A Case StudyPresented by:

A d a r s h | D i v i j | A b h i s h e k | C h h a v i | M a n i

World’s largest low cost carrier Established in 1967, it is headquartered in Dallas, Texas

“Make Love. Not War.” had become its theme – called as “Love Airline”

Has ‘LUV’ as its stock ticker symbol as well!

Use non-conventional models for

low cost

Have fun together

Treat employees as

family

Hire people who form the

fit

Involve employees

Controlled solid growth

The Southwest Model

Strategies

Arenas

Vehicles

Differentiation

Staging

Economic Logic

Strategies

Arenas

Vehicles

Differentiation

Staging

Economic Logic

ArenasSW airlines has always focused on the domestic airline market of the US with complete focus on being efficient and a leader in the short haul flight markets. Also, it targeted margin expansion as one of its goals in 1997.Its mission includes dedication to the highest quality of Customer Service at reasonable prices.

Strategies

Arenas

Vehicles

Differentiation

Staging

Economic Logic

VehiclesSeveral means to attain the objectives – Less travel agency exposure – less commission.Emphasis on less crowded secondary airports allowing easier expansion.Brilliant labor relations of the company.A “Positively Outrageous Service(POS)” strategy for providing top quality service.Identifying target markets and dominating the ones having high population densities.A “loose-tight” design’s concept with respect to employees and rules

Strategies

Arenas

Vehicles

Differentiation

Staging

Economic Logic

DifferentiationBeing the best as far as price, convenience and service to customers are concerned. Placing special emphasis on employee relations , training employees and a rigorous selection process(less than 5% selection rate) ensures that they always get the best employees who replicate the good behavior as they receive from the organization.

Strategies

Arenas

Vehicles

Differentiation

Staging

Economic Logic

StagingSW is not a company which has emphasized growth as its major objective(a “go-slow” philosophy) and makes it a point to not enter markets unless it perceives favorable conditions(which range from wishes of the local community to the availability of an appropriate labor supply).

Strategies

Arenas

Vehicles

Differentiation

Staging

Economic Logic

Economic LogicSW airlines has always been categorized as a Low Fare/No Frills airline, while still providing its customers with a high level of convenience and service. Also, it widens its markets by attracting large number of patrons who relied on ground transportation and also targeting markets in which it had a clear competitive advantage, all of which led to the airlines having a return of over 21,000% compounded annually for the 20-year period between 1972 and 1992.

Strengths Point-to-point service strategy increases revenues Strong fleet base enhances ability to deliver effective

service Integration of AirTran's network and operations to

enhance growth prospects

Weakness

Heavy dependence on passenger revenues could increase risk

Lawsuits and litigations could adversely affect operating results

Dependent on single aircraft and engine supplier could impact the operations

Opportunities

• Network expansion initiatives to create a positive impact on topline performance

• Positive outlook for the global tourism industry Favourable outlook of global air freight market could

help to grow sales and profit

Threats

Intense competition could negatively impact margins Stringent government regulation could increase

operating costs Consolidation in the airline industry may impact

business performance

Thank You