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8/12/2019 GROUP D - Southwest Case
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Case Analysis
Group D Ali Asghar Poonawala, Syed Taha Owais, Mohib Umr
Mohammad Ibad Desmukh, Maisam Ali Shams, Jehan
Hassan Khan, Minhaj Ahmed
8/12/2019 GROUP D - Southwest Case
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Proposed Vision
“Our vision is to be the Global Leader in
transportation, while providing highest valu
customers at an affordable price”
8/12/2019 GROUP D - Southwest Case
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Mission: Focus on Employees
“The mission of Southwest Airlines is dedication to the highe
of Customer Service delivered with a sense of warmth, friendindividual pride, and Company Spirit.
We are committed to providing our employees a stable work
environment with equal opportunity for learning and person
Creativity and innovation are encouraged for improving the
effectiveness of Southwest Airlines.
Above all, employees will be provided the same concern, res
caring attitude within the organization that they are expected
externally with every Southwest Customer.”
8/12/2019 GROUP D - Southwest Case
http://slidepdf.com/reader/full/group-d-southwest-case 4/15
Current StrategyLow Cost, Low
Fare
High
Frequency
No Frills
Almost No
Interlining
No Hubs, No
International
Regional
Service HQ inTexas
Point-to-Point
Short-Haul
Service
8/12/2019 GROUP D - Southwest Case
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ManagementPlanning
– Consistent Philosophy
– Higher Level CEO, Vice Presidents, Kelleher and Muse
Organizing – Functional (Procurement, Finance, Operations)
Leading
– Employees preferred over customer
– Special treatment.
– Flexible Working Hours
– Higher information dispersion
Staffing
– No excessive staffing
– No Excessive firing
– Employee retention policy: strong sense of loyalty
8/12/2019 GROUP D - Southwest Case
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Strengths
Low Cost Fast TurnaroundWork F
commitm
flexib
Differentiation: not justlow cost but better
service (on time, no
lost luggage, fewer
complaints)
Operational Simplicity Strong C
8/12/2019 GROUP D - Southwest Case
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Weaknesses
Low Economies of Scale (small relative to other
competitors, short routes)
No Hub System
Can sell only tickets from its own offices
No International Routes
Conservative Growth Strategy
8/12/2019 GROUP D - Southwest Case
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Opportunities
Market Expansion possible to over 100 cities
Longer Flights
International Expansion to Canada and Mexico
Introduce a better security system
Focus toward faster growth strategies.
Layoff Experienced Staff
8/12/2019 GROUP D - Southwest Case
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Threats
Weak Demand
Increased Competition: if they lose their Love F
Restrictions
Increased Regulation (noise)
Dependence on Domestic Markets
Competitors are adopting Southwest Airline’s st
to win more customers.
8/12/2019 GROUP D - Southwest Case
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Porter’s 5 Forces
•Competitors offering similar low fare service
Rivalry among Firms: HIGH
•High Capital Investment
•Strong Competition
•Unique Organizational Knowledge
Threat of New Entrants: LOW
•Railway, Car, Buses
Threat of Substitutes: Moderately LOW
•Many low fare service providers
•Buyers look for best value
Bargaining Power of Buyers: HIGH
•Airline Manufacturers (High Switching Cost) Boeing, Airbus
•Fuel Suppliers
Bargaining Power of Suppliers: HIGH
8/12/2019 GROUP D - Southwest Case
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What should Southwest do?
Market Penetration: Seeks to increase market share for present products or services in pre
markets through greater marketing efforts.
Market Development: Involves introducing present products or services into new geograp
Continue Present
Strategy: limitedgrowth?
Expand
Geographically: Point
to Point, serve otherregions efficiently
Expand
Geographically, Major
Hubs
Remain Regional
through numerous
hubs
8/12/2019 GROUP D - Southwest Case
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Recommendations
Geographic expansion to cities such as Atlanta and N
Flights to more cities both domestic and internationa
For domestic expansion, Southwest should continue
strategy of providing frequent, "point to point" flights
The expansion into new cities should be at a moderat
ensure adequate coverage of new markets
Ideal new cities will allow for non-stop flights. As the
the aircraft expands, the potential markets will also e
8/12/2019 GROUP D - Southwest Case
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Recommendations
Southwest should embrace new technologies
New technology includes new aircraft (safer, longer ran
Technology will allow: reduced costs, expand to more mand maintain image as a safe and reliable carrier
In the future, a fast growth strategy adopted by compemay hurt Southwest
Hence, Conservative growth strategy should now be cointo fast growth opportunities
Expanding into new cities would be less costly than expinternationally
Wh l f S h ?
8/12/2019 GROUP D - Southwest Case
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What can we learn from Southwest?
A simple, consistent strategy
Strong culture, family, performance
Both aspects of strategy (e.g., low-price, high-service) must be in harmony sustain internally derived competitive advantage.
Harmony among operating processes, organizational culture, and HR practic
another in the creation and conversion of value.
Created through satisfaction of employee needs, converting to customer and shar
capturing as competitive advantage through lower costs and superior service (pro
8/12/2019 GROUP D - Southwest Case
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Thank You