Slide 1 - ZFashion
Presented By:
Kelly Bossolt
Marta Kovorotna
Sarah Smith
Executive Summary
Financial Analysis
External Analysis
Entry & Rivals
Industry
Customers
Substitutes, Complements, Acquisitions
Internal Analysis
Philosophy
Competitive advantage & capabilities
Resources
Recommendations
Financial analysis
Financial analysis
Financial analysis
Financial analysis
External Analysis:
Entry
Deregulation Act
Enabled new entrants
150 went bankrupt
8/11 developed merging agreements
Created competition
Creating lower prices
Creating more travelers
Rivals
Delta, United, American
80% Domestic Market, 67% Trans-Atlantic Market
External Analysis:
Industry
2 nd Tier Providers
Took on the abandoned and ignored markets
Hub – and – Spoke
80% costs were fixed
Control Mechanism
Sublease for premium (18% higher for Southwest)
Efficient
External Analysis:
Customers
“The ones that could afford to fly, and the ones that couldn’t”
Two types of travelers
Convenience, time oriented
Price sensitive, leisure
Two tiered Pricing structure to accommodate both
External Analysis:
Substitutes, Complements
& Acquisition
Substitutes
Train, Bus, Boat, Car, Horse
Complements
Meals, Comfortable seating,
Television
Imitator
JetBlue
Southwest acquired and integrated into its own
Diversified locations
Slightly more sophisticated
Leather Seats, Televisions
Internal Analysis:
Philosophy & Culture
Manage in good times
Secure jobs for the people
Challenged accepted norms
Set competitive thresholds for other airlines to emulate
1972: Chivas Regal
Culture
Southwest Spirit
Positively Outrageous Service
Extroverted personalities
Red hearts and “Luv”
Internal Analysis:
Competitive advantage &
Capabilities
Consistently profitable
Bucked the industry trend by earning profits for 36 consecutive years
Turnaround time
Southwest: 15 min
Industry Average: 45 min
First come first served seating
First to:
Sell seats over the Internet
Ticketless travel
Frequent flyer program based on flights, not miles
Employee profit sharing (owned 10% of company’s stock)
Internal Analysis:
Competitive advantage &
Capabilities
Debt-to Equity ratio much lower than competitors
Ranked first in fewest customer complaints
Recognized as the 5 th most admired company in 2007 by
Fortune Magazine
Top Performing Airline behind Singapore Airlines
Lowest cost per available seat in the industry
Internal Analysis:
Operations
Short-haul
Less than 500 miles
Point-to-point flights
Maximum convenience for passengers flying between two cities
Frowned upon hub-and-spoke
Too time consuming
Well trained employees
University of People
Each Department had own training division that focused on technical aspects of the work
Resources
Herb Kelleher
“A visionary who leads by example- you have to work harder than anyone else to show them you are devoted to the business”
Staff
Fun, outgoing, enthusiastic
Well trained
Consistent revenue
Young aircraft (9 years)
3,300 flights a day
64 cities
Recommendations
Move to international markets
Not limited to Trans-Atlantic, integrate into new markets
Remain fun and efficient
This is one of their strongest competitive advantages
