Southwest Airlines

Group G:

Rajeev R. Pandey Sudeep Byanju Sunil K Pokharel Umi Joshi Yubaraj Chaudhary
Aug. 2013

Mission

To Our Employees
We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer. January 1988

Correction Required

Revised Mission Statement

Grow as the most efficient airlines profitably to satisfy employees and fliers to establish a trusted brand for value and respect for mankind.

Major Strategies
Low cost
High level of customer service Penetration in undiscovered market at second-tier airports

Basis of Competitive Advantage

Cost advantage due to No Frills approach. Hedging the fuel futures Lowering the operational cost Low turnaround time No Hub-and-Spoke system Minimum dependencies on Sales Agents. Efficient sales channel at low cost. Marketing strategy Frequent Flier Technically sound and Customer Focused crew members Good credit rating Good leadership Compliance with federal regulations Down to earth method of Public Relations Good labor relations because of profit sharing and company stock engaged and committed employees Consistency in performance

IFE Matrix
Key Internal Factors Strengths 1 Customer Satisfaction 2 Southwest's Web Site 3 Employee Satisfaction 4 Increase in Air Traffic 5 Financials 6 New Aircrafts 7 Expanding Market Reach 8 No ticket cancellation charge 9 Established Brand 10 Selecting employees carefully 0.16 0.1 0.16 0.04 0.05 0.04 0.04 0.03 0.03 0.03 4 3 4 4 3 4 3 3 3 3 0.64 0.3 0.64 0.16 0.15 0.16 0.12 0.09 0.09 0.09 Weight Rating Weighted Score

Weaknesses 1 Debt 2 Mounting Operating Expenses 3 Relative Expensive Price of Product 4 Use of only the Boeing 737 airplane 5 Limited geographical coverage 6 Space to carry freight and cargo is limited 0.1 0.1 0.01 0.07 0.02 0.02 2 2 2 1 2 2 0.2 0.2 0.02 0.07 0.04 0.04

Total

1.0

3.01

Industrial Comparison

http://www.airlinefinancials.com/airline_data_comparisons.html

EFE Matrix
1 2 3 4
Key External Factors Opportunities Expansion to new geographic areas Gaining market share lost by competitors Acquisitions Business Alliances for food and beverage Weight Rating Weighted Score

0.2 0.1 0.1 0.04

0.05 0.04 0.04

4 3 4 3
3 3 3

0.8 0.3 0.4 0.12

0.15 0.12 0.12

5 Research and development to advance procedures and services with the industry 6 Offer discounts to new category of needy customers 7 Application of technologies for better service Threats 1 Reducing travellers due to economic factor 2 Online ticketing service started by competitors 3 Government regulations that add to operating costs 4 Terrorist threats decreasing willingness to fly 5 Sky rocketing prices of fuel 6 Teleconferencing has reduced business travel 7 Imitating cost reduction methods by competitors 8 Weather Uncertainty 9 Increasing cost of airlines security Total

0.02 0.15 0.01 0.04 0.02 0.05 0.05 0.04 0.05 1.0

2 1 2 1 2 2 1 2 2

0.04 0.15 0.02 0.04 0.04 0.1 0.05 0.08 0.1 2.63

EFE Weighted Score

Grow and Build

IFE Score Strong (3.04.0) I High (3.0 - 4.0) Medium (2.02.99) Average (2.0-2.99) II Weak (1.0-1.99) III

IV
VII

VI

VIII

IX

Low (1.0-1.99)

Recommendations

Mission
Make it more professional

Market Development
India China East Asia

Acquisition, Alliances
AirTran

Penetration
Remote Areas of USA

Diversify Suppliers
Minimize dependency on Boeing only

Focus on Business Travellers Use of Technology