Southwest Airlines

Team Members :Krystal Brown, Jasmine Cooley, Aretas Coleman, Jeremy Lewis, Terry Kerr

#overview#Organization History and Life CycleExternal EnvironmentMission, Goals, and StrategiesOrganizational Culture and ManagementInterorganizational Relationships

HistoryAs company legend goes, the very first route map was drawn on a cocktail napkin during a meeting between Rollin King and Herb Kelleher.

1967: Air Southwest Co. is incorporated; later in 1971 the company name was changed to Southwest Airlines Co.

Rollin King and Herb Kelleher founded Southwest Airlines with one simple goal: To serve Dallas, Houston, and San Antonio with point-to-point flights.

HistoryHerb Kelleher, Attorney at Law (Co-founder)

1967: Files application with TAC to serve DAL, IAH, & SAT.

Rival companies Braniff and Texas International serve the same areas; hence, they fought through the legal system to keep Air Southwest grounded.

Herb offers to represent Air Southwests appeal to the Texas Supreme Court. He charged no fees and paid any costs out of pocket.

1970: Texas Supreme Court overturns lowers court ruling and clears Air Southwest for take-off.

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historyLamar Muse: Joins Air Southwest in 1971 as President.

Sells promissory notes to raise $1.25M in funds for aircraft and startup costs

Makes agreement with Boeing to purchase three Boeing 737s (with Boeing holding 90% of the financing)

Hires The Over the Hill Gang (Dick Elliot, Jack Vidal, Donald Ogden, Bill Franklin)

Made initial public offering of stock (raising $6.5M in funds)

June 18, 1970: The Love Airline is born; starting service to DAL, IAH, & SAT.

history1975: LUV made ticker symbol on American Stock Exchange

1976: Southwest Airlines expands service to 5 new cities in one year.

1978: Southwest Airlines purchases Midway Airline as a wholly owned subsidiary and enters the Northeast U.S. market

1978: Muse resigns as President; Herb is asked to step in as Interim President, CEO, & COB.

1981: Herb Kelleher assumes the permanent position of President and CEO

HISTORYHerb Kelleher served Southwest Airlines from 1967-2007

Profitable for 37 years

Largest U.S. based airline (by passengers)

547 Aircraft (Boeing 737)

3400 Flights A Day

One of first airlines to have a website

First airline to offer automated ticket services

Southwest Effect- term coined by the Department of Transportation

#Life cycle

#External Environment#Simple + StableLow UncertaintyComplex + StableLow Moderate UncertaintySmall number of external elements, and elements are similar.Elements remain the same or change slowly.Large number of external elements, and elements are dissimilar.Elements remain the same or change slowly.

Simple + UnstableHigh-Moderate UncertaintyComplex + UnstableHigh UncertaintySmall number of external elements, and elements are similar.Elements change frequently and unpredictably.Large number of external elements, and elements are dissimilar.Elements change frequently and unpredictably.UncertaintyExternal EnvironmentAir- Traffic Controller shortageCompetition Fuel PricesAir traffic disastersDecline in customer demandsEconomic downfall

#Complex + UnstableHigh UncertaintyLarge number of external elements, and elements are dissimilar.Elements change frequently and unpredictably.

External EnvironmentExternal SWOT AnalysisOpportunitiesThreatsFalling interest ratesNew technologies increasing efficientLimited substitute productsHigh entry barriersBargaining power with BoeingDeclining fuel pricesReceptive business travelerUnderserved marketsUncertainty in fuel pricesIncreased airport securityWeatherStrong power of buyersSubstitute products in short-haul marketsIntense competitionNew Northwest/Delta merger (increasedcompetition)Labor union demands#External EnvironmentPorters 5 ForcesThreat of New Entrants (L)Capital IntenseGovernment RegulationsExcess to distribution channelsEconomies to scale

Power of Buyers (H)Switching costDifferentiation of products Information available

#External EnvironmentPorters 5 Forces Cont.Power of Suppliers(H)Switching costsSubstitutes Difference between Products

Threat of Substitutes(M)Rental Car ServicesRailBusShip#External EnviornmentPorters 5 Forces Cont.Rivalry of Existing Firms (H)MergersCompetition#MissionThe mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride , and Company spirit.To Employees:Weare committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer#GoalsLow cost leadershipHigh customer service#StrategiesLow cost Leadership#Chart on pg 73http://www.nytimes.com/2010/11/21/business/21south.htmlhttp://www.bloomberg.com/news/2010-09-27/southwest-airlines-agrees-to-buy-airtran-for-1-4-billion-in-cash-shares.htmlStrategiesDefender strategy##strategiesInternal process approach

##Culture#Culture#

Culture#

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Management#Management##Interorganizational RelationshipsPopulation Ecology#Resource DependencePopulation EcologyCollaboration NetworkInstitutionalismOrganization RelationshipsOrganization TypeCooperative

CompetitiveDissimilarSimilarPopulation Ecology##Interorganizational Relationships Interorganizatl Re###