SOUTHWEST

AIRLINES
GROUP 1 7ACES
HARVARD BUSINESS SCHOOL
CASE STUDY 21PGP006 Abhilash Gedam
21PGP013 Abhishek Nigam
21PGP017 Aditya Deuri Bharali
21PGP028 Aman Kumar
21PGP039 Anuksha Bhatia
21PGP049 Atal Shanker Mishra
21PGP053 Ayushi Anshu
 “World’s Largest
Unscheduled
Airline.”

Houston Market Hold Yearly Revenue

483 Passengers

Barniff Texas Barniff Texas

$32 Mn

COMPETITORS
14% 11%

5.6 million
EXISTING
86% 89%
$256 Mn Braniff International
Dallas Airways

1.5 million
Texas
Huge
Market
Customer
Dissatisfaction
PSA
Success
International
“We’ve got no hostesses and no
uniforms and no airplanes and
$20 Fare

Break-even
no design and no money.” 39 Passengers
Headquarters in Expanded to Become
Texas National Carrier

Started with Intra- 7th Largest In The

State Operation Country

Budget Airline High Frequency.

Philosophy Low Cost.
Nature of the Legal battle against Braniff
& TI.

marketing Had no money, no uniforms,

no hostesses and they were
problem faced about to have an airline in 120
days.

Problems in regard to capital as the Media campaign were

airline industry was then in a recession. avoided as it might violate
Securities & Exchange
Commission regulations.
Had to raise financial expenses,
recruit several executives, personnel Settled for a breakeven price.
for both flight and ground
operations.
Opportunities Recession helped in purchasing Boeing 737s
at significantly lower prices.

for Southwest High Customer Dissatisfaction.

Airlines Competitors had a dull and conservative

brand image.

The markets were already Spent $10 million in 1967 on its brand
established. image as exciting and glamorous.

Customers growing weary of Young & Vital, Exciting, Friendly,

other interstate carriers. Efficient, and Dynamic.

High Traffic & High Legal battles with Braniff and TI gained
Cancellation. mass media attention
People started avoiding flights.
Factors for Service Provided Punctuality

Selecting an On Board

Airline
Travel Time Flight Frequency

Time of Departure/Arrival Past Experience

Airfares Brand Alternate

Options

Staff Behavior Accessibility

 Porters Generic
Strategies
COST LEADERSHIP STRATEGY
Being the lowest cost producer industry-wide. Deals with
impacting the entire industry.

DIFFERENTIATION STRATEGY
Exploiting products or services which are believed to be
unique.

South West Airlines focused on short-haul point-
to-point flights in contrast to hub-and-spoke
model of mainstream carriers.
Hence, attracting a niche crowd that was under-
served by other companies but was also cost-
sensitive adopting the Focus Strategy.
FOCUS STRATEGY
Focussing on one or a few segments of the market only.
This is to narrow the focus and go for niche markets. This
is appropriate where there are distinct groups with
specialised needs.
STUCK IN THE MIDDLE
When firm does not offer features that are unique enough
to convince customers to buy its offerings, and its prices
are too high.
Strategic COST
Implications of LEADERSHIP
STRATEGY
Southwest Airlines
COST LEADERSHIP STRATEGY DIFFEREN-
As a company that was just starting operations, SWA would
have run into insurmountable losses had they opted for this TIATION
strategy. Competing with heavyweights like Pan-Am, Delta and
Braniff, amongst others, to bring about an industry-wide STRATEGY
change would have been near impossible due to their budget
constraints.

DIFFERENTIATION STRATEGY
SWA was trying to attract a differentiation strategy by
promoting point-to-point travel, it had to opt for a cost-
FOCUS
sensitive plan as it did not have the finances to overcome the
behemoths like Braniff and Texas International that were flying
STRATEGY
in the same regions.
Positioning of Less swift turnaround

Southwest time.

Airlines
Right recruitment policies.

Less Price. More

Rewards.

Only one type of Out of the box thinking and

aircraft. innovation.
 As the link between brand identity and brand
image, positioning is crucial

Relevance of Using positioning to gain a competitive edge

Positioning in
Market Differentiation through Positioning -
Marketing Positioning separates yourself from the crowd

Customers may easily buy because of

positioning.
KEY
TAKEAWAYS
Did market research and Identified the
problems

Customer oriented
NU CU
M LT
BE UR
RS E
CULTURE SCHEDULING
Used law suit as a medium to gain
SCHEDULING STRATEGY
publicity
STRATEGY NUMBERS

Southwest Other Refined marketing strategies

Airlines Airlines