Southwest Airlines Case Study

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1. According to the authors of the case study, some of the market conditions of the U.S. airline industry in the early 1990s were triggered by the Airline Deregulation Act of
1978. In essence, “deregulation created greater competition and growth opportunities… laws restricting the airline industry loosened in the spirit of greater competition.” (Marketing Management, page 15). The impact of deregulation became evident in several areas: Removing regulatory price controls was followed by lower average prices, a substantial increase in price variation, and efforts to soften price competition through differentiation and increases in brand loyalty. Therefore, one can surmise that the marketing-mix or the four Ps of marketing (product, price,
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The Triple Crown consists of being the best in on time performance, baggage handling and customer satisfaction. This is an amazing feat considering “no other airline had ever won the ‘triple crown’ for even a single month.” (Southwest Airlines Case Study, page 473) Again, Southwest has been able to match or exceed customer expectations on all of these facets.

Within any industry, companies seek to gain a competitive advantage that allows them to outperform competition and achieve strong profitability. In this regard, the company utilizes a younger fleet of Boeing 737 planes (average age of 7.6 years), which means less maintenance problems, fewer delays and higher customer service. In addition, the case pointed out that Southwest relies on direct ticket booking, cutting out the travel agent, therefore saving cost. Moreover, being a “low-fare, low-frill” carrier also meant not having full food service on their flights, leading to a faster turnaround time (15-20 minute turnaround compared to industry average of 55 minutes) and no assigned seats to load the plane faster. Lastly, Southwest didn’t fly into major hub airports, which translated to lower gate costs and less congestion. (Southwest Airlines Case Study, page 474)

Michael Porter’s Generic Strategies (Marketing Management, page 54) will help paint a picture of the passenger airline industry and Southwest’s

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