1. Southwest Study Case Presentation

7/27/2019 1. Southwest Study Case Presentation

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Presented by:

NATHANAEL SURYA PRAWIRO

QURRATU AYUN AMRAN

RAMZI RINALDHI

VANIA PRASTICA P


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Southwest Airlines was the pioneer of low

cost carriers that originated from Love Field,

Dallas Texas at 1974.

What kept it low cost:

Flew a single type aircraft

Flew point

-

to

-

point routes.

One employee is capable of doing multiple

jobs.

What made Southwest interesting is the

rapid reward system.


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Problem 1: Southwest Airlines had a service

system that was not flexible and therefore

did not cater to the needs of its customers

Problem 2: Southwest Airlines did not

periodically change its product/service

development to follow the markets growth

and change.

Problem 3: Southwest Airlines is weak in

maintaining the core competency that it has.


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Certain customers demand preferred service

due to how much money they have contributed

to the company.

If we relate it to the

Service Package

(Chase &

Jacobs, 2011), the services provided by

Southwest did not fulfill two features which are

information

and

implicit services

.

Solution: Southwest could provide an online

service where customers could purchase

independently the services they wish to have at

an additional cost. For example, meals or seat

reservations.


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If we relate it to Design for Customer (Chase &

Jacob, 2011) we can see that Southwest did not

design their services to facilitate their customers.

Their services feels out

-

of

-

date and will not be able

to cope with the ever tightening competitions that is

growing day by day.

This also leads to making their rapid rewards system

less maximized.

Solution: Southwest could implement a mileage

system in which points could be used for tickets or

maybe to get prizes or to upgrade their seating

zones.


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Southwest has a weak long run competency.

There is nothing that makes it stand out from itscompetitors other than the fact that it has cheap

prices.

But as time goes by we can see that even withcheap prices, you can lose your loyal customersif your services is not being improved.

Solution: Southwest must make a periodicsurvey of what the wants of its ever changingconsumers are.


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Conclusion

Southwest Airlines needs to be aware of their loyalconsumers that feels their needs are not beingaddressed to. The event that happened to Liz Bastcould have happened to other customers that felt therules of Southwest is too strict and not flexible.

Even though Southwest is the pioneer of low costcarriers, they can not keep offering the sameservices to their customers each year. Customershave dynamic needs and the advancement ofproducts must be made.

The rapid rewards program is not the appropriatesystem for their consumers in this day and age. Theirconsumers now are looking more for better servicesrather than free flights.


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Southwest needs to think more to the longterm and not only the short term goals. Rapidreward is an example of a short term way toget the markets favor. But in the long run

due to the lack of better service and a weakcore competency, its loyal customers willslowly deplete.

Southwest must make periodic surveysabout its customers and provide additionalservices that are optional to the customersthat are willing to pay extra to get it.


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Lesson Learned

As a company that deals with service, Southwest Airlinesmust include their consumers in making strategies anddecisions. This is because service products deal heavilyon their consumers demands.

Improvements or innovations in services are neededperiodically to fulfill the needs and wants of theirconsumers that are so dynamic to keep up with the everchanging market and to increase their competitiveness.

To know and understand the needs of consumers is reallyimportant. This could help a company increase their

services, make a new product, and to see how the marketviews a certain product, and in return to also see thestrength and weaknesses of another product.


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Documents

1. Southwest Study Case Presentation