The airlines industry has historically been one of the most unprofitable industries. The reason can be explained when incorporating Michael Porter’s famous Five Forces Model. The threat of competition is Southwest Airlines Co. (NYSE: LUV) is an American low-cost airline based in Dallas‚ Texas‚ with its largest focus city at Las Vegas ’ McCarran International Airport. It is the largest airline in the United States by number of passengers carried domestically per year and (as of December 31‚ 2007)
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Case study: Southwest Airlines 1. Southwest Airlines has been a highly successful undertaking. This is due in part to the marketing objectives it has set for itself. Its main objective was to create brand awareness/preference‚ customer value and be a market share leader. The next step was to come up with a marketing mix strategy of price‚ place‚ product and promotion to achieve its objective. Southwest cut out many amenities in order to differentiate itself from its competitors. Its main objectives
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Southwest Airlines: A Corporate Cultural Assessment University of X September 17‚ 2005 Southwest Airlines: A Corporate Cultural Assessment Southwest Airlines (Southwest) is a domestic US airline that provides short haul‚ high frequency‚ point-to-point‚ and low-fare service to and from 60 airports in 59 cities across 31 US states. From humble beginnings in 1971‚ this airline with only four passengers per flight‚ and airhostesses wearing hot pants and white go-go boots‚ has evolved into a leader
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Southwest Airlines 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
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Southwest Airlines Case Analysis 1. How does Southwest Airlines increase the customer’s willingness to buy (customer value)? Southwest airline creates customer value by providing an all around pleasant travel experience for its customers. Its ground and flight crew are extremely accommodating and flights are safe and on time. The fares are inexpensive compared to other hub and spoke airlines‚ which are attractive to business travelers during weak economies as well as to other travelers
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Southwest Airlines Fuel Hedging and Relations to Profitability Abstract In order to stay airborne‚ a passenger airline has to consistently generate profits. Profits come only from paying passengers‚ hence all stratagems must be customer oriented. In a scenario where there are many airlines competing with each other‚ one way of attracting passengers is to keep the cost of flying low‚ while providing value for money. On the other hand‚ expenses must tightly controlled to reach and stay at the
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Southwest Airlines Co. – 2007 Case Analysis On the brink of airlines’ market share battlefield‚ many of the companies failed to launch new strategies and price controls because of fuel prices‚ market requirements and safety issues. Along with the history of low price policy that Southwest Airlines started to implement decades ago‚ the recent challenges and soaring competitive behaviors made that company pass huge obstacles. Southwest Airlines manifested the new growth in Texas air carrier businesses
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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
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Executive Summary The strategy of Southwest Airlines (SWA) has remained the same‚ which is to give customers low-cost‚ point-to-point airfare‚ with excellent customer service. This simple strategy has resulted in SWA posting profits for 30 consecutive years. While other airlines are downsizing‚ SWA is showing slow steady growth. This performance is evident throughout their SEC Filings. First we will look at SWA’s ROI and ROE compared to the rest of the industry. Two thousand and one and 2002 were
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Southwest Airlines corporate philosophy can be credited to one of the founders Herb Kelleher. It is an airline company with a unique culture “goofiness”‚ which keeps the morale of its employees high (Smith‚ 2004)‚ and is a company that welcomes fun‚ dedication‚ and effort. Southwest believes that a happy employee will create a happy customer‚ and will create loyal customers. Mr. Kelleher effectively implemented its style‚ culture and emphasis on quality in the daily actives at Southwest (Smith
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