Southwest Airlines Eassy

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Analysis of Southwest Airlines and the Airline Industry in the US Patricia E. Vazquez

TABLE OF CONTENT
Abstract .........03
Introduction.........04
A Foundation of “Love Options” .. ...04
Southwest Airline’s Strategies......05
Southwest Airline’s Operations......06
Southwest Airline’s Performance......06
Southwest Airline’s Competitors......07
The Airline Industry in the US..... 07
Rivalry, Magnify for Several Factors ....09
Treat of Entry: Disappearing from the Radar Screen...09 Substitutes: Cars, Buses or Trains? .....10
Supplier Power: Low, Moderate or High....10
The Variability of Buyer Power.....10
Southwest Airline’s SWOT Analysis......11
Southwest’s Internal Analysis: Flying High....11 Southwest’s External Analysis Flying Overseas...12 Delta Airlines, Inc. SWOT Analysis......13
United Continental Holding, Inc. SWOT Analysis ....14
Spirit Airline’s SWOT Analysis: Fly With Spirit....16 Conclusions .........17
References.........18
ABSTRACT
The Airline Industry has suffered intense competition since its deregulation in 1978 increasing rivalry in the players. Airline sector has to compete for low prices and product differentiation to attract customers and gain a sustainable profitability. The Airline Industry was analyzed through the Porter’s Five Forces to identify grade or rivalry, barriers to entry and exit, possible substitutes, supplier and buyer power. The purpose of this paper is to analyze how Southwest Airlines (Southwest) developed a sustainable profitability based on its different strategies. It also shows how it succeeds in the US Airline Industry and how it differentiates its service from its competitors. The analysis includes the Strengths, Weakness, Opportunities and Treats (SOWT) for Southwest and other competitors, reflecting how difficult it is to imitate Southwest’s product and how difficult it is for Southwest to imitate the product of other players.

Analysis of Southwest Airline and the Airline Industry in the US Introduccion
A Foundation of “Love Options”
Founded in 1967 by Rolling King and Herb Kelleher, Southwest started its operation in 1971 covering Dallas, Houston and San Antonio. Lamar Muse, its president adopted the “love” theme for attracting customers: “love options” was referred to the drinks served on board, the “love machines” were the ticket machines, and cabin hostesses had seductive voices and used sexy outfits (Muduli & Kaura, 2011). Herb Kelleher, CEO of Southwest (1981-2001), received credit for Southwest’s success for its personality and management style. He conducted Southwest with fun, fresh and unique perceptions of loyalty; its legendary humor enabled his employees to enjoy their work. He led the company new standards for himself and the Industry (Peter & Donnelly, 2013). Kelleher created a culture at Southwest by making employees feel like part of a big family, achieving team spirit and providing information to enable them to better understand the company. By sticking to a formula of excellent customer service and a positive work environment, Southwest gained an extensive period of profits (Desai et al, 2012). Southwest culture is inherent in its mission statement “… dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.” (Jackson, W; & Jackson, M., 2009, p. 64). Continuity of Kelleher’s leadership and culture may result in sustain profitability. The present paper is an analysis of Southwest’s strategies, operation, performance and competitors to visualize if the company is successful, imitative and sustainable. For a deeper understanding, an analysis of the US airline industry using Porter’s five forces...
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