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Case Study for Southwest Airlines
Case Study for Southwest Airlines
Case Study for Southwest Airlines
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1. Southwest Airlines is an Equal Opportunity Employer, therefore, has diversity in their employees from all over the world. They have employees from different cultures and experiences. Southwest Airlines invites military personell, active and retired veterans to apply. They also offer positions to qualified disabled individuals and disabled veterans. According to Forbes, “The icing on the cake is an elaborate recognition program for all employees who are recognized by customers. They are lauded in newsletter features, on the intranet, by the CEO in videos that are played at staff meetings, and dinners honoring them. Voluntary turnover is only two percent, and many of Southwest’s original employees are still there. The company receives 43,000 commendations a year, from both inside and outside the company.”
By end of 1990, They employed 8,486 FT employees and 134 PT employees. By February 2014, they had 44,430 FT employees and 1,321 PT employees.
45% - Ground, Customer Service and Fleet employees
43% - Flight employees
7% - Maintenance employees
5% - Management, Accounting, Marketing and Clerical employees
2. SWA is known for their “low fares” advertisement on tv, ads on the internet and through direct marketing, such as email. SWA does not have interline fares or contract with other airlines or use of commuter feeder relationships. Ads that are marketed, encourage individuals to go online to their website to get a lower fare. Their frequent flyer program is based on “number of trips taken” versus how many miles they have flown and other airlines have copied this program. SWA promotes casual but professional work environment to give customers a ‘home’ feel.
3. By keeping costs down:
1) Not assigning seats. They are able to tur...
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Home - 2011 Southwest Airlines One Report. (n.d.). Retrieved April 19, 2014, from http://www.southwestonereport.com/2011/#!/people/employees/index
How Social Media is Elevating Airline Crisis Communication « Social Fresh. (n.d.). Retrieved May 11, 2014, from http://socialfresh.com/how-social-media-is-elevating-airline-crisis-communication/
Southwest Airlines in Hot Water Over Seaworld Blackfish Controversy. (n.d.). Retrieved May 5, 10, from http://www.triplepundit.com/2014/01/southwest-airlines-hot-water-blackfish-controversy/
Southwest to offer captioning on wireless IFE | Runway GirlRunway Girl. (n.d.). Retrieved May 5, 2014, from http://www.runwaygirlnetwork.com/2013/11/21/southwest-to-offer-captioning-on-wireless-ife/
Southwest Airlines Marketing Strategies. (2008). Retrieved May 5, 2014, from http://www.yousigma.com
For example, all employees constantly communicate from baggage handlers to mechanics. Not only does this practice inculcate a sense of community among employees with vastly different skill sets and job requirements, it expedites turnaround time to get more planes from the gate and into the air (http://www.businessinsider.com/southwest-airlines-puts-employees-first-2015-7). Southwest also heartily encourages feedback through multiple channels, and has received many accolades for its recognition awards system, which allows passengers to identify by name specific employees who exemplify the Warrior Spirit. With a focus on the positive, employees can feel connected to the broader community, a clear example of servant
“Our people are our single greatest strength and most enduring long-term competitive advantage,” reports CEO Gary Kelly on the Southwest Airline website (https://www.southwest.com/html/about-southwest). The company works hard to hire great individuals and then rewards and supports them to make satisfied, productive employees (Ross & Beath, 2007). In fact, Southwest Airlines has received repeated recognition as a great place to work (“Southwest Corporate Fact Sheet,” n.d.). As a result, Southwest Airlines is able to provide a low-cost, fun-cultured experience with excellent customer service (Ross & Beath, 2007). This has allowed the company to build its final strength in this evaluation: a strong brand
If the short haul passenger was the backbone of Southwest Airlines success, then their 737s were the lifelines that supported it. By choosing the 737 as the airplane for all of Southwest's flights, the company saved time and resources in training its employees. The crew could be easily substituted for one another due to the extensive training on the 737. Low costs and, therefore, low fares are an enormous competitive advantage, when combined with their high-quality and loyal workforce. A very unique culture was found at Southwest Airlines among all of its employees.
Southwest Airlines is also well-known for having a very productive and loyal workforce. Such loyalty and productivity among the employees were brought by the way Southwest’s management treats them. As they say, the employees are willing to work hard for the company because they feel appreciated by the top management. Southwest maintains good employee relations because what they believe in is that if employees are happy, satisfied, dedicated, and energetic, they'll take real good care of the customers.
Since 1987, when the Department of Transportation began tracking Customer Satisfaction statistics, Southwest has consistently led the entire airline industry with the lowest ratio of complaints per passengers boarded. Many airlines have tried to copy Southwest’s business model, and the Culture of Southwest is admired and emulated by corporations and organizations in all walks of life. Always the innovator, Southwest pioneered Senior Fares, a same-day air freight delivery service, and Ticketless Travel. Southwest led the way with the first airline web page—southwest.com, DING, the first-ever direct link to Customer’s computer desktops that delivers live updates on the hottest deals, and the first airline corporate blog, Nuts About Southwest. Our Share the Spirit community programs make Southwest the hometown airline of every city we serve.
The marketing approach of Southwest Airlines is built upon their strong business model. They have successfully managed to target two specific market segments of the airline industry while remaining profitable. Their strategy is simple, to offer frequent non-stop flights with the lowest costs which appeal to both the business and budget travelers. By segmenting their target audience to specific demographics and ticket pricing, passengers know exactly what they are getting for the price they pay.
