Presented By: -Mehak Kohli: SMBA 08116Praful Anchaliya: SMBA 08155Rohit Jain: SMBA 08189Sheetal Vishnoi: SMBA 08216

History of Southwest

• 1971-1994:• Unique low cost carrier is born• Golden Triangle (Dallas-Houstan-San Antonio)• Ten minute turn around time• Spreading on the “LUV” theme• Self-ticketing machines• Over 22 aircrafts• Ranked no. 1 in customer satisfaction• Wins the 1st monthly & later on annual Triple Crown• Introduces Ticketless Travel in 4 cities.

ORGANIZATIONAL CULTURE

“Doing the Right Thing”

Mission: “Dedication to the highest quality of Customer

Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.”

SOUTHWEST SPIRIT

Warrior Spirit– Work hard– Desire to be the best– Be courageous– Display a sense of urgency– Persevere– Innovate

Servant’s Heart– Follow the Golden Rule– Adhere to the Basic Principles– Treat others with respect– Put others first– Be egalitarian– Demonstrate proactive Customer Service– Embrace the SWA Family

SOUTHWEST SPIRIT

Fun-LUVing Attitude• Have FUN• Enjoy your work• Celebrate successes• Maintain perspective (balance)• Be a passionate Team player• Don’t take yourself too seriously

CASM Analysis

Stands on top of CASM

Increased fuel-price had no effect

Replaced 737-200s by 737-700s

(1976-2005)

Strategy MapHiring & Selection

-Hire for Attitude-Humor taken Seriously

Organization StrategyMission: Dedication to the highest quality

of Customer Service delivered with a sense of warmth, friendliness, individual

pride, and Company Spirit

Success-Customer Satisfaction-Increased Revenue-Employee retention-Productivity

Training & Development

-Orientation- fun activities-Ongoing advanced employee training -Mentorship Program for new hires-Departmental trainings

Employee Behavior & Competencies

-Right Competence-Quality Focused and Committed Workforce-Attractive Workplace-Participation encouraged-High employee Morale-Respect and Trust

Performance Management -SWA Magic Numbers

“Knowing the Score” Program-Employees Incentive Bonus Plan

Motivation-Hygiene Factors--Profit Sharing and 401(k) --Safety Standards--Flexible healthcare benefits--Job security --Stock purchase plan --Life insurance --Paid Time Off -Motivators--Responsibility--Ownership--Recognition and awards--Employee Initiative--Equal Employment--Opportunities

Competitive Analysis

Rivalry

Jetblue

Suppliers

Maintenance People

Fuel ProvidersFood Providers

Substitutes

1. Brand competitionContinental Airlines and

American Airlines

2. Generic competition train (Amtrak) and

bus(Greyhound)

Customers

Leisure travellers, Businessman, College

Students

Competitors

Braniff, United Shuttle, Delta, Trans

VALUES : 5 F’s

• Flamboyance

• Freedom

• Fun

• Freshness

• Family

Radio ad for Southwest

A FAQ

Children in ‘LUV’

•Designed for leisure travelers

•Frequent sing-a-long and warmth put forth by the flight staff

SUCCESS STORIES

• Major airline to make profits(1990,1991 and 1992)

• Fewest Customer Complaints

• Ranked one in the airline industry

• Ranked second across industry

• More passengers, fewest employees

• Investment grade credit rating

SWOTStrengths

Fast Turnaround Committed

Workforce Strong

Management Team Focus on

PSP(People-Service-Profit)!!!

Competitive Advantage

First Mover Advantage

Opportunity

Weaker Competitors

International Expansion

Take up routes abandoned by competitors

Long haul flight - Tap undeveloped market

Dominant position -Offers pricing power

High fuel prices – Exit of unprofitable competitors

Weakness Threats

Fully valued Share Price

Limited Alliances

Competitor - Jet Blue Airlines

Internet reliance - Risks (system disruption)

No frills -> limit frills - Increase operation cost

Southwest’s Performance

• Only major US airline in 1990, 91, 92 to make both net & operating profits

• Averaged more than 12% return on investment & 23.6% return to shareholders

• One of the few airlines in the world with an investment grade credit rating

• Ranked first in the airline industry in fortune magazine’s 2002 America’s Most Admired Companies list

RECOMMENDATIONS

• Continued Gradual Expansion

• Maintain their success story

• No Internationalization

THANK YOU