Business Strategy Of Southwest Airlines Essay

Southwest Airlines Co., established in 1971 by Rollin King and Herb Kelleher, began its operations with only three Boeing 737 aircrafts. It is headquartered in Dallas, Texas(Hawkins, Misra, & Tang, 2012). Southwest is well known as one of the largest low-cost carriers. With this strategy, the company has dramatically grown up and deeply rooted in the US airline industry. Now, Southwest Airlines Co. operates 633 aircrafts to 93 domestic cities and the highest number of passengers used Southwest Airlines to fly around U.S in Jan 2014 (Hawkins, Misra, & Tang, 2012). To accomplish more than 40th consecutive years of both profitability and competitiveness, Southwest Airlines Company is constantly trying to find the routes to differentiate itself from other domestic carriers (Hawkins, Misra, & Tang, 2012).

The target demographic for Southwest is very broad. The fact the airline has a brand that appeals to price-conscious travelers who do not mind the airline’s no-frills philosophy means it attracts lots of small business owners, young adults, middle-class families, and those who are traveling a short distance. Southwest operates a simplified airline to keep costs down. It only operates one type of aircraft, and its no-frills plan includes no assigned seats or class seating, no meals, and no onboard movies. The company has a strong emphasis on customer service and a differentiation strategy to keep customers happy and loyal. When hiring for customer service positions within the organization, Southwest focuses on attitudes rather than skills and encourages peer hiring. This strategy helps the company identify those who fit the organizational culture and who are most likely to further the company’s philosophy of

Southwest Airlines' successful and profitable business model has been driven by several strategies: high aircraft utilization; standard fleet; charismatic leadership; low fare carrier; excellent customer service practice; attractive frequent flier program; innovative and creative marketing program; performance focused organizational culture; strategic human resources management and a lean operations.

Southwest Airlines (SWA) maintained a low-cost, low-price and no frills strategy. The small Texas carrier began as a concept, its business plan detailed on a cocktail napkin in 1971 and grew into the nation’s fourth largest airline. Known as an innovator with low operating costs, dominating smaller airports, with a humorous customer service, SWA saw its 40th profitable year in 2013. Like all companies, SWA underwent leadership changes in 2001, and said goodbye to the company’s founder in 2008. Unfortunately, the changes in leadership were not the only changes; the organization proceeded to alter their beliefs and activities.

Southwest Airlines was started 45 years ago in 1967 by two entrepreneurs: Herb Keller and Rollin King who had the right vision and culture by which to become successful entrepreneurial leaders. This vision was achieved as Southwest Airlines became the greatest airline in the USA. As a young business in the airlines industry, Southwest Airlines in the initial years confronted very tough situations, and it was due proper planning and with the assistance of its employees that kept Southwest Airlines afloat from sinking. There were already pioneer big companies well established in the airlines industry when Southwest Airlines joined the industry. Some of these companies had a good share of

This paper will give a historical overview of the company, discuss the ingredients to the company success, offer some financial strengths and present a final conclusion. Section I: Southwest's History Twenty-seven years ago, Rollin King, a San Antonio entrepreneur who owned a small commuter air service, and Kelleher, who was a lawyer at the time, got together and decided to start a different kind of airline. They began with one simple notion. If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make certain they have a good time doing it, people will fly your airline. And you know what? They were right. Within those 27 years, Southwest Airlines became the fifth largest major airline in America. Today, they have flown over 50 million passengers a year to 54 cities all over the southwest and beyond. They do it over 2,300 times a day with over 267 of the newest jets in the nation and fly only one type aircraft; the B-737. The average age of their fleet is only 8.4 years and they own over sixty percent of them. In May 1988, they were the first airline to win the coveted U.S. Department of Transportation Triple Crown for a month - Best On-time Record, Best Baggage Handling, and Fewest Customer Complaints. Since then, they've won it

If Southwest decided that they needed to increase their revenue they would have to start by raising the prices of their tickets. The need for increased revenue would need to be passed on to the consumers’. When a ticket price is higher with one airline than the other, the customer