Southwest's philosophy of "Service for Smiles and Profits" encourages employees to treat customer service as the most important aspect of their job. It appears that when employees strive for this high level of service, the rest takes care of itself and success is inevitable (Amanor-Boadu, 2007). Southwest Airline's management structure is designed to carefully direct the activities of employees while still maintaining the spirit of "fun" that is the cornerstone of the airlines' customer service success (Lancaster, 1999). The fundamental concept of management at Southwest is the notion of a "loose-tight" design. Within the context of tight rules of conduct, employees are encouraged to take a wide degree of leeway. For example, the company encourages employees to make their own customer service decisions. Employees are encouraged to try new things, knowing that they will not be punished for innovation as long as they do not violate safety standards, endanger crew or passengers, or keep a plane from taking off or landing on time; this allowed not only to increase the speed of service but it allowed to increase the quality of it too.
Advertising: As one of the largest domestic airlines, Southwest Airlines has an enormous advertising budget to sustain its presence and increase its market share through focusing on the benefits of flying Southwest over its competitors. Southwest recognizes that flying is no longer a pleasurable experience for many customers, even on Southwest, historically a budget airline. Even though Southwest is often regarded as a no-frills airline, it still attempts to build goodwill from its customers based on its advertising. Of the $249 million it spent on advertising in 2011, Southwest Airlines is unique in that it does not sell additional ad space on the exterior of its aircraft. Many domestic airlines have begun selling aircraft exterior space as a way to increase revenue, but Southwest Airlines insists that it wants to keep its product and advertisi...
Southwest has done what others in its industry seem to struggle to do, which is to make flying fun. This has been the cornerstone for how the Southwest operates, thinks, and plans. Many of the policies, procedures, and practices Southwest has used are aimed directly at providing patrons with a unique, fun, and enjoyable experience. This value and the effort Southwest has made to place customers at the forefront of its plans and strategy, has paid off as the company is one of the most popular and well-respected in the transportation industry.
Southwest Airlines provides a Career Development Group that helps employees focus on personal and career growth. This is accomplished by working on a component that aligns the employee’s personal development needs and strengths so they can grow more. It also encompasses a skills assessment that’s structured toward helping employees align their degree to a specific job within the company. As stated before, Southwest’s purpose is to encourage employee fulfillment and by their Career Development services help them become more fulfilled in their jobs. According to their philosophy, Southwest Airlines hires for attitude and trains for skills.
There are few things that are impressive about Southwest Airlines first one is how they treat the employees. For Southwest Airlines employees are first and customers are second. If the employees are treated well that will bring in happy customers. Next is that Southwest is not only with their low prices but is able to create a competitive advantage by offering a fun and humorous experience when flying. Finally another impressive fact is when Herb Kelleher’s retire from CEO position yet remained a Southwest employee till July 2014. Even after the retirement he was still active with the Southwest Airlines that reflected his enthusiasm and dedication for the
For years, Southwest Airlines has been experiencing stable costs, low fares and traffic stimulation. However, the latest changes in the marketplace (See Exhibit 1: SWOT Analysis), including the higher energy costs and the entrance of new low fare/cost carriers are threatening the future of the airline. As a result, LUV needs to decide whether or not to acquire the slots and gates from the bankrupt ATA Airlines at LaGuardia (LGA) terminal in New York City (NYC) in order to expand its capabilities.
It all started in 1971, when Rolling King and Herb Kelleher decided to challenge the existing rut of charging high prices for air travels. They considered the railways and roadways their competitors and decided to offer cheaper travel for smaller routes. The company was incorporated in 1967, apart from initial entry troubles, Southwest has been the only US airline to have earned profits since 1973. The eccentric company’s outlandish way of conducting themselves has been the sole reason for Southwest Airlines to succeed in a highly competitive and packed industry.
The mission of Southwest Airlines is a dedication to the highest quality of service delivered with warmth, friendliness, individual pride, and company spirit (Mission…, 2007). The company also provides opportunities for learning and personal growth to each employee. Creativity and innovation is very important and highly encouraged, for the purposes of improving effectiveness. Employees are to be provided the same concern, respect, and caring attitude within the organization that the employees are expected to share with the customer. Southwest Airlines was initially created to be a low-cost alternative to high price of intra-Texas air carriers (Freiberg, 1996). Southwest’s fares were originally supposed to compete with car and bus transportation. It was a little airline, and it would withstand the test of time. As a discount, no-frills airline, it would provide stiff competition for larger airlines. Their strategy was to operate at low cost, offering no food, no movies, no first class, and no reserved seats. They created their own market and provided increased turnaround times at the gate, by avoiding hub-and-spoke airports and opting for short-haul, direct flights. Through this market approach, Southwest has a majority of market share in the markets they serve.
2015) however, as we have discussed earlier in this class, employee satisfaction can mean a variety of things to different people. From an employer perspective, Southwest makes it clear that their vision of a satisfied employee is a worker who is energetic, engaged, passionate and feels that “their job is a calling, rather than just a job” (Weber). In fact, Southwest representatives have stated that they hire based largely on a candidate’s general attitude and enthusiasm, and then train these people for the skills that they will need to perform their everyday duties. Southwest places a large emphasis on employee satisfaction in their company and focuses on this by involving employees, making them feel engaged in the workings of the company among other things. The company also has a generous compensation plan including health, life insurance and retirement benefits, to name a few.