PRESENTED BY

GROUP-5
SARVPREET BHATTI-169 MANPREET SINGH-151 GOLDI-137 ATUL VIKAS-159 KUMAR ASHISH-171 RAVI KUMAR- 136

SOUTHWEST AIRLINES
If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline. You put your employees first. If your employees are treated right , they will treat your customers right, your customers will come back, and thats what makes your shareholders happy.

MISSION

The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit. It primarily provides short haul, high-frequency, point-to-point, low-fare air transportation service among 58 cities (59 airports) in the United States.

Incorporated in Texas in U.S. by Herb Kelleher and Rollin king in 1971 Commenced customer service with 3 boeing 737 aircraft Now operates more than 500 boeing 737 aircraft Operate more than 3300 flights a day 35000 employees engaged The United States most successful low-fare, high frequency, point-to-point carrier Known as a discount airline since 1973

For the 12th year in a row, FORTUNE magazine recognized Southwest Airlines in its annual survey of corporate reputations in 2008. 2003 Selected as AIRLINE FOR THE YEAR 2007 included in top 100 most innovative technology organization First airline to establish a home page on internet Ranked number one in customer service 36 consecutive year of profitability

Defined as: art of motivating a group of people to act towards achieving a common goal According to HERB KELLEHER

Leadership is a way of life, culture, desire and commitment Leadership is the job of every employee, not just upper level management Every employee should have the ability to ascertain situations and be able to act on their own decision Employees should be able to lead other employees to make decisions He does not rule over his employee but rather, rules with his employees

Work should be fun ...it can be play . . . Enjoy it. humour Both at workplace and inside the plane Work is important ...dont spoil with seriousness. altruism Welfare of people comes first People are important...each one makes a different. Employee and customer commitment

luv

SUCCESS IS HOW HIGH YOU BOUNCE WHEN YOU HIT

BOTTOM

WHY IT IS SUCCESSFUL ?

WHY IT IS SUCCESSFUL ? Competitive advantage Internal customers

Management style Leadership

Work-culture
Family spirit Trust

Open sharing of information

Training

Collective bargaining
Flexibility Discounted stock purchase

Creative spirit

WORK CULTURE COMPETITIVE ENVIRONMENT

People consider it as crusade instead of business. Most glowing star in southwest policy.
Eagerness to be at the top. Challenges top competitors as US AIR,UNITED, DELTA CEO HERB KELLEHER played major role with his unique mgmt style. Team of PARKER, COLLIN to handle .

LEADERSHIP

TRUST

Trust of customers declared it as most admired airlines and company.

OPEN SHARING OF INFORMATION

Respects ideas of employees.

Committee of managers, employee interaction.

CREATIVITY SPIRIT

Respect for sense of humor.

Compatible attitude of learning.

 Employee satisfaction Customer service Low fares Stable profitability Scheduled service Leadership

No international flight. Carry small amout of freight and cargo. Inconvenience to business customers
Strengths
Weakness

Opportunity

Threats

Operate At International Level Focus On Popular Destinations

Government regulations and restrictions Fluctuation in gas and oil prices

Integrated Low Cost/Differentiation Strategy

Use a single aircraft model (Boeing 737) Use secondary airports Fly short routes Low cost meals 15 minute turnaround time No reserved seats No travel agent reservations

 Fuel

hedging

Purchased fuel options for years in advance to smooth out fluctuations in fuel costs Substantially increased its hedging in 2001 in response to projections of increased crude oil prices Advantaged after Sep. 11, 2001 attack, the oil shock from Iraq War, and Hurricane Katrina
Operated

only one model of aircraft

Boeing 737, medium range-narrow body commercial passenger jet aircraft Easy to replace parts and ground support equipment

PRICE ELASTICITY OF DEMAND

The percentage change in quantity demanded (Q) that occurs in response to a percentage change in price (P)

 The

firm identifies different consumer groups, in the market, each with a different demand curve.
Southwest Airlines recognizes that any given flights has different types of travelers
Business travelers vs. Vacation travelers

To

maximize profit, the firm sets a price for each group by equating marginal revenue and marginal cost.

Southwest Airlines uses third-degree price discrimination to fill the plane with travelers in the most profitable way Depending on the price of elasticity of demand for tickets Charge a higher price for business travelers who have relatively inelastic demands and vice versa Employee and customer satisfaction