According to Greyhound, it takes a total of sixty-five hours to drive from New York to Los Angeles by bus with no transfer (“Choose your outgoing trip,” 2016). The same trip with Southwest Airlines takes approximately eight hours (“Select Departing Fight,” 2016). In 1971 Southwest Airlines became an official airline company when they won a U.S Supreme Court ruling and purchased three Boeing 737 (Thomas, Peteraf, Gamble &Strickland, 2016, p. c-341). As of 2014 Southwest’s fleet has grown to an astonishing 665 aircraft that recorded 902 thousand flights in 2013 (Thomas, et al., 2016, p. c-341). By evaluating Southwest’s industry maturation, strategies, their success in the sector it will be possible to make recommendations for Southwest 's future growth.

History and mission of the organization Southwest Airlines Corporation, which was essentially established in 1971, has become one of the most well-known airlines to date. The cofounder, Herb Kelleher, had a simple motto to follow when he began the company: “If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline” (About Southwest, n.d., p. 1). This is a pretty simple concept, in that as a corporation you take care of your customers and employees and in turn you will have a higher morale within the organization. In addition, a higher customer gratification will be a result of Mr. Kelleher’s astute aphorism.

Southwest Airlines has a very clear competitive advantage of keeping their customers happy. The organization has a clear focus on the employees they employ and the customers they service. The organization has very clear corporate values, that help engage the staff to get excited about their positions and serving customers. Instead of using words like trust, integrity, and customer service; Southwest encourages their employees to have “A Warrior Spirit,” “A servant’s heart,” and “A Fun Loving Attitude.” (Makovsky) Southwest has put a significant amount of time and energy into promoting employees from within, based on these attributes.

Southwest Airlines was started over 38 years ago as a small Texas airline and has grown to become one of the largest airlines in the United States because it differentiates itself as the most successful low-fare, high frequency, point-to-point carrier. Since 1987 Southwest has consistently led the entire airline industry with the lowest ratio of complaints per passenger boarded. What does Southwest do differently that no one else in airlines does? It keeps things simple and consistent, which drives costs down, maximizes productive assets, and helps manage customer expectations.

This proposal addresses the needed steps to be taken in order for Southwest Airlines to see continued growth in the airline industry. Southwest Airlines has been able to remain one of the most profitable airlines in the industry for an extended period of time. Even with the hindrance of the 2001 terrorist attacks involving airplanes and the U.S recession of 2008, Southwest has continued to see strong revenue growth. Meanwhile, other companies were experiencing major losses and in some cases folding. Southwest Airlines has capitalized on the company’s strength of being the top low cost

Comparative services have been providing for decades that have brought Southwest closer to its customers. According to the Southwest case study (Strategic Management Text and Case, p.627), SWA offers strong fleet operation with “548 Boeing 737 craft providing service to 69 cities in 35 states throughout the U.S by the end of 2010”, and fly nonstop to 438 cities within the nation. Instead of spending money on hiring and training employees working on

Southwest Airlines faced many barriers to entry from the fierce competition of other airlines in the industry. Though competition was fierce, Southwest Airlines managed to succeed by doing things differently. Their mission was to provide affordable air travel to those who would not normally fly. Contradictory to the rest of the airline industry, Southwest maintained a profit while keeping its fares low. Southwest was unique to the industry in two ways. They focused on the short haul traveler and used a point-to-point method of flight connections.

Southwest Airlines Company (Southwest Airlines or ‘the Company’ SWA) is a passenger airline that provides scheduled passenger and freight transportation services. The Company primarily provides scheduled services throughout the US and near-international markets. It is headquartered in Dallas, Texas and employs 48,000 people and serves over one hundred million customers annually (“Southwest,” 2015). Southwest Airlines has accumulated over forty years of revenue and is one of the supremely flown airlines in the United States of America (Dess, et al, 2014, p. C137). Recognized for dominating the national or domestic airline market, Southwest Airlines’ diligence has built an