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Southwest Airlines Case Presentation

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Southwest Airlines Case Presentation
Management Control System Case
UPDEPO
By
Bert Enriquez JR

Background
Southwest:

of

June 18, 1971: Headquartered at Love Field in Dallas, it began flying with three Boeing 737 serving following Texas cities: Dallas,
Houston, and San Antonio
2002: Recognized by Fortune magazine as the most admired
Airline Company and listed in “100 Best Corporate Citizen” by
Business Ethics
2004: Total operating revenue of $6.5 billion and 31,000 employees. Evaluation
Problem:
1. What is Southwest’s Strategy?
2. What is the basis on which
Southwest build its competitive advantage? 3. How do Southwest’s control systems help execute the firms strategy ?

Framework for Analysis
Mc Kinsey 7s Model

Strategy

Staf

Style

Structure

Shared values  The framework is based on the theory that the success of a company can be seen thru the integration and linkages of the diferent

Systems

elements of its activities that are mutually reinforcing and goal congruent with the

Skills

Hard Elements

Soft Elements

Strategy
Structure
Systems

Shared Values
Skills
Style
Staf

mission of the company

Source: Mindtools.org

Southwest Hard Elements

Southwest
Strategy

Corporate Level Strategy
• Single Industry: Airline Travel

Business Unit Strategy
• Hold : Star ( High Market Share and High
Growth Rate)

Product or Service Strategy
• Low Cost

Value Proposition
Which
Customers
?
What
Needs?

At What
Price?

What End users? Which
Products?

Premium?

What
Channels?

Which
Features?

Which
Services?

Discount?

Source: Joan Magretta, “Understanding Michael Porter: Essential Guide to Competition and Strategy” , Harvard Business Publishing 2012

Southwest Value Proposition
Which
Customers
?
What
Needs?

At What
Price?

Frequent
Business
travelers

Economy
Minded
Pleasure
Traveler

On Time and
Convenient

Low Cost
Travel

Cost
Efective

Discount

Comparative Value
Chain
Supply
Chain

Traditional
Airline
Southwest
Airline

Marketing

Operations

Market Driven

Ticketing
Agents

57 minute

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