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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Summary of Southwest Airlines: Does “LUV” Last?* First time in history‚ Southwest Airlines had its “LUV” for customers questioned. The Federal Aviation Administration (FAA) levied a record $10.2 million fine on Southwest Airlines. They accuse them after missing mandatory safety checks of flying 117 planes on nearly 60‚000 flights between June 18‚ 2006‚ and March 14‚ 2007. Both the FAA and Southwest testified. FAA officials were blamed for being “too close” to the airline and being
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As of Year 2004‚ the American Airline industry stood at around 783 Million USD/year in terms of operating revenue with American Airlines‚ United and Delta being the biggest players. Southwest was the 6th largest player in the market. Since 2001‚ the airline industry on the whole has been suffering he losses annually. The seat-miles flown have increased manifold over the long term (from 1989 to 2004) indicating increase in adoption of air travel among the population while the revenue per mile has
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MARKETING SPOTLIGHT- SOUTHWEST AIRLINES Southwest Airlines entered the airline industry in 1971 with little money‚ but lots of personality. Marketing itself as the LUV airline‚ the company featured a bright red heart as its first logo. In the 1970s‚ flight attendants in red-orange hot pants served Love Bites (peanuts) and Love Potions (drinks). With little money for advertising in the early days‚ Southwest relied on its outrageous antics to generate word-of-mouth advertising. Later ads showcased
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Situation Analysis Since day one‚ Southwest Airlines has been able to maintain a winning strategy. Starting with just three aircrafts in the state of Texas‚ Southwest implemented a low cost‚ low fare‚ no frills strategy that proved successful. As they have grown‚ more plans have been put into practice‚ such as a widely popular frequent flyer program and their now legendary customer service. These strategies have proved successful‚ as Southwest is the only airline to have maintained a profit in the
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1. What role has leadership played in the success of Southwest Airlines? In an era where all the major players in the U.S. airline industry experienced problems‚ only Southwest Airlines remained profitable throughout that period. This amazing and continued success is attributed to its great leader Herb Kelleher. He has been a very successful leader who knows the employees and marketplace well and can effectively take action for the success of the organization. He applies flexibly to the growth
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BUS 330 Writing Assignment The paper is about how the airline company named as the Southwest Airlines has been able to cater to the needs of the customers while still holding a greater market share in the Airline industry specifically during the economic crises phase. Q1: As a high – contact service provider‚ how does Southwest Airlines ensure that its employees satisfy the customer? As far as the employee training is concerned‚ the employees are extensively trained so as such
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strategies to adapt to these changes. The overall environment of the Airlines Industry in the USA as found in this case‚ could be described as that of bitter rivalry. The hostility between competitors were so harsh that two rivals -Texas International and Braniff joined hands to destroy Southwest Airlines even before it could begin its operation. Failed to stop its operation‚ the rivals began to put up obstacles at every step Southwest took. No wonder‚ they were dubbed as "predator" meaning an animal
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Southwest and Continental Airlines: A Managerial Economic Perspective Introduction In order for companies to maximize profits and productivity‚ it is important that they implement managerial economics on both a day-to-day and strategic basis. This paper will compare and contrast Southwest and Continental Airlines from a managerial economic perspective. The goal of the paper is to critically analyze both companies on their use of managerial economic practices. The Airline industry is a capitally
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Southwest started its service in 1971. It becomes famous by using its pricing strategy of cheap fares backed by seriously controlling costs. The central business of Southwest is the short-haul domestic route. The airplanes of Southwest are always on time which make the customers very delighted. Southwest Airlines¡¯ used market penetration pricing strategy with low-fare‚ no frills‚ low cost service on relatively short flights. Moreover‚ it also provides benefits to customers such as simple scheduling
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