute of Management , Kompally, Hyderabad(2013-2015 )
About SouthWest Airlines Started Services in Texas in U.S. by Herb Kelleher and Rollin king in 1971. Known as a “discount airline” since 1973. • 737 Boeing Air crafts, • 46000 employees, • 3600 flights per day • Providing services in an approximate of 57,900 customers per day. • 93 destinations over 41 states .
MISSION • Dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit. • It primarily provides short haul, high-frequency, point-to-point, low-fare air transportation service among 93 destinations in the United States.
Achievements • 2014 – Travelers Choice Award. • 2003 Selected as “AIRLINE FOR THE YEAR” • 2007 included in top 100 most innovative technology organization. • First airline to establish a home page on internet • Ranked number one in customer service • 43 consecutive year of profitability
• How they acquired the #1 position in terms of services providing to customers and what are the strategies they are following to achieve these continuous profitability?
UNIQNESS • Service • Operations • Cost control • Marketing • People • Corporate culture
Southwest Service • Passengers related activities • Employees related activities • They encourage good relations between employees and passengers. • They made an experiment by giving traditional tickets.
SouthWest Operations • Own ticketing • Travel agents – 10% commission, 55% booked by them. • Flew into uncongested airports which reduced 15%-25% of average flight time. • Interline baggage–doesn't coordinate with other airlines. • Drinks and snacks were served • 84% unionized workforce
• Southwest flew only BOEING 737 JETS. • The company had 150 that, in total, flew an average of 1,500 trips per day. • The 737 was the smallest plane in Boeing’s fleet, seating 137 passengers. • The 737s had an average life of 20 years. • The average age of Southwest’s planes was seven years, one of the lowest averages in the industry.
SouthWest Cost Control • Cost control in operations like fuel • Gate costs and landing fees differ everywhere. • No. of departures, 10 from each gate.
Marketing • Expansion in new cities • Public relations- Sponsored golf tournament • Ambassadors- customers
People • Customers are important in selection process, provide feedback in decision making • Peer hiring, pilot-pilot hiring and line employees- lines employees hiring. • Cross training- Switch jobs and Broad latitude – serve customers. • Recognition • Compensation was low, but the employees had psychological satisfaction
INVERTED PYRAMID APPROACH
Corporate Culture • The feeling of the place • Small family and spirit • Working towards one common goal
SWOT ANALYSIS Strengths: • Employee Satisfaction • Low fares • Stable profitability • Scheduled services • Leadership • Customer service Weakness • No international flights • Carry small amount of freight and cargo
Opportunities • Focus on international level. • Focus on popular destinations. Threats • Fluctuation in fuel charges.
Growth Strategy • Expansion-trouble with facilities • New cities and routes-not for everyone and everywhere Marketing entry strategy • Low operating costs • Load factor- adding services to balance supply and demand
Fuel hedging (1998) • Purchased fuel options for years in advance to smooth out fluctuations in fuel costs • Substantially increased its hedging in 2001 in response to projections of increased crude oil prices
The immediate expansion decision (Delivery of two uncommitted 737’s) • The first option was to expand within the system and add a new segment directly between Detroit and Phoenix. • The second option was to enter the Dayton market. • The final option was to establish a base on the East Coast, initiating service in Baltimore.
Challenges of SouthWest Airlines • Meeting growth objectives while maintaining focus • Preserve the SouthWest culture and spirit that had enabled it
1st Option 2nd Option 3rd Option • Average: $2.50 • Detroit and Phoenix • 3 trips per day • Gate and landing fees are high • Phoenix- $2.75 • Detroit- $3.25 • 500 letter written • Average: $2.5 • Dayton market • 226 miles • 9,70,000 population • Relatively stable • Fare raising • 50 min TAT • Dayton-2.00 • Average: 2.5 • Baltimore • 2.4 million people • 611 miles • 90 minutes • Weather conditions • Delays-50%
Thank you!!!!!!