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The Case of Southwest
HULT
The Reason for Southwest Airline’s Success
Southwest success could be attributed to an efficient use of their asset, the cheapest
service, and reliable service for customers. For this, Southwest should maximize aircraft
operational excellence and differentiated themselves from other competitors through an
effective marketing. I try to explain more about this from now on. The key factor on success of Southwest was their low-cost model. Firstly, Southwest
used one type of air plane, the Boeing 737 series. This resulted in all kinds of cost-saving:
maintenance cost, training cost for their mechanics and pilots. It also gave Southwest
flexibility to move their aircrafts throughout the route network without reconfigurations.
Secondly, Southwest improved profitability by minimizing turnaround time and kept low
fares by selecting spider-web system that enable point-to-point flying, instead of hub-and-
spoke system that needed more geographic coverage. Lastly, Southwest’s no-frills policy and
contracting for some of their work was helpful for keeping low fare and providing their own
value for customers. It was “frequent, reliable, on-time flights, and very low prices”
(Goldstein, Rungtusanatham, Schroeder, 2011, p. 439).
In the marketing side, Southwest did a differentiated and effective marketing. They
positioned them themselves in fun image, the concept of LUV, and this “served to reinforce
Southwest’s lively image among its employees and encouraged them to pass it on to
passengers” (Goldstein et al., 2011, p. 440). Southwest’s the lowest prices offering appealed
to many people who were not interested in additional in-flight services or wanted to avoid
busy airports. Southwest thoroughly put a price from a profit perspective at the same time,
not a just cheap price; they fully considered all kinds of cost and then found a solution to
meet the twin goals of offering low fare to customers and securing profitability to company.
Southwest’s success was due to their focused group
ㅡ
defining target customers and
searching new market. Southwest used an effective promotion policy that could entice their
target customers, regular business commuters, such as sweetheart stamp. When Southwest
decided to enter new market, they chose “only the ones that fit their business model”
(Goldstein et al., 2011, p. 441). In corporate culture, familial atmosphere and collaborative management-union
relationship resulted in a high sense of unity and strong trust in the company. This was
driving force of high morale and low employee turnover.
The 10 to 15 Minutes Turnaround Time of Southwest Airlines
Southwest turned their airplanes round 10 to 15 minutes from the time it arrives at
the gate until it leaves. This minimized the time that airplanes sat on the ground and this
quick turnaround allowed their airplanes to be in the air more.
This quick turns enabled Southwest to increase fright per airplane. Southwest
airplanes were able to be in the air for more time each day than a similarly sized competitor.
Southwest’s airplanes were in the air for 12 hours per day, whereas industry average was 8
hours per day. As a result, this meant growth of productivity of finite resources compare to
their competitors and this must also lead to revenue increase.
Challenges Facing Southwest and Response
The competition in low-fare market is getting fierce. Many low-fare carriers such as
JetBlue, AirTran Airways, and Frontier Airlines appeared. These competitors copied and
improved upon Southwest’s model. Unlike Southwest, new competitors offered more
amenities such as luxurious leather seat and in-seat audio video entertainment, they also used
“leading-edge technology to streamline operations” (Goldstein et al., 2011, p. 445). For
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Marketing and Distribution of Mushroom Sachin and Virag are two enterprising youth. They have passed out from IIM, Bangalore.
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generating business whose boilers were used in one of the first central power plants
ever built (in Philadelphia in 1881). Babcock & Wilcox had an impressive $648 million
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been slowed by a number of factors, including technological difficulties and public
resistance. But a specific and unexpected cause for delay has been one company's
crucial failure to deliver a single vital component of nuclear power plants. The failure,
basically, was a management failure and on a scale that would be cause for concern
even in a fly-by-night newcomer to the nuclear industry. The company, however, was
no newcomer. It was proud old Babcock & Wilcox Co., a pioneer of the steam
generating business whose boilers were used in one of the first central power plants
ever built (in Philadelphia in 1881). Babcock & Wilcox had an impressive $648 million
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BUILDING PRESURE VESSELS FOR ATOMIC REACTORS. THE WHOLE ELECTRIC-POWER
INDUSTRY FELT THE CONSEQUENCES.
The long awaited transition of the US electric-power industry into the nuclear age has
been slowed by a number of factors, including technological difficulties and public
resistance. But a specific and unexpected cause for delay has been one company's
crucial failure to deliver a single vital component of nuclear power plants. The failure,
basically, was a management failure and on a scale that would be cause for concern
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no newcomer. It was proud old Babcock & Wilcox Co., a pioneer of the steam
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EVERYTHING WENT WRONG WHEN THE VENERABLE BOILERMAKERS TURNED TO
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INDUSTRY FELT THE CONSEQUENCES.
The long awaited transition of the US electric-power industry into the nuclear age has
been slowed by a number of factors, including technological difficulties and public
resistance. But a specific and unexpected cause for delay has been one company's
crucial failure to deliver a single vital component of nuclear power plants. The failure,
basically, was a management failure and on a scale that would be cause for concern
even in a fly-by-night newcomer to the nuclear industry. The company, however, was
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generating business whose boilers were used in one of the first central power plants
ever built (in Philadelphia in 1881). Babcock & Wilcox had an impressive $648 million
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INDUSTRY FELT THE CONSEQUENCES.
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been slowed by a number of factors, including technological difficulties and public
resistance. But a specific and unexpected cause for delay has been one company's
crucial failure to deliver a single vital component of nuclear power plants. The failure,
basically, was a management failure and on a scale that would be cause for concern
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