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Southwest Airlines Co Strategic Planing
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7/21/2019 Southwest Airlines Co Strategic Planing
http://slidepdf.com/reader/full/southwest-airlines-co-strategic-planing 1/17
Southwest Airlines
7/21/2019 Southwest Airlines Co Strategic Planing
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“If you get your passengers totheir destinations when they
want to get there, on time, atthe lowest possible fares, and
make darn sure, they have agood time doing it, people willy your airline.”
Core
Strategy
7/21/2019 Southwest Airlines Co Strategic Planing
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Southwest Airlines Started as an intra-stateoperator in the state of e!as in "#$"
Short haul, high fre%uen&y, low &ost strategy, andpoint to point route system
In "##' southwest held '.' (arket Share)
Southwest make the e!pansion to be&ome ama*or &arrier
+owest operating &ost in the domesti& airlineindustry
+ow &ost philosophy survived, a severe pri&ewar
Company Overview
7/21/2019 Southwest Airlines Co Strategic Planing
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Cost Leadership Strategy
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OTHER
(ultiple typesof air&rafts areused
SOUTHWEST
Single type ofair&raft is usedthat is oeing$$
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OTHER SOUTHWEST
On an averagethere were six
cabin crews.
(a!imum three&abin &rew
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ther /ost +eadershipStrategy
0se se&ondary airports 1+ess&ongested2
perates in mid-si3ed &ities.+ow &ost pri&ing strategy
4o &omplementary meals
5igh utili3ation rate of eet ofair&raft.
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7/21/2019 Southwest Airlines Co Strategic Planing
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arget /ustomer
/onvenien&e, time-
oriented travelers.6ri&e sensitive leisuretravelers.
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“7apid 7ewards 6rograms” for
fre%uent yers.
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8rowth f South9est
Fleet Size Net Income ($ 000s)
Passenger carried / per employee Aircrat !tilization ("rs)
Source: 1994 Annual Report
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Strengths
Strong eet operations
:ominant market position in 4orth Ameri&a
<riendly Sta=
est low fare &arrier
+argest airlines in the world in terms of highestnumber of passengers per year
7e&ogni3ed as a great value and e!&ellent servi&es
<le!ible working hours even though >?) of employeesare unioni3ed
Strong brand image
5ighest daily domesti& departures than any other&ommer&ial 0.S. airline
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9eakness
:e&lining pro@ts and margins
5eavy dependen&e on passenger revenues
5eavy dependen&e on a single produ&er oeing
/onservative growth strategy +imited to &ities domesti&ally
perates its own booking servi&e
:oes not o=er segmentation 1business ights, @rst
&lass, et&.2
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pportunities
7e&overy of 0S Airline Industry
A&%uisition of Air ran 5oldings
7e&overy of 0S tourism
International B!pansion +onger ights are being introdu&ed
raveller traC& is e!pe&ted to grow by -.D) through?E"#.
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hreats
Intense &ompetition
7egulation restri&tions
6ri&e u&tuations in petroleum markets
5igh unemployment and ination keeps travellersfrom ying
Foint ventures &an negatively a=e&t brand image
B!posure to Shaky Ameri&an B&onomy
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What Should SouthWest Do ? Indu&t more and more &ost saving initiatives
/ontinue with the same highly sele&tive pro&ess for re&ruitment
In&rease operations by e!panding operations or through (GAs
<o&us on te&hnology whi&h helps in&reasing fuel eC&ien&y
4ot &ompensate safety for frugality
(aintain the same operating eC&ien&y
9ork on more and more reward initiatives
4ot let the people be over&on@dent of the su&&ess and keep
motivating them
(aintain the same &ulture and employee satisfa&tion
Heep &ustomer servi&e as their main motto