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Culture, Value, and Operating Practices Barry Cynthia Dedy Fitrie Indah Made Novita Rival Presented by : MBM Group 3
Company Overview... ,[object Object],[object Object],[object Object],[object Object],[object Object],Southwest Airlines , Inc. (NYSE: LUV), is . . .  The  third-largest airline in the world  by number of passengers carried and the  largest in the United States  by number of passengers carried domestically.  Dallas, Texas Headquarters  63 Destination 472 Fleet size  1971 Founded
Birth of Southwest ... ,[object Object],[object Object],In late 1966,  Rollin King  and  Herb Kelleher  got together and decided to start a different kind of airline Southwest was incorporated in Texas and commenced Customer Service on June 18, 1971 with three Boeing 737 aircraft serving three Texas cities - Dallas, Houston, and San Antonio.  Attract passengers by flying convenient schedules, get passenger  to their destination on time, make sure they have a good experience, and charge fares competitive with travel by automobile
Company History ... Southwest goes public on the American Stock Exchange 1975 Company is renamed Southwest Airlines Co.  1976 Shares migrate to the New York Stock Exchange 1977 Herb Kelleher becomes Southwest's outspoken new chairman 1978 SWA flies outside Texas to New Orleans 1979 SWA posts first profit and begins RUSH cargo service 1973 Airline launches first route, connecting Dallas, Houston, and San Antonio 1971 Company is incorporated as Air Southwest Co.  1967
Company History ... Morris Air and Arizona One are acquired 1994 Online booking site is launched 1996 SWABIZ corporate booking tool is introduced 2000 SWA enters first ever code share arrangement, with ATA Airlines 2005 Revenues exceed $1 billion, making SWA a major airline 1990 SWA begins flights to West Coast 1982 Kelleher is named company president and CEO 1981
VISION & mission ... ,[object Object],Dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit  Our Mission provide safe and comfortable air transportation in commuter and short-haul markets, from close-in airports, at prices competitive with automobiles and buses and to involve customers and employees in the product and the process, making the airline a fun, profitable and quality experience.
Company Values ... Core  Values ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Company Culture ... ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Business Description ... ,[object Object],[object Object],[object Object],[object Object],Product/Services ,[object Object],[object Object]
Business Description ... ,[object Object],[object Object],[object Object],  San Antonio Orlando Manchester Houston (Hobby) Cleveland   Salt Lake City Orange County Lubbock Hartford/Springfield Chicago (Midway)   St. Louis Ontario Louisville Harlingen/South Padre Island Burbank West Palm Beach Sacramento Omaha Los Angeles (LAX) Ft. Myers/Naples Buffalo Tulsa Reno Oklahoma City Little Rock Ft. Lauderdale/Hollywood Boise Tucson Raleigh-Durham Oakland Las Vegas El Paso Birmingham Tampa Providence North Virginia (Dulles) Kansas City Detroit (Metro) Baltimore/Washington Spokane Portland Norfolk Jacksonville Denver Austin Seattle/Tacoma Pittsburgh New Orleans Jackson Dallas (Love Field) Amarillo San Jose Phoenix Nashville Long Island Corpus Christi Albuquerque San Diego Philadelphia Midland/Odessa Indianapolis Columbus Albany
Business Description ... ,[object Object]
Building  Capable Organization ... Staffing the Organization Core Competencies and  Competitive Capabilities Matching the Organization  Structure to Strategy Southwest ’ s Capability
Staffing ... ,[object Object],[object Object],[object Object],[object Object],Recruiting, Screening, and Hiring ,[object Object],[object Object],[object Object],Putting Together a Strong Management Team
Core Competencies & Competitive Capabilities ... ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Low Operating Cost
Core Competencies & Competitive Capabilities ... ,[object Object],[object Object],[object Object],[object Object],Focus on Customer & Customer Satisfaction
Core Competencies & Competitive Capabilities ... ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Core Competencies & Competitive Capabilities ... ,[object Object],[object Object],[object Object],[object Object],[object Object],Training and retraining employees as needed to maintain skill-based competencies
Matching the Organization structure... ,[object Object],Designing an organization structure that facilitates good strategy execution ,[object Object],[object Object],[object Object],[object Object],[object Object],Deciding how much decision making authority to push down to lower-level managers and front line employees
SWOT Analysis ... ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Five Forces Analysis ... Rivalry  among Competitor (High) Substitute Products (train, bus) Customers Potential New Entrants Suppliers (fuel, snacks,  beverages) Low Low Supplier’s bargaining power LOW Customer’s bargaining power MEDIUM
Market Share ... Year 2006  :  Market Share
Financial Performance... Financial Summary 0.67 0.31 0.56 0.40 0.70 EPS 511 241 442 313 548 Net Income 631 417 483 554 820 Operating Income 4,924 5,105 5,454 5,976 6,764 Operating Expenses 5,555 5,522 5,937 6,530 7,584 Revenues 2005 2004 2003 2002 2001   (In millions, except EPS)
Financial Performance... Stock Chart
9/11 Black September ... ,[object Object],[object Object],[object Object],[object Object]
9/11 Impacts ... Many scrambled to institute a host of security measures Many scrambled to institute a host of security measures Fare sales in January, March, April, July, August, October and December 2002 Speculation on how much to cut fares to induce passenger to fly and on low long traffic might stay depressed Negotiated a revised delivery schedule for the 132 Boeing 737 jets on order The delivery of new aircraft on order deferred or cancelled no employees were laid off Temporary freeze on hiring until Jan 2002 Employees laid off No flights were cut The number of flights were cut by around 20 percent Southwest Airlines Airline Industry
Conclusion ... ,[object Object],[object Object],[object Object],[object Object]
Future Improvements ... ,[object Object],[object Object],[object Object]
Key People of SWA...
