Presented By: Kelly BossoltMarta KovorotnaSarah Smith

Executive Summary

Financial Analysis External Analysis

Entry & Rivals Industry Customers Substitutes, Complements, Acquisitions

Internal Analysis Recommendations

External Analysis: Entry

Deregulation Act Enabled new entrants

150 went bankrupt 8/11 developed merging agreements

Created competition Creating lower prices

Creating more travelers

Rivals Delta, United, American

80% Domestic Market, 67% Trans-Atlantic Market

External Analysis: Industry

2nd Tier Providers Took on the abandoned

and ignored markets

Hub – and – Spoke 80% costs were fixed Control Mechanism

Sublease for premium (18% higher for Southwest)

Efficient

External Analysis: Customers

“The ones that could afford to fly, and the ones that couldn’t”

Two types of travelers Convenience, time oriented Price sensitive, leisure

Two tiered Pricing structure to accommodate both

External Analysis: Substitutes & Complements & Acquisition

Substitutes Train, Bus, Boat, Car, Horse

Complements Meals, Comfortable seating,

Television

Imitator JetBlue

Southwest acquired and integrated into its own

Diversified locations Slightly more sophisticated

Leather Seats, Televisions

Recommendations

Move to international markets Not necessarily Trans-Atlantic, but integrate new

markets