The domestic US airline industry has been intensely competitive since it was deregulated in 1978. In a regulated environment‚ most of the cost increases were passed along to consumers under a fixed rate-of-return based pricing scheme. This allowed labor unions to acquire a lot of power and workers at the major incumbent carriers were overpaid. After deregulation‚ the incumbent carriers felt the most pain‚ and the floodgates had opened for newer more nimble carriers with lower cost structures
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Strategy and Policy Case 2. Southwest Airlines. I- Strategic Profile and Case Analysis Purpose Southwest airlines were founded in 1971 by King and Herb Kellerher. They started with a low cost strategy in a risky market where profitability depends a lot on fuel prices and external factors‚ such as the willingness of consumers to pay ticket prices. They started growing a lot with various strategies that permitted them beat a lot of their competitors‚ but in order to stay in the market they
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Business Strategy – BAD 4013 – SUMMER 1999 Case Study Southwest Airlines I. Strategic Profile and Case Analysis Purpose The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth‚ friendliness‚ individual pride‚ and company spirit. Twenty-seven years ago‚ Rolling King‚ owner of floundering commuter airline‚ and Herb Kelleher‚ King’s lawyer‚ got together and decided to start a different kind of airline that would provide a short-haul
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Corporate Strategy 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
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Background: Southwest Airlines is the largest airline measured by number of passengers carried each year within the United States. It is also known as a ‘discount airline’ compared with its large rivals in the industry. Rollin King and Herb Kelleher founded Southwest Airlines on June 18‚ 1971. Its first flights were from Love Field in Dallas to Houston and San Antonio‚ short hops with no-frills service and a simple fare structure. The airline began with one simple strategy: “If you get your passengers
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Case Study: Distribution Strategy Distribution strategies exist in three forms: exclusive distribution‚ selective distribution‚ and intensive distribution. Kotler and Keller (2009) define each of the distribution strategies as: exclusive distribution limits the number of intermediaries used; selective distribution depends on a limited number of intermediaries; and intensive distribution works with as many outlets as feasible. The distribution strategy of the airlines industry was not a part of
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Distribution Strategy WS5A4 Southwest Airlines - Case Study Operating under an intensely competitive environment‚ Southwest Airlines carefully projects its image so customers can differentiate its product from its competitors. Southwest positions itself in all its marketing communications as the only low-fare‚ short-haul‚ high-frequency‚ point-to-point carrier in America that is fun to fly (Cheng‚ 2010). Its low-priced fares are a brand equity which it "owns" in the mathematical sense of being the
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Southwest Airlines: SWOT Analysis Mollika Thaing‚ Khoa Tran‚ Tonielia Thomas‚ Hiwot Tesfaye‚ Kai Spear Mgmt. Prin. & Org. Behavior Professor Leon Prieto 11/18/2013 Southwest Airlines’ Description Southwest Airlines was introduced in Texas on June 18‚ 1971 with three Boeing 737 airplanes and only serving three cities of Texas which included Houston‚ Dallas and San Antonio. The company came a long way since 1971; today Southwest Airlines has 537 Boeing 737 airplanes and serving 68
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SOUTHWEST AIRLINES CASE STUDY BY Aurelio Montelongo Jr. June 22‚ 2012 Southwest Airlines is in an environment whose conditions for most in this type of industry have been anything but profitable. So why is it that Southwest Airlines‚ who has been profitable in this volatile market been able to make money? Though Southwest did have a losing quarter it was not due to lack of fliers or its service to its customers‚ but an investment in its fuel hedging cost. As fuel dropped in price‚ Southwest
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Michele Lynn October 12‚ 2008 Marketing – Resnik Case Study: Southwest Airlines Air travel has its ups and down‚ as does basically any type of travel. However‚ Southwest Airlines has always been my favorite airline to fly. As a young single who loved traveling‚ I found their fares and schedules to be the most convenient for my taste. I always appreciated the staff’s sense of humor‚ and it really never bothered me where I sat‚ so I didn’t mind the “A‚ B‚ C” boarding groups as opposed to
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