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Southwest Airlines - Case Study Example

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Southwest Airlines

The company battled in court against its rivals in Texas to establish for almost four years. In 1971, Lamar Muse joined the company as the CEO and led the company to an attractive IPO (Thompson & Gamble, 2011). Together with funds from private investors, and the IPO, the company managed to raise lose to seven million USD, funds that were used to purchase aircraft, equipment, and start-up capital. The company hired several relented senior staff most of who were veteran executives from other airlines. The company’s first flight went through successfully. As of mid 2001, the company had a fleet of about 350 planes plying across 58 airports in the U.S., and boasted of enjoying a turnover of about 5.5 billion USD annually (Thompson & Gamble, 2011, p.281). The company used different strategies to grow and in 2010, the company emerged the share leader of US domestic air travel (1). The company transported more passengers to various destinations in the United States than any other airline in 2010. Furthermore, the company boasted of offering the most reliable schedule and made profits consistently over the years unlike many of its counterparts. Company Strategy The Southwest Airlines has applied several strategies to see its success in the competitive market environment. Some of its strategies included providing hostesses with attractive clothing, offering free drinks to passengers, using an attractive tagline, and increasing its operational capacity without having to buy more planes initially. The company also realised its main market segments (business travellers and price sensitive leisure travellers) and maintained lower turnaround times compared to its competitors (Thompson & Gamble, 2011, p.279). Yet again, the company applied a different pricing strategy by incorporating different fare prices for the on-peak and off-peak periods. Essentially, the airline pursued a strategy that revolved around low cost, no frills and low prices (Thompson & Gamble, 2011, p.285). The company presented a customer care service that was dedicated to customer satisfaction with a fun loving attitude and happy face. The Southwest Airlines low cost-low price and no delays strategy emerged a winning strategy going by the remarkable results it has achieved over the years. As previously noted, the company consistently made profits and its customer and revenue base kept growing against those of its counterparts. The strategy is lovely considering that it focuses on the very needs of the targeted market segments without forgetting about the employees (Thompson & Gamble, 2011). On a scale of 1-10 with ten being the best score, I would give the company a rank of 8. Southwest’s Culture An organization is said to have a strong culture if its employees respond to stimulus owing toe the way they are aligned to the values of the organization. The Southwest Airlines has a strong culture that is pegged on various elements. The employees of the company are well trained and respond to the needs of the customer and the values of the organization efficiently. The company maintains a culture of keeping employees happy and motivated so that they can offer quality services. Furthermore, the company maintains a culture of excellent customer service. The company also maintains a culture of hard work, innovativeness, and teamwork. With the departure of Herb Kelleher, Gary Kelly is bound to face a number of challenges with respect to maintaining the company’s cultural commitments. For one, the company’s reputation has been tarnished following some accident and safety incidences which may affect the morale ...Show more

Summary

The Southwest Airlines was established in 1966, a brainchild of Rollin King, an entrepreneur from San Antonio (Thompson & Gamble, 2011). The business was formally incorporated in 1967 with Herb Kelleher as a shareholder. …
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