Southwest Strategic Case

Topics: Southwest Airlines, Airline, Low-cost carrier Pages: 8 (2004 words) Published: April 29, 2013
I. Overview

Over forty years ago, Southwest Airlines began as a small airline determined to keep things simple. They strived to provide their customers with the lowest fares, get them to their destinations on time and, most importantly, make sure their employees and customers were happy throughout the whole process.  These practices have been upheld over the years as the airline continues to grow and prosper.  Southwest Airlines has maintained their small company roots and southern hospitality style customer service, coming from Texas, even though they’ve climbed the ranks in the American airline industry.  Southwest now operates in 69 airports, in 35 states across the country.   Southwest Airlines was originally named Air Southwest. This, now household name, was started on March 15, 1967, by Rollin King and Herb Kelleher.   Southwest Airlines is a low fare airline that started out of Dallas, Texas. They didn’t get their first flight off the ground until 1971, due to legal complications. They originally flew what was the called the golden triangle, which were non-stop flights between Dallas, San Antonio, and Houston.  Kelleher took over as CEO in 1982 and expanded Southwest farther than anyone would have thought possible ten years before. They originated with a low cost strategy, by flying short “point-to-point” flights, which made it consumer friendly. They also only operated one type of plane, the Boeing 737, which kept their cost of training to a minimum, and allowed flexibility for which employees would be on which flights. Their costs were so low, they were giving bus and car transportation a run for their money. Their turnarounds at airports were close to only 25 minutes, letting them fly more often and efficiently. In his time as CEO, Kelleher tried developing a culture that was enjoyable for everyone, from flight attendants to people in the operations offices. His principle for recruiting and hiring people was “Hire for attitude and train for skills.” He chose to hire people who were fun to be around and enjoyable to work with. He wanted people to be who they were, and not put a mask on when they had to come to work. Kelleher also stated that the key to satisfied customers was having satisfied employees. Today they are the largest airline in the United States by number of passengers carried within U.S. borders per year and, the third largest airline in the world in terms of number of passengers carried.   Southwest is also one the most profitable airlines in the world.

II. Strategic Issues
Should Southwest form a strategic alliance or partner up with any airline services in Europe? Should Southwest attempt to maintain growth in the industry with their current operational strategy, focusing mainly on domestic flights and their home grown mentality?

III. Relevant Facts
• Europe is the second largest airline market in the world to the U.S. • Very good brand equity in Southwest already
• Merger provides quick entrance into market
• Strong roots in staying domestic and serving locally • Increasing market in flight travel in near future
• Compete with other airlines by expanding

IV. Analysis of Alternatives
Expand to European Market
|Pros |Cons | |Reduce entry risk with partnership |Risks outweigh returns | |Quick access to large market |Training |

Focus on Domestic Market
|Pros |Cons | |Extremely popular |No expansion...
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