Case Study: Southwest Airlines Company
Shravan
ComprehensiveCapstoneCaseStudy-SouthwestAirlinesCompanyLUV.pptxBy Group 4 - Team Plaster
Thi Minh Hao Khong
Raghuswaroop Kistipadu
Sarthak Kotecha
Shravan Kumar Poshala
Vignesh Senthamizhselvan
Ruchika Varma
Comprehensive Capstone Case Study- Southwest Airlines Company (LUV)
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Background
Southwest Airlines is the US's largest domestic carrier, serving over 100 destinations across the country. The carrier has been in operation since 1971 and just celebrated its 50th anniversary in 2020.
It was dreamt up by Rollin King and Herb Kelleher on a cocktail napkin in 1966, originally called as Air Southwest.
The company, headquartered in Dallas, Texas, offers low-cost, no-frills aviation transportation with frequent, primarily short-distance flights.
Southwest became one of the first airlines to launch a website on March 16, 1995.
Southwest is a publicly traded firm that trades on the New York Stock Exchange under the well-known ticker symbol "LUV”.
As of 2019, it employed 60,000 people and operated over 4,000 flights per day during peak travel seasons.
The firm has a fleet of 747 Boeing 737 planes that serve 103 locations in the United States and ten other countries.
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Bargaining power of Suppliers - High
Bargaining power of Buyers - High
Threat of substitute product or service - High
Threat of new entrants - Moderate
Porter’s Five Forces
Rivalry among existing competitors - High
Porter’s Five Forces Model
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The Firm
Some strengths of Southwest are its high brand value, loyal customer base, ranked #14 in Fortune’s list of world’s most admired company.
Southwest reported a net income of $68 million for Q4 2021 with a full year net income of $977 million.
Operating revenue in Q1 2022 went down 10-15% compared to 2019.
Launched service to 14 airports and received numerous awards and recognitions last year.
Firm’s major constraints and weaknesses
Limited presence in international market
Overdependence on Boeing 737s, losing revenue.
Southwest Airlines Co. has a U-form organizational structure and decision making is decentralized
Image obtained from https://southwest50.com/our-stories/our-heart-livery/
The Product
Southwest offers low-cost domestic airlines, other services include:
EarlyBird check-in
Business Select
Express Bag Drop
Gift Cards
Inairtainment
Strategies
Multichannel distribution
Cleaning planes without conflict
Principles of fun
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PESTLE Analysis
Airline industry is affected by the nation's unstable political condition
Recession and unstable economic conditions.
Impact of way of life, ethnicity, and demographic
Impact of modern innovation/technology and technical legislation
Legal complexities and laws to be followed
Impact of Environmental conditions and changes in the environment location and rules
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Southwest Airlines - SWOT Analysis
Internal
External
STRENGTHS
OPPORTUNITIES
WEAKNESS
THREATS
Point-to-Point service
Cost leadership
Mono aircraft policy
Low pricing for travellers
No international routes
Non usage of Hub system
Solely dependant on Boeing aircraft
No versatility in services
Expanding the market worldwide
Improvement in online ticketing service
New innovation/technology lead to new opportunity
Long distance Services
Worldwide economic recession
The issues of Boeing 737 max
Heavy competition
High and increasing fuel costs
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Problem Statement
The major issues with Southwest Airlines is engine failures and manufacturing supplier for the aircraft.
Engine Failure, Boeing 737 (2018) - Fan blade broke through a passenger window
NTSB issued 7 safety recommendations based on findings from the investigation.
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Strategic Plan
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Highest possible quality of service to the customers.
To become the global most famous, effective, and most-streamed airline.
Warrior spirit, servant's heart, and fun-loving personality.
Various sales promotion
Advertisement Campaign
ONLY Boeing 737 series
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STRATEGIES
IMPLEMENTATION
KEY PERFORMANCE INDICATORS
Focused on customer contentment,
Low-cost pricing
Motivation of the workforce
AirTran to maximize its profitability
Finance
Customer
Non-external business process, and
Learning and growth perspective
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Summary - Sharavan
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THANK YOU!
Any Questions?
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