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Southwest airlines a strategic perspective
Southwest airlines a strategic perspective
Southwest airlines a strategic perspective
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Study of Southwest Airlines
1. What three things impress you most about this company?
One thing that really impressed me about Southwest was their ability
to maintain high profits and maintain a high customer base even after
the September 11 attacks and 2002 recession. Another impressive
attribute is the fact that they can keep their prices very low and
affordable to customers. The last thing that really impressed me
about Southwest Airlines was their management system. Their motto
that employees are equal to upper management seemed to me a risky
approach, but for Southwest it was a very brilliant and profitable
idea.
2. Do a SWOT analysis. (See Exhibit 1 for analysis)
STRENGTH
* Major profitable airline company since September 11, terror attack
* Lower prices than competitors
* Friendly service
* Short air travel between two cities
* Upside-down pyramid management system
* Plenty of daily flights
* Entertainment for passengers
WEAKNESS
* Only flies to 29 states
* Cannot compete with larger airline companies
* Does not utilize a hub system
* No first class seating
* Smaller seats compared to larger airline companies
* Only uses Boeing 737 Airlines
OPPORTUNITES
* Slash Prices even more to eliminate competitors
* Add first class compartment
* Expansion into new geographic region
* Add flights in areas where rivals were cutting back service
* Expand airline fleet to fly longer distances
* Add longer, non-stop flights
THREATS
* New entrants
* Increased rivalry
* FAA rules and regulations
* Government Regulation
* Land-based travel such as Amtrak and Greyhound
* Other airline companies duplicating Southwest Airlines? strategy
3. What grade would you give Southwest management for the job it has
done in crafting the company?s strategy?
I would give Southwest management an A grade, for the reason that
Southwest Airlines is described as an upside-down pyramid. The upper
management is at the bottom and supports the front line employees, who
are the experts. This is Herb Kelleher's unorthodox leadership style,
in which management decisions are made by everyone in the
organization, not just the head executives. The company is described
as not having much of an emphasis on structure; instead, employees are
encouraged to think freely without constrai...
... middle of paper ...
...mselves and stress the quality of these frills (such as roomier
seats). Others, through use of flight hubs, are the only ones who can
economically serve remote customers.
Another weakness of Southwest Airlines is its preference for Boeing
737s. Being limited to one type of airplane leaves them with little
flexibility when the model receives a bad reputation or a critical
flaw is discovered. Such would be a costly venture for this company,
who has used only one type of airplane, and in the face of a dire
situation would face a costly venture of finding replacements or
counteracting bad publicity.
A possible threat is that since Southwest Airlines' strategy has
proven so effective, it will be duplicated by its competitors to a
point where it would lose originality. This could result in
competitors offering low rates to the areas covered by Southwest and
beyond, making Southwest Airlines' range and limitations more obvious.
It would be very possible in the near future where a big company, with
its hubs (something Southwest does NOT have), would basically
introduce Southwest Airlines' low-cost model to a wider market,
encroaching and outdoing Southwest Airlines.
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More than 37 years ago, Rollin King and Herb Kelleher 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 darn sure they have a good time doing it, people will fly your airline. And you know what? They were right. What began as a small Texas airline has grown to become one of the largest airlines in America. Today, Southwest Airlines flies over 104 million passengers a year to 64 great cities all across the country, and we do it more than 3,400 times a day.
For years, Southwest Airlines has been experiencing stable costs, low fares and traffic stimulation. However, the latest changes in the marketplace (See Exhibit 1: SWOT Analysis), including the higher energy costs and the entrance of new low fare/cost carriers are threatening the future of the airline. As a result, LUV needs to decide whether or not to acquire the slots and gates from the bankrupt ATA Airlines at LaGuardia (LGA) terminal in New York City (NYC) in order to expand its capabilities.
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Southwest Airlines is one of the most successful airlines in the United States. There has never been layoffs or strikes in the history of the company, although there were several times when layoffs could have been justified, including the months following the September 11, 2001 terrorist attacks. However, Southwest's Mission statement says “Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer.” (Southwest, 1988). The Airline has always believed that their corporate culture is one of the keys to their success. The culture recognizes that employees have emotional intelligence and that their attitudes and morale are key to the teamwork and creative environment.
Kysilko, David. “The Handwriting Debate." NASBE. National Association of State Boards of Education, Sept. 2012. Web. 16 Dec. 2013.
The 2000s/ 2010s brought in a wave of movie musicals- adapted from the stage shows. These brought new audiences into the theatre world, and for the first time in 20 years, brought a love to some of the timeless musicals. With slightly altered songs to appeal to a newer audience, these films brought in much needed money into the industry, with films including: Les Misérables, Phantom of the Opera, Rent, Hairspray, Mamma Mia, Fame- and many more. Together with this, musicals began to push the concept of the songs in them, with a wave of new styles being written. Rap musicals such as ‘Hamilton’ and ‘In The Heights’, Pop musicals including ‘Waitress’ and ‘Dear Evan Hansen’ and Rock musicals of ‘American Idiot’ and ‘Spring Awakening’. Together they pushed boundaries of a ‘traditional’ musical theatre sound, and brought in something never before seen. Due to the influence of ‘Rent’, controversial issues and themes began to be explored more, such as Teen suicide, Murder, Ethnic barriers and everything else, which brought with them, a world of opportunities. It was clear that musical theatre was once again showing for a promising
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