2010 Southwest strategic plan

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Universidad Metropolitana
Recinto Bayamon

Southwest Airlines


Strategic Plan

Jose F Rivera

Company Background

Southwest Airlines started operations in 1971 founded by Rolling King and Herb Kelleher. The focus of the new airline was to have price as low as possible and still provide great customer service. Under the direction of President Lamar Muse,the airline launches service between Dallas, Houston and San Antonio.

By 1973, southwest has its first profitable year. In 1974, the airline already had carries the first millionth passengers and spend $ 400 K remodeling the Houston terminal. In 1977 the company listed it stock in the New York Stock Exchange as “LUV”.

During the 1978, Howard Putnam was elected President and Herb Kelleher aspermanent Chairman of The Board. Later in the year it expand services outside Texas and implemented the first self-ticketing machines.

By 1985 the company had expanded services to Chicago and in 1989 they announced the billion dollar revenue mark and became a “Major Airline”

During 1993, Southwest expanded services to the East Coast flying to 50 cities by 1997 reaching 64 cities by 2007.In 1996, south west becomes the largest US airline to offer internet purchasing and in 2000 launched the SWABIZ online portal for corporate customers.

For the year 2003, the airline stop paying commissions to travel agents an un-precedence move to maintain his cost competiveness position.

Another milestone achieve was the acquisition of American Trans Air assets in 2004 and in 2005 beginssharing codes. With this tactical move Southwest re-enter Denver and begin services in Washington Dulles and New York.

In 2007 changes the strategy to provide additional services to corporate account by launching Business Select and expanding his sales force.

In 2010 buys all shares of ATA to become the largest Low Cost Carriers Company
Company Audit and Analysis

Airline IndustryAnalysis
The airline industry exists in an intensely competitive market. In recent years, there has been an industry-wide shakedown, which will have far-reaching effects on the industry's trend towards expanding domestic and international services. In the past, the airline industry was at least partly government owned. This is still true in many countries, but in the U.S. all major airlines have cometo be privately held. [ The Airline Industry Handbook]

Southwest Strategic Analysis
Southwest has being known an “Archetypal No-Frills Airline” launching and implementing unique strategies to remain as “Low Cost Airline”

Southwest Organizational Analysis
Southwest has a Board of directors and a organization to support the company strategies, values
and code of ethics

The Company iscommitted to create an environment of trust and respect for its customers, employees and suppliers. [ southwest.com]

Southwest System Analysis
Southwest utilizes technology in many ways to fulfill its business objectives and maintain efficiency. Southwest believes in systems, it conducts 88% of its business via the internet, and launched SWABIZ. It also have invested million in standardizingairport terminal and operations to introduce the barcode in boarding pass . The company has a information technology workforce of around 900 employees.

An airline with exceptional customer service; call-in, check-in, in-flight services, ticketless travel system. Southwest was the first airline to create its own web page and offer on-line booking.
[source A Strategic Perspective, MukundSrinivasan]

Southwest Productivity Analysis
The Company has scored 37 consecutive profitable years and has become the fourth largest major airline in America flying over 541 airplanes between 69 cities averaging 3,300 flights per day coast to coast

Southwest has leverage very effectively operational and marketing cost by
1) flying one type of aircraft
2) point to point flights
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