522 Marketing Southwest Airlines case analysis 1. In what ways might airline customers be segmented? Airline customers might be segmented when groups with varying needs and wants are recognized. They can be segmented on a number of different types of things; such as age‚ gender‚ location‚ buying behavior‚ and demographics. a. Which segments or niches would you consider Southwest’s prime targets? Southwest’s prime targets would be that of business and leisure travelers. Business travelers are
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Southwest Airlines’ Corporate Strategy & Control System Southwest Airlines became one of the most admired airlines in the world based on their dedication to their customers and the corporate strategies their leadership instituted. Their leadership created a different corporate culture that CEO Herb Kelleher and his company are devoted to the philosophy of putting employees first (Govindarajan‚ pg. 115). In doing so‚ Southwest was able to instill a management control system that relied on
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Situation Following the Deregulation in 1978‚ a competitive price war ensued among the airline industry as a direct result of the new freedom for airlines to set their own fares as well as route entry and exits. This gave rise to the operating structure of the airlines as it exists today‚ consisting of the point-to-point system and the hub and spoke system. With this came the change of focus for major airlines to non-stop‚ cross-country routes in densely populated cities‚ which‚ in a regulated environment
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Southwest Airlines Southwest Airlines has long been one of the stand-out performers in the U.S. airline industry. It is famous for its low fares which are often some 30% lower than those of its major rivals. These are balanced by an even lower course structure‚ enabling it to record superior profitability even in bad years such as 2002‚ when the industry faced slumping demand in the wake of the September 11 terrorist attacks. Indeed‚ from 2001 to 2005‚ quite possibly the worst 4 years in the
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Southwest Airlines 2008 Introduction : While the airline industry in the USA has not made thriving financial headlines‚ Southwest Airlines has emerged as a successful organization. It has been able to make profit consistently and has sustained itself through difficult situations like recession‚ energy crisis‚ and September 11 terrorist attacks. Problem Statement : The problem under consideration here is: How can Southwest Airlines achieve a sustainable growth in future in spite of increasing
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Rewards at Southwest Airlines Case Study Southwest Airlines prided themselves on their commitment to customer service and equality by offering a streamlined business model with an emphasis on simplicity and efficiency that has remained the same for the most part since the airlines’ inception in 1967. At the time of the case study‚ Southwest had been profitable for the past 28 years‚ an achievement many airlines are incapable of boasting due to the volatility of the airline industry. One
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save fuel‚ and reduce engine maintenance costs and takeoff noise. - Fuel cost saving. Southwest effectively takes advantage of fuel hedging to buy fuel at lower prices. And to cut fuel cost Southwest also takes some other actions such as carrying less water for bathroom‚ and replacing passenger seats with lighter models. - Equipment and technology application and outstanding automation processes. Southwest has invested significant sums in facilities‚ equipment‚ and technology to efficiently process
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1) How does this company make money even when other airlines don’t? What are the most important contributors to its financial success? ANS: - Southwest airlines founded specially to create intrastate between Dallas and Texas and their main agenda is to provide services at low cost as compared to other airlines. Even it’s very competitive to achieve this goal but southwest succeeded by keeping operations simple and consistent‚ cost saving strategy and meet customer expectation(on-time) at low cost
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At the onset of the airline industry in the United States‚ major network airlines were the sole providers of air travel. This multifaceted industry was a difficult industry to break into as a consequence of “sophisticated customer segmentation‚ hub-and spoke models and costly information systems for reservations‚ fare wars and intense competition” (Thompson 2008). Shrinkage in airline ticket prices augmented the demand for airline travel. Many markets were simply deserted or over-looked by major
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Southwest History 1966: Rollin King marched into Herb Kelleher’s law office with a plan to start a low-cost/low-fare airline that would shuttle passengers between San Antonio‚ Dallas‚ and Houston. Thought of this idea because businessmen were complaining about the commute. 1967: Kelleher filed papers to incorporate the new airline and submitted an application to the Texas Aeronautics Commission for the new company to serve Dallas‚ Houston‚ and San Antonio. ------4 year legal and regulatory
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