Case Study
Answer (1):
Southwest had much lower cost than its competitors and was able to crush the competition with its low price strategy .
Answer (1) part 2
In the early 1970s, when Herb Kelleher and a partner sketched a business plan on a cocktail napkin, they had no idea that Southwest airlines would become the most successful U.S.Airline
Southwest’s strategy was the complete opposite of the industry’s conventional
Wisdom Its planes flew from point to point rather than using the major airlines hub and spoke pattern. This gave it more flexibility to move planes around based on demand
.Southwest did not serve the major airports dominated the major airlines preferring instead to serve second destinations where costs were lower. Southwest served no meals, only snacks. it did not charge passengers a fee to change same fare tickets. it had no assigned seats. it had no electronic entertainment ,relying on humorous flight attendants to entertain passengers. The airline did not offered its employees a profit sharing plan, thus keeping its fixed costs low. For that reason , pricing strategy has been so successful on that time.
Answer 2
Both business and leisure travelers seek for flexibility, convenience and a balance between good service and price when buying airline tickets. Southwest’s policy allowing customers to change flights without penalty appealed to customers. But what really made Southwest stand out to both customers were its frequent flights serving a ton of cities at convenient times and low prices. Though Southwest did not serve meals or provide electronic entertainment like other airlines, its pricing met the needs of its low-cost seeking target market better than other airlines.
Alternative answer for question 1
Southwest’s traditional pricing strategy has been the choice of buying cheap airplane tickets for just basic transportation services, without any extra service, such as meals. Even though there is many people that buy expensive
Southwest had much lower cost than its competitors and was able to crush the competition with its low price strategy .
Answer (1) part 2
In the early 1970s, when Herb Kelleher and a partner sketched a business plan on a cocktail napkin, they had no idea that Southwest airlines would become the most successful U.S.Airline
Southwest’s strategy was the complete opposite of the industry’s conventional
Wisdom Its planes flew from point to point rather than using the major airlines hub and spoke pattern. This gave it more flexibility to move planes around based on demand
.Southwest did not serve the major airports dominated the major airlines preferring instead to serve second destinations where costs were lower. Southwest served no meals, only snacks. it did not charge passengers a fee to change same fare tickets. it had no assigned seats. it had no electronic entertainment ,relying on humorous flight attendants to entertain passengers. The airline did not offered its employees a profit sharing plan, thus keeping its fixed costs low. For that reason , pricing strategy has been so successful on that time.
Answer 2
Both business and leisure travelers seek for flexibility, convenience and a balance between good service and price when buying airline tickets. Southwest’s policy allowing customers to change flights without penalty appealed to customers. But what really made Southwest stand out to both customers were its frequent flights serving a ton of cities at convenient times and low prices. Though Southwest did not serve meals or provide electronic entertainment like other airlines, its pricing met the needs of its low-cost seeking target market better than other airlines.
Alternative answer for question 1
Southwest’s traditional pricing strategy has been the choice of buying cheap airplane tickets for just basic transportation services, without any extra service, such as meals. Even though there is many people that buy expensive