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Strategic management
Summary of southwest airlines
Southwest airlines introduction
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Southwest Airlines is one of the biggest United States airlines which prides itself in its low-cost strategy to attract and keep up more clients. On a given day, Southwest Airlines operates over 3,400 flights. It has a more than of 46,000 employees. To reduce maintenance and training costs, Southwest Airlines use only Boeing 737s. As of today the company operates 647 Boeing 737s, which fly to 93 destinations across the US. Southwest Airlines have been able to survive even when faced with stiff competition because of its low cost approach. However, this success has also been attributed to the high level of care and appreciation on its clients and employees.
Southwest Airlines is one of the best airlines in the United States. It is widely known
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Additionally, the mission statement draw the values of the airline, which are promoting the company spirit as well as individual pride among its employees. Finally, the mission statement portrays a very positive and attractive image of the airline’s dedication towards the providing of the best services to its …show more content…
For a company that highly values the input of its employees, training is a very fundamental part of its day to day activities. For the company to achieve its set goals and objectives, its employees must be thoroughly trained to deliver the high quality services as expected. Moreover, Southwest Airlines maintain close relations with their employees. The company believes that its mission and vision statements cannot be achieved if employees are not motivated towards achieving them. Therefore, training is an integral part of the company. On an average year, Southwest Airlines spends 1.2 million hours training its employees.
Southwest Airlines employees are its biggest strength. Their hiring process strictly ensures that only the best candidates are hired. Training is necessary to sharpen the skills of these employees. Its low cost approach is also a major strength as it attracts more clients. Staff members need to be trained to improve efficiency so that the company can remain profitable even after charg such low prices. Finally, Southwest Airline only purchases Boeing airplanes to keep the repair costs at minimum. This is also a significant strength (Gittell,
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 externally with every Southwest Customer.” (Southwest, 1988). The Airline has always believed that their corporate culture is one of the keys to their success. The culture recognizes that employees have emotional intelligence and that their attitudes and morale are key to the teamwork and creative environment.
Southwest airlines is one of the most widely respected companies among those profiled by Firms of Endearment. They are recognized for having one of the best corporate cultures, which is emphatically encouraged from the top down. Southwest’s model clearly exemplifies the concept of servant leadership, and we will elaborate on how this creates a firm of endearment.
Southwest Airlines is “America’s largest low-fare carrier” (Southwest, 2014). The Headquarters for Southwest Airlines reside in Dallas, Texas. Southwest Airlines was founded by Rollin King and Herb Kelleher and was originally planned to serve only a small three city area. “Southwest Airlines was incorporated in Texas and commenced Customer Service on June 18, 1971, with three Boeing 737 aircraft serving three Texas cities - Houston, Dallas, and San Antonio , and grew to become a major airline in 1989 when it exceeded the billion-dollar revenue mark (Southwest, 2014).
Another internal challenge for Southwest Airlines is the conflicting management style and business operation with AirTran. On top of that, the external challenges such as the increase of competitions and gas prices are some of issues f...
Despite its growing domestic network, the company didn’t offer international flights until July 2014, and even then, it only offered limited destinations (“Southwest Corporate Fact Sheet,” n.d.). Furthermore, the company’s reliance on a single aircraft is cause for concern. Southwest Airlines was also weak with technology utilization initially but has since turned this into an asset, as described later. Finally, the company has a limitation with providing customer perks due to its low-cost operations (Ross & Beath,
Southwest Airlines strategy of focusing on short haul passenger and providing rates as low as one third of their competitors, they have seen tremendous growth in the last decade. Market share for top city pairs on Southwest's schedule has reached 80% to 85%. Maintaining the largest fleet of 737's in the world and utilizing point-to-point versus the hub-and-spoke method of connection philosophy allowed Southwest to provide their service to more people at a lower cost. By putting the employee first, Southwest has found the key to success in the airline business. A happy worker is a more productive one as well as a better service provider. Southwest will continue to reserve their growth in the future by entering select markets only after careful market research.
Even though Southwest offers no-frills, there is still a high degree of customer satisfaction that continuously builds customer loyalty for the company. As mentioned, Southwest offers low prices on their airplane tickets. Also, Southwest is renowned in the airline industry for its short turnaround time on arrivals and departures. And since people's biggest concern nowadays is money and time, having low price airline tickets to cater their traveling needs in a shorter period of time will surely satisfy them. Moreover, aside from the low prices offered, what attracts to customers is Southwest’s way in dealing with them. The employees of the airline treat their customers well and really listen to their needs.
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.
Deregulation for 16 years (1978) has resulted in an icnrease of domestic carriers from 36 in 1978 to 100 in 1985.
They have formulated a business strategy by creating a mission and vision statement that encompasses the company’s purpose and aspirations. The reason for their unwavering success is based on the simplistic way they execute common values. After extensively reading their value statement, I’ve come to realize the company’s ambition thrives on motivating and taking care of their employees. Southwest’s values revolve around a warrior spirit, a servant’s heart, and a fun-loving attitude.
The low cost and no frills strategy is make travel affordable at low cost. The company only operates one type of aircraft which is Boeing 737 to help maintenance cost low. Southwest was the first airline to use E-ticketing in this way customer can reserve spot and buy ticket on their web and allow less expense in printing tickets. Medium measured airports which allowed them to produce better time performance and less fuel costs so plane do not have to wait in the line at the runway. The core value of the company of “LUV and fun” makes the company great place to work that gives customer with a great experience.
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.
Southwest Airlines Stock Analysis, a Good Investment Southwest overview Southwest Airlines (NYSE: LUV) by revenues, a premier carrier in the United States, ranked the nation’s leading domestic airline. Moreover, the firm focusses on low fares, high frequency, short-hauls, and point-to-point services. The pioneer successful budget airline offers, continually, the cheapest tickets, serves over 100 destinations, employed about 55,700 employees and operate a fleet of 706 Boeing airplanes. Based on positive investment convergence measures, this paper will prove LUV stock rating A-, a BUY. Industry outlook.
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.
While the company is extremely popular and profitable today, there are certain problems associated with the operations of the company. The airline industry was heavily affected by the Housing crash and the financial crisis of 2008-2009. Number of airline passengers felt below 800 million a year for the first time since 2005. Nevertheless, as the economy is recovering