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Taking A Look At Southwest Airlines

884 Words4 Pages

Operational Overview Southwest Airlines has illustrated resilience in growth over the past 40 years of operations by utilization of cost leadership and differentiation strategies to lure customers and enhance customer loyalty levels. By providing passengers with efficient customer service, low costs, and a point-to-point operational strategy, the entity has been successful in sustaining considerable growth rates. The entity has been known to focus on routes that have relatively high demand, while the extensive experience of its personnel provides the entity with an added advantage for quick turnaround for optimized return on investments. The entity has been able to position itself by focusing primarily on providing the consumers with friendly …show more content…

Southwest Airlines is currently the largest airline in the United States in terms of passenger traffic handled on an annual basis. The use of a point-to-point cost structure enables the entity to eliminate costs of operating hubs, which usually affect airlines in a negative manner. The ability to keep the costs of operation relatively low has been termed as one of the primary factors that have contributed towards the significant growth illustrated by the airline. As in the year 2006, the entity had a market capitalization of an estimated $16 billion, which has grown to an estimated $27 billion in 2015. The significant growth has been amidst the presence of challenges in the struggling industry. The entity has been able to accrue a significant market share, whereas legacy carriers continue to struggle within a depressed market environment (Gittell, …show more content…

With the presence of emergent technologies such as electric vehicles, which are relatively cost effective for long distance travel, the aviation industry will continue to experience depressed market conditions. In addition, the use of electric trains, especially in modern cities provides consumers with another cheap alternative that can be used for both long and short distance travel. It is also important to note that the entity anticipates competition from legacy carriers, which will presumably utilize similar strategies to enhance efficiency and customer satisfaction levels in one of the most sensitive industries in the world. The quality of services is considered one of the most important factors that customers use as a basis in making purchase decisions when provided with various carrier

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