Description
Google
1) a) What are the various directions for innovation to take?
b) Can a mature firm in a stagnant industry pursue innovation?
c) How successful is this likely to be?
2) Potential limits to Google’s stellar growth. Yahoo, a one time internet
darling, is almost in
oblivion.
a) What are some serious obstacles/threats Google faces in its drive for
continued great
growth?
b) How might you suggest Google preemptively overcome those
obstacles/threats?
3) Google is also known for trend bucking work climates—colorful
offices, bikes, and gourmet
foods at the “campus,” on-stie laundry etc.
a) Do you see any downside to these amenities? Why don’t all the companies
adopt such
workplace perks?
b) How much would this type of perk be a factor in your decision to work for a
company,
even for a lesser pay?
4) Google was among the first to disrupt the advertising industry.
a) What is targeted advertising
b) How is targeted advertising revolutionizing the advertising industry?
c) How is this affecting advertising in traditional media such as TV, radio, and
print?
d) Is targeted advertising desirable for all firms?
SOUTHWEST
AIRLINES SUCCESS
IS FINALLY
CONTESTED
Name:
Date:
2
OUTLINE
1. Background
7. Marketing strategies
2. Achievements
8. SWOT analysis
3. Timeline
9. Customer satisfaction rates
4. Protagonist
10. Facts
5. Adverts
11. Questions
6. Growth
12. US domestic airlines market share
3
BACKGROUND
•
•
•
•
•
Company Name: Southwest Airlines Co.
Founders: Rollin King and Herb Kelleher
Year Established: 1967
CEO: Gary Kelly
Headquarters: Dallas, Texas, United
States
• 2019 Profit: $2.3 Billion
• Type: Public Company
(Southwest, 2022)
4
ACHIEVEMENTS
• 2003 – Airline for the year
• 2007 – Top 100 most innovative
technological firms
• 2008 – Ranked first in customer service
• 2019 – Won 8 awards
• Best company for diversity
• Best company for women
• Best company happiness
• Best company culture
• Best leadership teams
• Best diversity CEOs
• Best outlook company
(Southwest, 2022)
5
TIMELINE
1967
Founded
1975
Went Public
1978
Fired Lamar Muse and
Appointed Kelleher
1986
Purchase Muse Corp
6
TIMELINE
1993
Expanded to 34 Cities
in 15 States
1997
Developed New
Geographical Markets
2001
Herb Retired and
Replaced with James
Parker
2008
Started Experiencing
Negligence Claims
under the New CEO,
Gary Kelly
7
THE PROTAGONISTS
8
HERB KELLEHER: CEO (1978 – 2001)
• Always encouraged the employees to be themselves
• An incredible listener
• Motivated its workforce towards high commitment levels
• He was genuinely interested in people
• Established hiring based on attitude than skills
• Established a collaborative and empowering culture
9
ADVERT
10
NEW ADVERT
11
GROWTH OF SOUTHWEST AIRLINES
12
MARKETING STRATEGIES?
• Southwest Airlines executed a low
cost marketing strategy
• The airline identified a niche market
in the short-haul airline business
• Had many airlines thereby providing
efficient services
• Disrupted the road transport industry
through low prices
13
COMPETITIVE ADVANTAGE
• Service quality
• Employee wellbeing
• Few employee complaints
• Ticketless travel
• More acquisitions
• Seven flights per day (twice than
the normal industry average)
• Low pricing
SWOT
•
•
•
•
•
•
•
•
•
•
Strengths
Warm corporate culture for employees and clients
Lower cost strategy
Ranked as one of the best employers
Consistent profitability for more than 45 years
Valuable brand name
Operating on single aircraft; Boeing 737s
Effective short-haul services
High capacity for more clients
Market hare dominance
Effective management
(Statista, 2021)
14
SWOT
Weaknesses
•
•
•
•
•
Less diversified since it depends on a single
source of revenue
Dependence on the US market
Overreliance on the Boeing 737s
Single supply chain by relying on the
Boing company
Limited passenger amenities
(Statista, 2021)
15
SWOT
Opportunities
•
•
•
•
•
Global expansion
Enhanced booking experience
New technological inventions like mobile transactions
Expanding towards the freight business
Offer long-haul travels
(Statista, 2021)
16
SWOT
Threats
•
•
•
•
•
•
•
Global recession
Issues with Boeing 737s
Negative publicity
Stiff competition from other market players
Increased fuel prices
Terrorism attacks
Strict regulations
(Statista, 2021)
17
CUSTOMER SATISFACTION RATES
18
FACTS
•
•
Annual operating financial statistics 2021
•
•
•
•
Fleet
$ 2.3 billion net income
$134.1 million revenue from passengers
83.5% load factor
$ 22.4 billion annual total operating revenue
Type
Number
Seats
737 – 700
506
143
737 – 800
207
175
737 – Max 8
34
175
19
20
QUESTIONS
1. In what ways might airline customers be segmented (what “bases of
segmentation” to be used)? Which niches or segments would you
consider Southwest’s prime targets? Which segments probably will not
be?
