Summary Southwest Airlines (A)

It all started in March 1967 when the founder Rollin W.King started the Southwest airlines, as there was a need of a new airline within the destinations of Houston-Dallas-Fort Worth, and San Antonio. But with the introduction of Southwest Airlines the previous airlines that operated with in that zone went to the court for an dispute, where they thought that another airlines was injustice in there market demand, litigation process was costly and time consuming but in the end U.S Supreme Court gave its verdict in the favor of Southwest Airline. During 1970s Lamar Muse an independent financial consultant approached king and said that his idea was right and he can implement the idea for him with sustainability and commercial viability. Once kings idea was in the way for getting implemented there were some issue which needed to be addressed, such as pricing and advertising. As pricing cannot be the one which was previously charged by the two stakeholders in the industry as asking more price would not make the airline viable in the market, secondly there were few issues at the time of advertising as they cannot advertise directly before they launch the airline on June 18th, as the promoting anything before stock issue was considered violation of securities and exchange commission regulations. Therefore they first advertise the airline with in there personnels and advertised indirectly and mentioned a call number where if customers call would know about a new airline which is starting it business on June 18th. There advertising campaign was related to a love affair that mentioned that we dont charge price for flight but we provide a love affair relationship when a customer travels with Southwest Airline. As a new company they faced many challenges but they coped with different strategies to compete with in the industry. One of there strategy was associated with the secretaries where they give stars on the performance of secretaries. The performance meant that those secretaries who bought tickets for their bosses where in the end rewarded with a trip to Mexico. Southwest airline also went all out to make scheduling in place before the start of their airline as their competitors were considered to be most unscheduled Air carrier. Southwest airline we can say used an overall cost leadership approach not only on price but also in every aspect by even reducing its seats to provide customers much more leg space, and even

on some occasions to provide customer more friendly atmosphere by introducing the concept of party by every weekend.