CASE STUDY

Southwest Airlines History

Founded in Texas in 1971 as a small regional airline Mission Dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual price, and Company Spirit. 31 consecutive profitable years and consistently high quality ratings
Fewest customer complaints for the 13th straight year in 2003 Multiple Triple Crown winner in U.S. DOT rankings

Today Southwest is the largest airline in the United States

How do they manage their costs?

Point to point system. Single model fleet of jets. No meals , no first class and no seating arrangements. Less turn around time more air time. Good employee relationship

Point to point system

Single type of fleet (Boeing 737)

Less ground time and more air time

No seating arrangement. No meals so no catering service needed. Faster baggage service. Short routes .

Employee Satisfaction
Highly motivated workforce.
Employees have given 10% of company stock. Employee Retention rate is 92.3%.

An example showing loyalty of employee toward

southwest airline is, after losing a huge amount of business, each of its 32000 employees gave back some of their pay to help company.

Unique Planes

History Overview
1962: Walten Brothers opened fist Walmart in Arkansas 1970: Walmart became public 1990: 1st National retailer 1991: International Expansion 1993: Creation of Great Value 2003: Largest corporation in the world 2012: 50th Anniversary

Mission Statement, Vision, Goals, & Purpose

Mission Statement: To help people save money so they can live better

Goal:

Becoming in an international brand

Vision: If we work together, well lower the cost of living for everyonewell give the world an opportunity to see what its like to save and have a better life.

Advertising slogans: Save Money. Live better

Firms Value Chain

General administration Human resource management Technology development Procurement

Inbound logistics

Operations

Outbound logistics

Marketing and sales

Service

Cost Leadership Strategy- How?

Efficient supply chain management
Efficient because almost all product data can be tracked to and from the manufacturer, warehouse, and the store shelf. Saves Wal-Mart several million dollars as it can prevent losses from faulty product management.

Efficiency in operations and distribution strategies

Opens stores outside of large cities and within 200 miles of existing stores. By bunching stores together in small areas, distribution costs are below average. Seeks to meet different customers needs with four main distinct retail options; these include discount stores, supercenters, Sams Clubs, and neighbourhood markets

Cost Leadership Strategy- How? Contd.

Bargaining power
Wal-Mart buys its products at rock-bottom prices, exchanges high purchase volumes for low cost while passing the savings onto its customers. The bargaining power of suppliers is weak. Many suppliers even give in to Wal-Mart's pressure because they depend on the discount retailer for the majority of their sales The bargaining power of buyers is also weak because there is a very broad base of customers and a significant demand for low prices.

Cost Leadership Contd.

Extensive use of technology
Information of quantity orders transmitted via satellite to Wal-Mart HQ or to supplier distribution centers. Constant tracking of inventory by store managers and computerized systems help reduce inventory holding costs.

Cross docking
Products transferred directly from in-bound vehicles to store-bound vehicles, enabling goods to be delivered continuously to warehouses and thus eliminating inventory holding costs at this level.

The company owns a fleet of more than 3,000 trucks and 12,000 trailers. The Wal-Mart Way Cross Docking.

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