2. A price cut can easily be matched by a competitor and a price war
usually leaves the competitors worse off. Identify any circumstances
where you see it desirable to initiate a price cut or feel you don’t need
to match a competitor’s price (in the context of the airline industry).
3. Comment on how Herb Kelleher personality has contributed to
Southwest’s success during his tenure. Do you think the bar was raised
so high by Herb that succeeding CEOs potentially could be less
effective in sustaining growth?
4. How can Southwest be relevant in a market with newly entered lowcost airlines (such as Spirit, Frontier etc.).
QUESTION 1
•
•
•
•
•
Can be segmented based on customer attractiveness to
leisure
Involves the demographic, psychographic and behavioral
segmentation
Demographic
• Target individuals who frequently travel short-haul
distances
Psychographic
• Client interests and desires for first class, and economy
seating arrangements
Behavioral
• Customers who get attracted to loyalty benefits and
quality services
(Avram, 2019)
21
QUESTION 1
▪
▪
The airline’s prime niches include
▪
Short-haul travelers
▪
Customers who embrace low costs
▪
Business men and women who operate between
cities
▪
Dissatisfied customers from full service airlines
▪
Frequent flyers
The airlines non-probable segments
▪
Long-haul travelers
▪
Executive travelers
(CAPA, 2019)
22
QUESTION 2
(MauiNow, 2019)
23
QUESTION 3
•
•
Herb Kelleher remains one of the world’s best CEO’s
during his time
he contributed to Southwest Airlines success through
•
•
•
•
•
Developing a close relationship with his employees
Establishing low fares
Achieving low costs through minimizing services by
only having one type of airline; Boeing 737
Created an employee-centric
establishing loyalty
company
thereby
Being decisive in potential strategic market windows
(Hartley, 2009)
24
QUESTION 4
•
•
Southwest Airlines is currently facing high threat of new market
entrants like Frontier and Spirit airlines.
The company should:
•
•
•
•
•
Monitor the marketing strategies of these airlines
Establish more bonuses to enhance customer loyalties
Maintain their low costs
Introduce new seating arrangements to cater for the executive
passengers
Seek for mergers and acquisitions
(Chokshi, 2022)
25
US DOMESTIC AIRLINES MARKET SHARE
(Statista, 2021)
26
•
•
•
•
•
•
•
REFERENCES
Avram, B. (2019). Airlines Customer Segmentation in the Hyper-Competition Era. Expert Journal of
Marketing, 7(2).
CAPA. (2019). Aviation Analysis | CAPA. Centreforaviation.com.
Chokshi, N. (2022, February 7). Frontier and Spirit Airlines Plan to Merge. The New York Times.
Hartley, R. F. (2009). Marketing mistakes and successes. Wiley.
MauiNow. (2019). Price Comparison: Southwest Airlines Hawai‘i Ticket Prices vs. Competitors | Maui Now.
MauiNow.
Southwest. (2022). About Southwest – Southwest Airlines. Southwest.com.
Statista. (2021). Statista – The Statistics Portal. Statista; Statista.
27
THANK YOU!
28
Purchase answer to see full
attachment