By: Barry, Cynthia, Dedy, Fitrie,  Indah, Made, Novita, Rival Thanks … Dedicated to the fallen victims of 9/11, 5 years ago September 11, 2006

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Southwest Airlines

  • 1. Culture, Value, and Operating Practices Barry Cynthia Dedy Fitrie Indah Made Novita Rival Presented by : MBM Group 3
  • 2.
  • 3.
  • 4. Company History ... Southwest goes public on the American Stock Exchange 1975 Company is renamed Southwest Airlines Co. 1976 Shares migrate to the New York Stock Exchange 1977 Herb Kelleher becomes Southwest's outspoken new chairman 1978 SWA flies outside Texas to New Orleans 1979 SWA posts first profit and begins RUSH cargo service 1973 Airline launches first route, connecting Dallas, Houston, and San Antonio 1971 Company is incorporated as Air Southwest Co. 1967
  • 5. Company History ... Morris Air and Arizona One are acquired 1994 Online booking site is launched 1996 SWABIZ corporate booking tool is introduced 2000 SWA enters first ever code share arrangement, with ATA Airlines 2005 Revenues exceed $1 billion, making SWA a major airline 1990 SWA begins flights to West Coast 1982 Kelleher is named company president and CEO 1981
  • 6.
  • 7.
  • 8.
  • 9.
  • 10.
  • 11.
  • 12. Building Capable Organization ... Staffing the Organization Core Competencies and Competitive Capabilities Matching the Organization Structure to Strategy Southwest ’ s Capability
  • 13.
  • 14.
  • 15.
  • 16.
  • 17.
  • 18.
  • 19.
  • 20. Five Forces Analysis ... Rivalry among Competitor (High) Substitute Products (train, bus) Customers Potential New Entrants Suppliers (fuel, snacks, beverages) Low Low Supplier’s bargaining power LOW Customer’s bargaining power MEDIUM
  • 21. Market Share ... Year 2006 : Market Share
  • 22. Financial Performance... Financial Summary 0.67 0.31 0.56 0.40 0.70 EPS 511 241 442 313 548 Net Income 631 417 483 554 820 Operating Income 4,924 5,105 5,454 5,976 6,764 Operating Expenses 5,555 5,522 5,937 6,530 7,584 Revenues 2005 2004 2003 2002 2001   (In millions, except EPS)
  • 24.
  • 25. 9/11 Impacts ... Many scrambled to institute a host of security measures Many scrambled to institute a host of security measures Fare sales in January, March, April, July, August, October and December 2002 Speculation on how much to cut fares to induce passenger to fly and on low long traffic might stay depressed Negotiated a revised delivery schedule for the 132 Boeing 737 jets on order The delivery of new aircraft on order deferred or cancelled no employees were laid off Temporary freeze on hiring until Jan 2002 Employees laid off No flights were cut The number of flights were cut by around 20 percent Southwest Airlines Airline Industry
  • 26.
  • 27.
  • 28. Key People of SWA...
  • 29. By: Barry, Cynthia, Dedy, Fitrie, Indah, Made, Novita, Rival Thanks … Dedicated to the fallen victims of 9/11, 5 years ago September 11, 2006