Guide Questions:

1. Why has Southwest been so much more successful than its competitors? What was its strategy?
How did its strategy enable it to generate breakthrough growth and profits in one of the worst
performing industries in the U.S.?
Note: Southwest is the only major U.S. carrier to be profitable every year for the last 38 years, while the
U.S. airline industry lost $32.3 billion in 2001 - 200 alone. The biggest companies, United, Delta,
Northwest, US Airways have operated under bankruptcy protection, have merged or are merging.

2. What did it take to execute this strategy successfully? What are Southwest's greatest source/s of
competitive advantage? How sustain these?

3. How has the original strategy been altered in recent years? How if at all, have these changes
affected Southwest's key success factors?

4. Would you recommend that Southwest Airlines acquire the gates and slots available at La Guardia?
Why or why not?

5. What might we as development managers learn about strategy from Southwest Airlines?
Session 4: Review ASA Case (page 1 to 6, 11 to 24) and discuss the Part II questions given out for
Sessions 1 and 2 for ASA.

1. Focusing on the ASA's Microcredit Phase, how well has ASA performed?

2. What was ASA's strategy/what strategic choices did ASA make? How may these choices explain its
performance? What other factors (if any) may have affected ASA's performance

3. What did it take to execute/carry out this strategy successfully?

4. Compare and contrast Southwest's and ASA's strategies. What might we as development managers
learn about strategy from these two cases?
NOTE: We will not discuss the Southwest and LAN case.
Thank you.






Session 3: Read and Analyze Southwest Airlines: In a Different World
Guide Questions:

Why has Southwest been so much more successful than its
competitors? What was its strategy? How did its strategy
enable it to generate breakthrough growth and profits in one
of the worst performing industries in the U.S.?
Note: Southwest is the only major U.S. carrier to be
profitable every year for the last 38 years, while the U.S.
airline industry lost $32.3 billion in 2001 - 200 alone. The
biggest companies, United, Delta, Northwest, US Airways
have operated under bankruptcy protection, have merged or
are merging.
Strategy was low fares - charge fares at all times that were below the cost of driving
an automobile rom one city to the next competition is driving a car.
Point to point flights

Servants heart and FunLUVing culture rallying mission

Operational
Used the same type of airline model, became Boeings best customer by having
537 of boeings 737s
Quick turnaround time = target 10 minutes
No food on 90 minutes or less flights
No assigned seats or cabin class
Operate from less congested airports
Human Resources
Hire fun people, encouraged silliness
Develop fun culture and practices like culture committee
Encourages self funded projects
Ownership feeling through stock share options
Heavily unionized but employees can take on additional roles when needed
Succession planning for executives
Controlled Growth
Compounded growth for 20 years, controlled in late 90s
Awards
Triple crown from 1992-1996 highest levels of customer service, on time arrival,
lowest level of lost baggage.
Specially painted airplane with names of all employees on overhead bins
What did it take to execute this strategy successfully? What
are Southwest's greatest source/s of competitive
advantage? How sustain these?
How has the original strategy been altered in recent years?
How if at all, have these changes affected Southwest's key
success factors?
9-11 incident = no laid off employee, additional security
Other airlines adapted the model = softer demand
Online shopping for fares = eating on niche

Transform business model and expand revenue generating capabilities
- Adding flights with more than 3 hours length without food, put fun
activities
- Adding schedules were discussed and deliberated with personnel
involved. Cross assignments for consistency of culture
- Code sharing with other similarly cultured airlines
- Developing new technologies e.g., enabling code sharing
- Boarding process select seats
- Business select program for business flyers
- Early bird rates
- No fees for changing tickets
- Hedging fuel
What might we as development managers learn about
strategy from Southwest Airlines?
Focus on the customer and specific strategy targets
Execute with people as resources in mind.
Focus on the main product do not get lost in the noise
No need to copy from others. Be original


Session 4: Review ASA Case (page 1 to 6, 11 to 24) and discuss the Part II questions given out for
Sessions 1 and 2 for ASA.

1. Focusing on the ASA's Microcredit Phase, how well has ASA performed?

2. What was ASA's strategy/what strategic choices did ASA make? How may these choices explain its
performance? What other factors (if any) may have affected ASA's performance

3. What did it take to execute/carry out this strategy successfully?