South West Airlines

In: Miscellaneous

Submitted By mechatron8
Words 1467
Pages 6
Introduction: Southwest Airlines has carried more customers than any other U.S. airline for combined domestic and international passengers. Southwest Airlines is one of the world’s most profitable airlines, posting a profit for the 36th consecutive year in January 2009. Southwest has built a successful business on an unusual model: flying multiple short, quick trips into the secondary (more efficient and less costly) airports of major cities, using primarily only one aircraft type, the Boeing 737. Brief History Suppliers, Customers & Rivals: Customers include both residential and commercial sectors. There is no bargaining power for customers, as there is no threat of backward integration; it is unlikely that customers of Southwest Airlines are going to build their own airplanes and fly themselves.

Rivalry among competitors sets the price-Southwest Airlines is a discount airliner. Rivalry is increasing, as the market decreases, and competitors downsize, the competitors become more or less equal in size and capacity. This means that as economic conditions worsen, competitors downsize and then compete for the same remaining market. Few of their main competitors are Continental Airlines and American Airlines. Substitute products include the train (Amtrak) and bus (Greyhound) which cover long distances. While these alternates cannot offer the speed of travel, most of Southwest Airlines' customers are attracted to the low price.

*Key Success *Strategies of SWA: Organization of Southwest Airlines is described as an upside-down pyramid. The upper management is at the bottom and supports the front line employees. This is Herb Kelleher's unorthodox leadership style, in which management decisions are made by everyone in the organization, not just the head executives. Southwest Airlines' success is primarily because they have focused sharply on their goals. This…...

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