Southwest

December 7, 2012 Company History: In 1966, Rollin King and Herb Kelleher founded Southwest Airlines. It has grown from a small Texan airline with$20 one-way fares to fly the golden to triangle to now being one of the largest airlines in the U.S. despite only flying domestically. At first Southwest struggled to gain a market foothold by scrambling to find financial resources and also dealing with multiple legal hurdles put into play by other airlines. Regardless, Southwest was able to overcome these hardships by staying committed to success with their “can-do” attitude and utilizing both special marketing and operating strategies. Some of these strategies included having flight hostesses dress in attention grabbing outfits, giving free alcoholic beverages during daytime flights, and utilizing the marketability of the word “love” and even making LUV their official stock-trading symbol later. Southwest was also able to figure out a system in which they had the shortest turn around time compared to all other airlines and by identifying their key target market, Lamar Muse, Southwest’s CEO at the time, developed a two-tier on-peak/offpeak pricing structure which soon became standard across the whole airline industry. In 2010, Southwest Airlines is the market share leader in domestic air travel in the United States. Southwest has been consistently profitable since 1973, and since 2000, Southwest has had an increase of passengers by 28 million while passenger traffic on domestic routes had declined at competition carriers. Southwest’s success is due to its competitive strategy to be the best-cost provider among domestic airlines in which most credit goes to Herb Kelleher, who created a company culture strongly supportive of Southwest’s low-cost provider strategy. SWOT Analysis: Strengths: -­‐ Creating the Southwest Effect and being the industry’s low-cost provider and leader of enplaned passengers – Although Southwest may have low-fares, it is by far the industry leader...