Introduction of Southwest Airline
1.1 Background of Southwest
There is a very famous story about Southwest airline. According to this story King explain his idea, the concept of the airline, to Kelleher during dinner. He drawn a triangle on a paper napkin. The triangle shows three cities, and three routes, Dallas, Houston and San Antonio. Rolling King and Herb Kelleher started their airline in March 15, 1967 and named it air Southwest. Unfortunately for them, the airliner could fly in that time due to a joint lawsuit. The lawsuit was done by 5 big airliners of that time, Braniff, Aloha Airlines, United Airlines, Trans-Texas, and Continental Airlines. After three years of legal fight, the lawsuit was lifted and the airliner was ready to go with a change in the name from air Southwest to Southwest airline.
Southwest founders principals was straight forward and simple; "If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline".
This is possible with concentrating on the correct strategy for the company. Southwest noticed the potential customers for air travel are common people and air travel is not only for elite customers. Their operational strategy benefited a lot by this understanding of customer choices in airline industry is primarily driven by price.
We need to consider company principles and generic strategies to find out what is their strategy and how do they implement it. To achieve lowest possible fares price, the company need to use cost leadership strategy. This strategy empower the firm to gain market share of price-conscious customers. Cost leadership is about having the lowest price in the market or having the lowest...