Strengths of Southwest Airlines Swot Analysis • Has experienced very fast growth since its inception in 1971. • Offers credit based on the number of trips with the airline instead of the total miles traveled. • Was the first to offer senior discounts, ticketless traveling, and services for air freight delivery. • Carefully considers each applicant so that they are sure to hire the best employees which leads to excellent service for their customers. • Offers reasonably priced travel packages with low frills and excellent customer service.
Southwest clearly defines its existing purposes, which is to provide the lowest fares for business and leisure travelers traveling between states. Instead of competing with large-scale airlines to fly international routes, Southwest focuses on “point-to-point” interstate short trips, and more on maximizing the profitability than focusing on market share. This strong vision outweighs the allurement of international flight market, keeping Southwest airline concentrated on its own niche to gain profit. B. Cost-consciousness Since low fares have become its selling point, decreasing the cost becomes very important. Southwest Airlines tries to save money by simplifying its operating process.
Highly competitive industry 2. Unsuccessful implantation of growth strategy 3. The hiring of competent staff who maintain the culture of JetBlue JetBlue’s strategy of maintain customer excellence and providing needed low cost service is a definite way to stay up above the competition, customers want a low cost airline that gives them what they need in terms of pricing as well as destination. JetBlue, will be in a position of failure if a growth strategy is not in place to increase capital and foresee methods in which to cover debt and make a profit “ Achieving our growth strategy is critical in order for our business to achieve economies of scale and to sustain or increase our profitability” (JetBlue,2004) Gating is an important issue that must be looked at, due to the fact it could limit their sales “We will also need to obtain additional gates at some of our existing destinations. Any condition that would deny, limit or delay our access to airports we seek to serve in the future will constrain our ability to grow” (JetBlue, 2004).
[pic] Colorado Technical University Southwest Airlines: Porter’s Five Forces Term Project - Final Professor Hanji Wu Submitted in Partial Fulfillment of the Requirements for ECON 616 Applied Managerial Economics By Larry Rodgers, Brent Packard, Leanne Marks, James Ladwig Colorado Springs, Colorado September 2012 Southwest Airlines: Porter’s Five Forces Analysis Southwest Airlines continues to show their strength in this tough industry. With the company’s main focus in keeping costs down, they are in a much better position than the rest of the airline industry in continuing to make profits during this current recession with customers being careful with their money. In fact, while most airlines strongly compete for their fair share of the market which has an impact on their ability to make a profit, Southwest’s focus has been on discovering new ways of increasing their profit. (Bundgaard, et al, 2006) Rivalry Among Existing Firms The threat of rivalry is high. Price competition has been the primary focus of the rivalry among airline companies.
JetBlue has an economy of scale for cost on a seat per mile basis, even surpassing Southwest airlines. Southwest’s cost per seat/mile is 6.53 and JetBlue is now at 6.08. JetBlue has a cost advantage because its competitors cannot match their low costs of seats/mile basis. JetBlue prides them-self in keeping their flights on time and
It comes to a surprise that US Airways Group is capable of doing so well despite the low quality of service they seem to provide. US Airways Group has recently merged with a competitor within the airline industry, American Airlines, and the two companies are expected to do very well as a team. The airline industry is one of a kind, as it does not have very much competition within the industry. As US Airways Group has shown; the little amount of competition makes it easy to do well even with poor service. The airline continues to grow and keep companies like US Airways Group in business mainly due to the rapidly growth of the industry.
JetBlue Case When first started, JetBlue was of the cost leadership type of generic business strategy, in which the company improved upon the low-fare airline business model of the SWA to reduce its cost below that of its competitors, and offered its costumers ticket with lower price. However, later JetBlue started to pursue the integration strategy in order to enhance its differential appeal while keeping costs low, but I believe its ultimate goal was to transit toward differentiation strategy. JetBlue added many new value-enhancing features and was trying to offer its customers better customer experience. However, because requirements are conflicting between cost leadership and differentiation strategies, JetBlue faced challenges pursuing the integration strategy. The first and the biggest challenge was adding unique features and services while still keeping costs and ticket prices low.
Winner: IBM is the best winner because it created the highest profits as the initial developer in blue ocean industry. Meanwhile, American Airlines also the winner as it adopted newly developed systems for its management efficiency. Stage2: The Government Intervention GDS companies tyrannized over small airlines and travel agents by discriminating booking fees and using 'halo effect'. In respond to the complaints of airlines and travel agents, GDS' discrimination was prohibited. Winner: Relatively small airlines and travel agents could overcome the obstacle of discrimination.
Describe the different stakeholders who influence the purpose of two contrasting businesses Describe how two contrasting organizations impact the goals and aims of the company. The key stake holders of easy jet consist of: Customers: the customers of easy jet want the services of a company to be the best of them; this means that the customers want the company to provide the best service possible. The point of view from the customer is that if they are buying a ticket they want to be taken from A – B as fast and cheap as possible so if the company raises prices or goes green and such it affects them and they wish to be taken into consideration. These people wish to get cheaper flights from the company. They have influenced the goals of the company by trying to get it to be cheapest yet profitable flight provider.
Business Needs Based in Luton, England, easyJet is the largest airline in the United Kingdom and the fourth-largest carrier in Europe. It operates 685 routes and sells 61 million tickets annually. Building on its reputation for providing great service at low cost, the airline wanted to improve the customer experience without adding staff or IT infrastructure. * * It was actually faster deploying to Windows Azure than it was to our own internal test environment in some cases. We can try new things quickly, with very low risk and cost.