The next step was to come up with a marketing mix strategy of price, place, product and promotion to achieve its objective. They have reduced cost of maintenance by using one type of efficient plane basically Boeing 737. Executive Summary Southwest Airlines is one of the most profitable airlines in the airline industry. Once the review is complete, an analysis of whether or not these organizational components fit in with Southwest current strategy. Moreover, the no-frills approach to customer service contributed to the low cost of operations for Southwest. Southwest has to respond effectively to these unexpected developments and has to act accordingly while maintaining their current low fare image and increasing their daily operating profits. In order to keep their fares low Southwest airlines must keep their costs low.
Southwest led the way with the first airline web page— southwest. Southwest, however, elected to decline à la carte pricing and stayed with an all-inclusive fare price structure. Employees can connect with managers or even the president immediately whenever they want to deliver opinions and suggestions. All of these would cause a great loss in the market share of Southwest Airlines and its lead in the airline industry. K , 1986 Macroenvironmental Analysis for Strategic Management. Southwest Airlines has Colorful People During the inception of Southwest Airlines operations in a move to gain its standing in the industry it adopted a strategy to make its customer feel relaxed and created a scenario of its plane being a place to catch fun and hang with friends or loved ones. At the onset of the airline industry in the United States, major network airlines were the sole providers of air travel.
The staff of Southwest Airlines are trained and motivated to relate in a friendly manner with the customer. The impact of deregulation became evident in several areas: Removing regulatory price controls was followed by lower average… success of Southwest Airlines? Increased amount of upper level business travelers has led to greater demand for better seats. To what do you attribute the success of Southwest Airlines? Southwest Airlines has continued to dive head first in the strategic practice of efficiently utilizing its resources to get the maximum out. The staff has had to really keep to this, making sure the airline succeeds and competes favorably against its counterparts. Such low cost model of the corporation is brought about by an effective strategy.
Aside from the fact that there are already so many established airlines that have good names and reputations, the vulnerability of the industry to economic cycles somehow add difficulty for new entrants. Is the strategic perspective likely to be different than if this was a corporate business? Always the innovator, Southwest pioneered Senior Fares, a same-day air freight delivery service, and Ticketless Travel. An example is the Wright amendment named after James Wright, then Speaker of the House. In many instances, the rivals of Southwest Airline had engaged the organization in litigation suits and other developed strategies to run the Southwest organization out of business. He said Internet use by passengers was helping the carrier keep fares at low discount levels. The Southwest airlines Way: Using the Power of Relationships to Achieve High Performance.
The company also has a well-earned reputation for listening to its customers. Southwest is focused on serving its customers with respect and satisfying customer needs to the best of their ability while maintaining the highest quality service and lowest prices. Supervisors and employees work side by side, which promotes trust and understanding… 1. But the airline will inevitably endure some cost pressure as new contracts take effect after tense negotiations. Do you plan for expected shifts? Strategic management for public accounting. Human Resource Management Herb Kelleher was a strong believer in the principle that if a company keeps its employees happy, its employees will in return keep its customer happy.
The business analysis and project management teams actually conducted ethnographic interviews with its customer base. Now, when Southwest enters a new market, they use a sophisticated combination of advertising, public relations, and promotions in the belief that once people fly Southwest they will be hooked. The mission statement is the most public and visible part of the strategy management process, it must include the 9 elements: Customers, Products or Services, Markets, Technology, Sur vi val gro wth and Pro fit abi lit y, Phi los oph y, Sel f-c onc ept , Con cer n for pub lic im age and Concern for employees. There are so many opportunities coming available to the organization. These hiring criteria apply to all job functions since all Employees at Southwest play a customer service role. It does not have any particular weaknesses in its current corporate strategy Southwest Airlines can further imbibe e-commerce technology in its operation through developing applications for smart phones that enable customers to purchase tickets, check for promotional and discount offers, and check in. Moreover, the company has used technologies in its favor to sustain efficiency in its business operations.
When the economics of the country is stable, then the life cycle of the firm is longer. The airline's objective is to convey an essential administration proficiently. Its ability to offer its large passenger base access to near international leisure destinations is a natural progression, and should create some revenue upside once the markets reach maturity. As far as the employee training is concerned, the employees are extensively trained so as such to ensure that they are able to satisfy the arising concerns and needs of the customers effectively and efficiently. Although return on invested capital is commonly used as a measure of capital efficiency, definitions of return on invested capital may differ; therefore, the Company is providing an explanation of its calculation for return on invested capital before taxes and excluding special items in the accompanying reconciliation. That is part of the Southwest culture. Southwest has not strayed from these goals.
It also allows Southwest to compete above and beyond its rivals, who have made it a clear point they want Southwest out of the airline business. What was found, was that Southwest has a strong culture, which ties most of the strategies together. For instance, while other airlines use the Hub-and Spoke flight routing system, the Southwest engages on Point-to Point system. This amazing and continued success is attributed to its great leader Herb Kelleher. This efficient management of time and resources has allowed the organization to win the goodwill and continuous patronage of its customer.