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Southwest Airlines

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Renee Nelson

on 15 April 2014

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Transcript of Southwest Airlines

Founded in 1967
increased market share

Fares well when looking at domestic flights

Acquired AirTran
Marketing Analysis
Strategic Shifts
Introduction of First Class Seating for higher fees
Further increases in International Flights
Shift in Culture - return to Southwest's early days
New Marketing Campaign - Everyone is First Class
Environment Evaluation
Industry Overall Attractiveness:
Economic Conditions
Technological factors
Political/ Legal/ Regulatory
Natural Resources
Presented by: Yao Chen, Wen Qin, Renee Nelson, Jhett Rouse, & Michael Buchanan
Key Issues
Further differentiation

Expand operations
Vision & Mission
tells "what we do"
identifies service, not product
centers on triple bottom line
graphic, directional, focused, flexible, feasible
not specific & is lengthy
Corporate-Level & Functional Strategies
Blue Ocean Strategy
one size fits all
Low Cost
point-to-point flights
upgraded planes & flight procedures
Best Overall Travel Experience
"lots of flights to lots of places"
customer service
Gain market share & increase profit
price elasticity
curtail flights
Competitive Strength Assessment
Organizational Efforts for Good Strategy Execution

Herb Kellerher (CEO)

James Parker (CEO) & Colleen Barrett (COO)

Gary C. Kelly (CEO)

Employee-centered Company Culture
Core Competencies
Warrior Spirit

Servant's Heart

Fun-LUVing Attitude
Ethics & Social Responsibility
Company's triple bottom line: Performance, People, and Planet

Environmental Responsibility:
Purchasing renewable energy
Using alternative fuels where they make financial and operational sense
Acting aggressively to conserve jet fuel
Recycling, waste minimization, and beneficial reuse
Team up to reduce emissions
First Class Seating
Potential to increase revenue
Other airlines have been reaping the profits for years
Potential to attract buyers that might not fly Southwest since they are "too cheap"
Increase in International Flights
Potential to increase revenue
Loyal customers of other airlines might be more swayed in international flights due to lower costs
Large cost of international flights mean that a percent difference in price is more attractive to customer than domestic
Culture Shift
Southwest has become more like the larger airlines it once fought against
Rebellious spirit and heart has seemed to have faded away
Revitalize the image as the most fun airline to fly
New Marketing Campaign
Everyone Flies First Class
First Class customers are always treated much better in comparison to other lower classes

Train flight attendants to be more gracious & sincere to all customers

Invest in new seat ergonomics & technology in order to make all customers happy

Make it a key factor to be the best standard class airline with service on par with first class
New Strategy Shift
Incorporate a new culture bringing back the early days of Southwest

Expand to new international markets

Treat all passengers as first class passengers

Create an airline that is fun to fly on that treats its passengers better than any other airline & attract new customers in new markets
5 strategic objectives
vision specific targets

Financial objectives
strong balance sheet
"lots of cash"
Southwest must evolve with the competitive airline market, but do so in a way that keeps Southwest true and rich in identity and history
Porter’s Five Forces Analysis:
Substitute products
Buyers bargaining power
Potential new entrants
Supplier power
Rivalry among competing sellers

It is very important for an organization to have a marketing mix that fits with the company’s objectives and goals

The marketing mix has four basic parts which include
Basic Budget Airline

High Quality Personal service
Domestic Only
Smaller Airports
Constantly looking for expansion
Concentrate on places with decreasing flights.

Southwest has one of the higher budgets in America

Bags Fly Free
Budget Airline
Maximum Seat Capacity
Boeing Plane 737 Only
Ticketless Travel
Fuel Stockpile
A defining capability or advantage that distinguishes an enterprise from its competitors.

Two Main Core Competencies
Great Personal Service Culture
Best Cost Advantage
Great Culture
Low Complaints

"Can do" Attitude

Triple Crown Award
Best Cost Advantage
Turnaround time

Minimal luxuries expected

Exclusive use of Boeing 737
Full transcript