Southwest Airlines : Strategic Planning

Business Strategy – BAD 4013 – SUMMER 1999 Case Study Southwest Airlines I. Strategic Profile and Case Analysis Purpose The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit. Twenty-seven years ago, Rolling King, owner of floundering commuter airline, and Herb Kelleher, King’s lawyer, got together and decided to start a different kind of airline that would provide a short-haul, low-fair, high-frequency, point-to-point service in the United States. The company began service on June 18, 1971 with flights between Dallas, Houston, and San Antonio (“The Golden Triangle” as Herb called it). Southwest Airlines is the fourth

Southwest Airlines is based in Dallas and founded in 1971. They are known for their higher airfares and good customer services. (Elliot) The employees are known to be social with the travelers. They often times make changes and waive airline requirements. (Elliot) For example: “Robert Siegel and his wife scheduled a

Southwest Airlines Co., established in 1971 by Rollin King and Herb Kelleher, began its operations with only three Boeing 737 aircrafts. It is headquartered in Dallas, Texas(Hawkins, Misra, & Tang, 2012). Southwest is well known as one of the largest low-cost carriers. With this strategy, the company has dramatically grown up and deeply rooted in the US airline industry. Now, Southwest Airlines Co. operates 633 aircrafts to 93 domestic cities and the highest number of passengers used Southwest Airlines to fly around U.S in Jan 2014 (Hawkins, Misra, & Tang, 2012). To accomplish more than 40th consecutive years of both profitability and competitiveness, Southwest Airlines Company is constantly trying to find the routes to differentiate itself from other domestic carriers (Hawkins, Misra, & Tang, 2012).

Southwest Airlines Co. is an airline company that offers air transportation services within the United States and in international markets. The company operates within the airline industry that is highly regulated, technology intensive, labor intensive, and highly competitive (Southwest Airlines, 2017). Southwest Airlines operates a service business whereby the company offers a point to point air transport service to its passengers. Other than passenger transport, the company offers transportation services for pets and unaccompanied minors. The flights offered include short haul and long haul between various destinations within the United States and internationally. In 2016, the company’s operating revenues from international operations amounted to $383 million. A unique feature of the Southwest Airlines is its cost structure whereby the company focuses on cost discipline and uses one aircraft type to minimize costs.

Southwest Airlines was formed in 1967 by Rollin King and Herb Kelleher and started service in June of 1971. The airline is headquartered in Dallas, Texas and originally operated flights within the state of Texas. The company has since expanded and now operates flights from Dallas to almost all major cities in the United States and is considered the largest low-cost carrier in the country. “Southwest seeks to offer a travel product that is built around flights targeted to specific demographics and ticket pricing that is simplified so that passengers know

The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.

Many airlines offer a variety of service and flight options, and airlines have many different types of planes to meet that range of options. While this diversifies an airline 's offerings, it also increases operating costs and dilutes the core messaging of the company (Invesopedia, 2017). Southwest Airlines, on the other hand, only uses one type of plane, the Boeing 737. This saves Southwest Airlines millions in yearly maintenance costs and other operating costs this allows the company to offer low price solutions to its customers.

Southwest Airlines original name was Air Southwest in 1967 in Dallas, Texas, before the change of the name to Southwest Airlines in 1971. They were faced with battles due to legal issues with Dallas and Love field, because of the Wright Amendment, but the come to an agreement to allow 4 states to connect to Texas. Southwest bought 129 new planes, because of the expansion of the company growth, which currently have 141 planes that enhance the growth of the company because of shorter flights (Gimbel, 2005). Southwest was started in 1971, by Rollin King and Herb Kelleher, which released it first flight from Dallas Love Field that is located in Houston and San Antonio Texas. The passengers look for an airline services that can get them to their destination at a cheap price. Majority of the passenger are looking for an airline service that will eliminate layovers and multiple stops as possible.

Southwest Airlines is globalizing their company in order to reach a bigger market, and become competition for other companies. Southwest Airlines has already conquered the domestic market beating American Airlines, United, and Delta according to Fortune. Access to a new market is what motivated Southwest to globalize, they are expanding to the south of North America, with their new assets found in their acquired airline AirTran Airways (LeBeau, 4) . Southwest Airlines has brought low rates and a great experience to the domestic market, which was warmly received, they now plan to dip into global market to bring better service to all.

Southwest Airlines is a passenger airline company that arranges and provides scheduled flights for passenger and transportation freight services. The company mainly provides, low-fare, point-to-point services all over the US and near-international markets. The headquarters is located in Dallas, Texas and as of December 2014, the company employed over 46,278 people. The company was founded by Rollin King and Herb Kelleher in 1971. Southwest was the first airline to introduce the frequent mile program. This took place in the mid 1980’s. This type of program allowed passengers to add up traveled miles to use later as credit on a future airline ticket. The traveled miles would add up and would also reduce the price of a ticket. Southwest created the idea of senior discount, fun fares and the fun packs. These were perks that attracted people from different age groups. When Southwest originally was incorporated, the idea was to operate in three cities in Texas, but after taking over Morris Air and TranStar in 1987, this gave them a cutting advantage in the airline industry.

Southwest Airlines Co. began its operations in 1971 and has been serving the industry for the past 43 years now (Southwest Airlines, n.d.). It is the major domestic airline, and ranked number one in 2014 by the Bureau of Transportation Statistics (United States Department of Transportation, 2014). Back in 1971 the airline began its services in Texas in the cities of Houston, San Antonio, and Dallas. The company has been ranked as the nation's largest low cost carrier (Mergent, 2012). It offers the lowest fares, and has the lowest cost structure in the industry.

Grand strategies, often called master or business strategies, provided basic direction for strategic actions. There are many grand strategies that Southwest Airline can chose from when considering which strategies match with their company’s strength, weaknesses, opportunities and threats.

Low-cost carriers pose a serious threat to traditional "full service" airlines, since the high cost structure of full-service carriers prevents them from competing

Southwest Airlines faced many barriers to entry from the fierce competition of other airlines in the industry. Though competition was fierce, Southwest Airlines managed to succeed by doing things differently. Their mission was to provide affordable air travel to those who would not normally fly. Contradictory to the rest of the airline industry, Southwest maintained a profit while keeping its fares low. Southwest was unique to the industry in two ways. They focused on the short haul traveler and used a point-to-point method of flight connections.

Southwest Airlines Company (Southwest Airlines or ‘the Company’ SWA) is a passenger airline that provides scheduled passenger and freight transportation services. The Company primarily provides scheduled services throughout the US and near-international markets. It is headquartered in Dallas, Texas and employs 48,000 people and serves over one hundred million customers annually (“Southwest,” 2015). Southwest Airlines has accumulated over forty years of revenue and is one of the supremely flown airlines in the United States of America (Dess, et al, 2014, p. C137). Recognized for dominating the national or domestic airline market, Southwest Airlines’ diligence has built an