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
a) What are some serious obstacles/threats Google faces in its drive for
b) How might you suggest Google preemptively overcome those
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
b) How much would this type of perk be a factor in your decision to work for a
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
d) Is targeted advertising desirable for all firms?
7. Marketing strategies
8. SWOT analysis
9. Customer satisfaction rates
12. US domestic airlines market share
Company Name: Southwest Airlines Co.
Founders: Rollin King and Herb Kelleher
Year Established: 1967
CEO: Gary Kelly
Headquarters: Dallas, Texas, United
• 2019 Profit: $2.3 Billion
• Type: Public Company
• 2003 – Airline for the year
• 2007 – Top 100 most innovative
• 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
Fired Lamar Muse and
Purchase Muse Corp
Expanded to 34 Cities
in 15 States
Herb Retired and
Replaced with James
under the New CEO,
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
GROWTH OF SOUTHWEST AIRLINES
• 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
• Disrupted the road transport industry
through low prices
• Service quality
• Employee wellbeing
• Few employee complaints
• Ticketless travel
• More acquisitions
• Seven flights per day (twice than
the normal industry average)
• Low pricing
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
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
Limited passenger amenities
Enhanced booking experience
New technological inventions like mobile transactions
Expanding towards the freight business
Offer long-haul travels
Issues with Boeing 737s
Stiff competition from other market players
Increased fuel prices
CUSTOMER SATISFACTION RATES
Annual operating financial statistics 2021
$ 2.3 billion net income
$134.1 million revenue from passengers
83.5% load factor
$ 22.4 billion annual total operating revenue
737 – 700
737 – 800
737 – Max 8
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
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.).
Can be segmented based on customer attractiveness to
Involves the demographic, psychographic and behavioral
• Target individuals who frequently travel short-haul
• Client interests and desires for first class, and economy
• Customers who get attracted to loyalty benefits and
The airline’s prime niches include
Customers who embrace low costs
Business men and women who operate between
Dissatisfied customers from full service airlines
The airlines non-probable segments
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
Being decisive in potential strategic market windows
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
Seek for mergers and acquisitions
US DOMESTIC AIRLINES MARKET SHARE
Avram, B. (2019). Airlines Customer Segmentation in the Hyper-Competition Era. Expert Journal of
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.
Southwest. (2022). About Southwest – Southwest Airlines. Southwest.com.
Statista. (2021). Statista – The Statistics Portal. Statista; Statista.
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