SOUTHWEST AIRLINE

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The Ultimate Managers
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SOUTHWEST AIRLINES
The Freedom to Fly

Designed by ? Hamid Hussain Being a part of this
"Family" is the best!
Presented by The Ultimate Managers
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The Southwest Background
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Company Overview...
Background

• major domestic airline that provides
• primarily short haul
• high-frequency
• point-to-point
• low-fare service

Strategy
Impact
Analysis
Founded 1971
Fleet size 472
Destination 63
Headquarter Dallas, Texas
The third-largest airline in the world by number
of passengers carried and the largest in the
United States by number of passengers carried
domestically.
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Target Market

• First-time Fliers
• Business Travelers (Point to Point)
• Dissatisfied customers from full-service
  airlines
• People who travel by Road, Rail
• Leisure family travelers

Background
Strategy
Impact
Analysis
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Business Description ...
Geographical Segmentation
Southwest flies to 62 cities in 32 states in
America
Albany Columbus Indianapolis Midland/Odessa Philadelphia San Diego
Albuquerque Corpus Christi Long Island Nashville Phoenix San Jose
Amarillo Dallas (Love Field) Jackson New Orleans Pittsburgh Seattle/Tacoma
Austin Denver Jacksonville Norfolk Portland Spokane
Baltimore/Washington Detroit (Metro) Kansas City North Virginia (Dulles) Providence Tampa
Birmingham El Paso Las Vegas Oakland Raleigh-Durham Tucson
Boise Ft. Lauderdale/Hollywood Little Rock Oklahoma City Reno Tulsa
Buffalo Ft. Myers/Naples Los Angeles (LAX) Omaha Sacramento West Palm Beach
Burbank Harlingen/South Padre Island Louisville Ontario St. Louis  
Chicago (Midway) Hartford/Springfield Lubbock Orange County Salt Lake City  
Cleveland Houston (Hobby) Manchester Orlando San Antonio  
In selecting cities, Southwest looked for city
pairs that could generate substantial amounts of
both business and leisure traffic.
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The Southwest Background
Background

• Motivation
• demand for routes between major Texas cities
• Mission
• dedication to the highest quality of customer
  service delivered with a sense of warmth,
  friendliness, individual pride, and company spirit

Strategy
Impact
Analysis
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S
W
O
T
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S-W-O-T Analysis ...

• Strengths
• Low price tickets
• Low operating costs
• Good customer service
• High frequency service
• Productive pilots ground crews

• Weakness
• Doesnt serve international flights
• One type of airplane

• Opportunities
• Ability to add scheduled flights
• Low prices enable market share
• growth

• Threats
• Big companies emulate
• Southwest's low cost model
• Difficulty securing new gates at
• existing airports

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(No Transcript)
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Building Capable Organization ...
Staffing the Organization
Southwests Capability
Core Competencies and Competitive Capabilities
Matching the Organization Structure to Strategy
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Staffing ...

• Employee come first and Customers come second

Putting Together a Strong Management Team

• Developing leadership and communication skills
  for low level management
• Up and Coming Leaders received training in every
  departments over sixth-month period

• Hired employee for attitude and trained them for
  skills
• Analyzed each job category to determine the
  specific behaviors, knowledge, and motivations
  that job holders needed and with the desired
  traits
• A trait common to all job categories was teamwork

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Core Competencies Competitive Capabilities ...

• Developing a set of competencies and capabilities

Low Operating Cost

• Operate one type of aircraft.
• Make reservations and purchase tickets at the
  companys website.
• Tried to steer clear of congested airports,
  stressing instead serving airports relatively
  near major metropolitan areas and in medium-sized
  cities.
• Using point-to-point scheduling of flights.
• There is no reserved seat for each passenger.
• No first class section, no fancy clubs at
  terminal and no meals.
• No baggage transfer services to other carriers.
• Convert from cloth to leather seats

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Core Competencies Competitive Capabilities ...

• Developing a set of competencies and capabilities

Focus on Customer Customer Satisfaction

• Make sure passengers had a positive, fun flying
  experience.
• Presenting a happy face to passengers and
  displaying a fun loving attitude.
• Complaint letters were seen as learning
  opportunities for employees and reasons to
  consider making adjustments

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Key Success Factors (Low Cost Carrier Industry)

• Low Fares
• More destinations
• Operational Efficiency
• Turn Around Time
• Aircraft Utilization
• On time Performance
• Service Standards (Basic)
• Safety

Background
Strategy
Impact
Analysis
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Company Values ...

• LUV
• Code word for treating individuals, employees,
  customers
• Dignity, respect and caring loving attitude.
• Appeared on banners and posters at company
  facilities

Core Values

• Fun
• Entertaining behavior of employees in performing
  their jobs.
• The ongoing pranks and jokes.
• Frequent company-sponsored parties and
  celebrations.
• gt charity benefit games, chili cook-offs,
  Halloween parties

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The Southwest Background
Background

• Fun
• e.g. announcements to passengerssang, in-flight
  contests, holiday celebration
• Emphasized the selection of employees who could
  be empathic and bring pleasing personalities to
  the job

Strategy
Impact
Analysis
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LEAD
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SOUTHWEST vs AIRLINE INDUSTERY
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Airline Business Modal
Background
Airlines typically follow two types of business
models
Strategy

• THE POINT TO POINT
• THE HUB-AND-SPOKE

Impact
Analysis
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Southwest Analysis
Background

• Hub-and-Spoke

Strategy
Impact
Analysis
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Southwest Analysis
Background
Market Share US Low Cost carrier (LCC) Industry
Strategy
Impact
Analysis
Southwest Airlines is, by far, the largest Low
Cost Carrier in the US market
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Market Share (US Airline Industry)
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Southwest Analysis
Background
Strategy
Impact
Analysis

• Intra competitors
• Braniff International Airways, Trans Texas
  Airways and People Express
• Inter competitors
• Continental Lite, United Shuttle, Delta Express,
  US Airways MetroJet

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Southwest Analysis
Background
Strategy
Impact
Analysis

• Ticketing System Company
• Boeing 737
• Fuel Company
• Snacks Company
• Beverage Company

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Southwest Analysis
Background
Strategy
Impact
Analysis

• Businessman
• College Students

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Southwest Analysis
Background
Strategy
Impact
Analysis

• JetBlue (short distance)

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Southwest Analysis
Background
Strategy
Impact
Analysis

• Train
• Bus

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The Impact of the Event of 9/11
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9/11 Impacts ...
Airline Industry Southwest Airlines
The number of flights were cut by around 20 percent No flights were cut
Employees laid off no employees were laid off Temporary freeze on hiring until Jan 2002
The delivery of new aircraft on order deferred or cancelled Negotiated a revised delivery schedule for the 132 Boeing 737 jets on order
Speculation on how much to cut fares to induce passenger to fly and on low long traffic might stay depressed Fare sales in January, March, April, July, August, October and December 2002

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Future Improvements ...

• It is essential for Southwest Airlines to expand
  on their existing achievements.
• Better serve customers by improving their routing
  system.
• Offering enhanced accessibility and minimizing
  delays.

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I have a question....
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Thank You!
The Ultimat
Managers