CASE ANALYSIS

ON
SOUTH WEST AIRLINES

SUBMITTED TO:
Prof. Ray Titus
GROUP 2
Aakash Ashesh - 50
Iswarya Sindhuja- 41
Puneet Kumar- 20
Rashmi Rekha- 54

CASE ANALYSIS STRUCTURE

This case is analyzed using the following structure:
1.
2.
3.
4.
5.
6.

The history, development and growth of South west over time

SWOT Analysis of South west
Kind of corporate level strategy South west is pursuing
The nature of South west business level Strategy
The companys control systems and how they match its strategy
Recommendations

THE HISTORY, DEVELOPMENT AND GROWTH OF

SOUTHWEST OVER TIME

SWOT ANALYSIS for SOUTH-WEST AIRLINES

Strength

Strong customer service

Great strength would be its punctuality
Superiority in IT sector
South West Airline is Financially Fit

Weakness
Union walkout due to unequal payment in 2008 and no hike in the salary since 2005
Violation of safety requirement. In 1998,117 aircrafts were unchecked

Opportunities
Opportunities would be its growing market, and
Efficiency enabler

Threats

Every airlines does the same

Fuel price volatility
Security, and
Economic downturn

Corporate level Strategy

Under this corporate level, the main focus of Southwest was to provide best class customer
service at minimum cost and along with that take care of the employees as well. Southwest has
encouraged its employees to identify with others at the company, deliver great customer service,
and have fun. The strategies Southwest airline used at corporate level are following:

1. It concentrates on the airports that are underutilized and close to a metropolitan area
2. Emphasized on buying fuel efficient planes which are of same type, so it helps in
reducing the maintenance cost
3. By avoiding the hubs between the destinations, Southwest able to avoid the delays in
flights.
4. No meal service, because it adds up their cost
5. Implementation of plastic boarding card which can be reused for the next time
6. Southwest seized the opportunity to expand in California and it was his biggest
achievement from zero market shares to leading airline.
7. Consistent with its strategy of Low-cost, Low fares, and Frequent flights Southwest also
keeps its fares simple.
8. Turnaround time was very less. And the planes were mostly in the air as compare to the
other airlines that also helps in reducing the ground charges.

Business level Strategy

With the corporate level strategies, Southwest also focused on the business level strategies as well
because as it was already mention that it was organization which takes cares of its employees, in
Southwest the top management believes that if your employees are happy they can serve your customers
in a better and efficient way.

While a number of industry experts attribute Southwests accomplishments to its unwavering adherence
to its cost niche strategy, others disagreed and agued that its real competitive advantage lay in its
leadership not in its cost effective strategy. In Southwest there was relaxed management style. The
following strategy was used at business level:
1. They renamed their Human Resource Department to The People Department, to gain their
employees trust towards organization.
2. They did not believe in authoritative work, everybody was doing everybodys work. The pilot
was helping the customers in boarding keeping their luggage, serving the cookies etc., the top
also visit regularly the cleaning departments and other departments as well
3. In Southwest, Teamwork was very important, in all their training they emphasis on teamwork and
teambuilding, all in good humor
4. Flexible working hours, people earn more with their extra working hours wages, which is quite
good enough
5. A real nonconformist structure, the company lets people be themselves.
6. Southwest does not look at industry experience, they seek for attitude they have policy of hiring
for attitude and firing for attitude

THE COMPANYS CONTROL SYSTEMS AND HOW THEY

MATCH ITS STRATEGY

Structure
Southwest airlines centered on team building
Cross training was encouraged throughout the organization
11% stocks of the company were held by its employees

 While hiring new people southwest used to identify attitudes rather than skills
Peer hiring was encouraged within the organization
Compensation provided to its employees were at par with the industry norms

Cost Control Strategies

Cost cutting Pilots contributed new ideas to save fuels
Fuel costs Bought fuel from vendors who offered best prices, at times carried inventory if
possible
No. of departures Southwest maximized productivity of people and machinery(At least 20
departures per day)
Low cost service Southwest airlines offered good service at low cost, cost per passenger for the
airline was just 7.3 cents in 1993
Conservative growth strategy For southwest airlines first priority was always expansion within
the current route structure, external expansion was only opportunity driven

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