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Case Study

Case Study. Presented by. Araro Jireh Ary Andana Bambang Wijarnako. The Content. Southwest Airlines at a Glance. What makes SWA Different?. Case Analysis. Recommendation. Southwest Airlines at a Glance. Southwest Airlines at a Glance.

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Case Study

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  1. Case Study Presented by AraroJireh AryAndana BambangWijarnako

  2. The Content Southwest Airlines at a Glance What makes SWA Different? Case Analysis Recommendation

  3. Southwest Airlines at a Glance

  4. Southwest Airlines at a Glance • 1967: Herb Kelleher and Rollin King founded Southwest Airlines • June 18,1971: 1st fly in Texas-Houston, Dallas, San Antonio (“Golden Triangle) with 3 Boeing 737s aircrafts and 25 employees • In 2004, 417 Boeing 737 Jets provide services to 60 airports in 31 states throughout The USA • The nations’ low-fare, high customer satisfaction airline

  5. Southwest Airlines at a Glance • Lowest operating cost structure in the domestic airline industry • Offered the lowest and simplest fare • 31,000 employees (2004) • Total operating revenue US$ 6.5 billion (2004) • Passenger load factor 69.5% (2004) • The most admired airline in the world (Fortune Magazine, 2005), for the 9th in a row

  6. Southwest Airlines at a Glance • Number 5th America’s top ten admired corporation • 100 Best Corporate Citizen (Business Ethics Magazine, 2002-2005) • Leading the industry in customer satisfaction (American Customer Satisfaction Index (ACSI), 2005) • Best customer service, best bonus promotion, best award redemption (Insight Flyer Magazine, 2004)

  7. What Makes SWA Different ?

  8. What makes SWA Different? • Short haul, medium haul, and point to point • No assigned seats • Paid the crew by the trip • Use less congested airport • 60 % revenues generated by online booking • Consistently sought out ways to improve its efficiencies and pass on the cost saving to its passenger

  9. What makes SWA Different? • Reduce the head count per aircraft to 74 from 85 (2003-2004) • Save $455 million from the hedged of 85% fuel and oil • Southwest pilot not belong to national union • 81 % of total workforces are ununionization (2005) • Flexible contract

  10. What makes SWA Different? • Turn around time 20 -25 minutes • Four ground crews plus two at gate • Reinforce the company culture (Hard-work, High Energy, Local Autonomy, and Creativity) through training at University of People, encouragement of inflight contest and recognition of personal initiatives. • Unique hiring process • Implement profit sharing plan for employee

  11. Case Analysis

  12. Southwest Airlines Strategy

  13. The Generic Strategy – Michael Porter SWA

  14. Framework for Strategy Implementation Implementation Mechanism Management Control Organization Structure Human Resources Management Strategy Performance CULTURE

  15. Culture • Clear required Work Ethics ((Hard Work, High Energy, Fun, Local Autonomy and Creativity) • Constantly Reinforce Culture to the employee

  16. Human Resources Development • Pays for Performance • Effective Type of Contract • Employee Involved Hiring Process • Profit Sharing System (ESOP – Employee Stock Ownership Plan)

  17. Organization Structure • Effective Functional Structure

  18. The Conclusion SUPPORT ACTIVITIES COMPETITIVE EFFECTIVE HIGH EFFICIENT ADVANTAGE PERFORMANCE PRIMARY ACTIVITIES

  19. The Recommendation

  20. The Recommendation Ensure the understanding of Company Culture and identify employee needs through Employee Survey /questionnaire. Set the rule and regulation of recruitment to avoid the violation of business conduct. Set the rule and regulation of couple within the organization to avoid conflict of interest.

  21. Thank You

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