Their service strategy is based on short-haul, point-to-point direct flights that are accomplished with amazingly short turnaround times. With their strategy, Southwest has a strong majority of the market share in the point-to-point market. Southwest’s goal is to make air travel affordable to all, both the time-sensitive business traveler and the price-sensitive leisure traveler. They are able to offer their low ticket fare because of good management-labor relations, fast turnaround time at the gate, faster speed of operations offered with smaller airports, and lower maintenance costs due to flying only one model of airplane. The strong leadership, strategy and culture that were built and are supported by Herb Kelleher, the former CEO of Southwest, support all these items that keep ticket fares low.
They also offer profit sharing which encourages the employees to help make SWA successful. Outside of their employees, SWA operates only one type of aircraft. This reduces the need to store additional parts and eliminates the need to train pilots and technicians. Lastly, they fly point to point, rather than from hubs, which reduces delays and captures demand as larger airlines might not fly from smaller airports. File 3. pg.
Overcapacity has led the major United States airlines to compete with Southwest's low fare pricing strategy. However, due to the company's brand image of efficient and effective low fare service, Southwest has been able to ward off its competitors (e.g. Delta, United, and American Airlines) and maintain its position of market share leader in the United States. As the industry becomes increasingly commoditized and US demand slows, it is time for Southwest to consider global options so that it ensures its presence in the future, while maintaining profitability. Who are some of the major competitors?
Introduction Despite the recession of American airline industry, JetBlue Airway’s profitability and productivity were still growing sharply after the terrorist attacks of September 2001and the distress of SARS in Asia areas in 2003. Therefore, the management decided to raise funds by initial public offering (IPO) in order to enforce the growth strategy. This article will analysis the advantages and disadvantages of JetBlue’s IPO by SWOT analysis, then, the recommended price will be provided calculated by P/E ratio and DCF methods and the limitations will be demonstrated as well. SWOT analysis of JetBlue: Strengths 1. JetBlue has a professional and experienced leadership team who dare to implement the innovations during the worst period in airline history.
Case Study: MERCK, the FDA, and the VIOXX RECALL To begin with, Merck was one of the world’s leading pharmaceutical companies which ranked1st on having the highest profit on the year 2005 (Lawrence & Weber, 2011). They were also named ‘The Miracle Company’ (Lawrence & Weber, 2011) and had a 7 succeeding years of status as one of the most ethical and socially responsible drug company. However, they faced problems which challenged them and was questioned about their recent launched drug which was called Vioxx. Due to the numerous analysis and trials the drug was then pulled out from the market on September 2004 (Lawrence & Weber, 2011). The Vioxx was believed to increased cardio vascular problems.
JetBlue's core strategy is to “provides high-quality customer service at low fares primarily on point-to-point routes" (“JetBlue”, 2005). Offering alternative choices to customers such as point-to-point routes to areas that are not catered to by most airlines as well as large metropolitan areas that have had” high average fares” is another part of their strategy. Differentiating their product and service is another part of the plan. Items like new aircraft, leather seats, free LiveTV at every seat and pre-assigned seating are just a few things that make JetBlue different (“JetBlue”, 2005). I would say that JetBlue would fall under both customer intimacy and product leadership customer value proposition.
In 2014 the integration of Air-Tran will be completed. Southwest’s People Management Strategy The basic strategy Southwest Airlines employs regarding people management is employees first, customers second. "We offer Employees the same concern, respect, and caring attitude within the organization that they are expected to share externally with every customer." (Hoffer, 2005) At first glance, this strategy sounds absurd. On the contrary, this outside of the box strategy has worked since the company began serving customers.
SWA did not have an HR department, it had a People Department. The guiding principle for hiring was “Hire for attitude and train for skills” (Dess, 2012). Ken Blanchard (2008), famous for The One Minute Manager, appeared in an employee training film. Blanchard says, “I think that Southwest started off from day one hiring people with potential and the right attitude. I don't think that they ever looked for people who were experts in the airline business, they can teach them that.” Kelleher’s commitment to his employees included empowering them as evidenced by the following excerpt from the SWA mission statement, “We are committed to provide our Employees a
The following are the case details. How Southwest is a values-based firm There are interesting facts that Southwest’s approaches to business are based on fun, trust, community, and family. For example, at Southwest, there is little cross training except only two formal teams: the marketing and reservations department. This means that Southwest promotes mingling the employees for informal networking and helping each other out in spite of their job assignments. “Flight attendants and pilots help clean the aircraft or check passengers in at the gate.
Case Study: Southwest Airline Southwest Airline started its operation at Texas intrastate market in 1971 with an image as “underdog” in the eyes of both employees and the Texas public. In its early marketing (1970s), Southwest retained the short-haul, high-frequency, low-cost, “Luv” strategy, which let it won the official “triple crown” of the airline industry 12 times by mid-1993 (see Exhibit 1). Question 1: What are some of the ways in which Southwest is different than other commercial airlines? Southwest Airline achieved its remarkable success and differentiated itself from other commercial airlines by many unique ways. * Service:Southwest Airline added “Family Fun” that includes playing games with passengers and hiring people who are fun that can translate to friendly into its customer service and employment, which makes passengers and employees like a big family.