Summary of the Case Study & Southwest Airlines Growth Matrix (Case Study Sample)

Southwest Airlines
Student’s Name
Institutional Affiliation
Southwest Airlines
Question 1: Summary of the Case Study & Southwest Airlines Growth Matrix
The case study focuses on the US airline industry altered in 1978 when the president signed the Airline Deregulation Act. Before the signing of the Deregulation Act, the entry and exit routes, fares, M&A, and rates of returns of airlines in the US were regulated by the Civil Aeronautics Board. Deregulation act allowed many airlines to enter into the US airline industry. The case study shows that the Deregulation Act lowered the industry's fare and increased completion (Ethiraj & Zhou, 2019). However, the Deregulation Act created a regional disparity of airline tickets, which affected remote and small communities. Besides, the industry workers suffered after their wage rate was adjusted from $42,928 to low levels. More than 20,000 employees in the airline industry were laid off.
By 2010, major airlines in the US were on track and began to make profits apart from Southwest Airlines. The continued consolidation of the airline industry led to low operational costs and high prices of tickets. Southwest Airlines was the only large airline in the US that operated without big hubs. In 2010, Southwest Airlines could have 212 flights daily. The case study shows that the choice of market for Southwest Airlines led to significant growth in the air industry (Ethiraj & Zhou, 2019). The growth of Southwest Airlines was contributed by the service changes made in 2007 and 2008 during the recession.
Southwest Airlines through Product/Growth Matrix
Market Penetration
The strategic objective in market penetration of Southwest Airlines is to grow its revenues by providing air transport services to more customers (Leonard, 2019). The company offers low-cost services that create competitive advantages to ensure it has a large share in the air industry.
Product Development
The company focused on improving its products and services as the main strategy of getting more customers. For instance, in 2007-2008, the company added new fare categories for travelers, revamped gate areas to include television, new tables, seats, power ports, and promoted two bags fly free and frequent flyer program (Ethiraj & Zhou, 2019).
Market Development
The growth of Southwest Airlines depended on market development. The company used a cost-leaderships strategy to increase its competitiveness in the industry (Leonard, 2019).
Diversification
The company diversified its operations by starting new operations in small and remote communities. The company offered point-to-point services that improved customers' convenience.
Question 2: Southwest Airlines Marketing Mix Strategies
Product
The marketing mix strategy of Southwest Airlines is analyzed on the basis of product, price, place, and promotion. Southwest Airlines offered products that would promote convenience to travelers. After signing a deal with Galileo, the company used reservations systems, revamped its facilities such as power ports, tables, and chairs to increase convenience.
Place
Southwest Company was the only big airline company that operated without major hubs. The company started its operations with domestic flights before getting into the international arena (Leonard, 2019). Currently, Southwest Airlines travels to 411-states with 101 destinations such as Las Vegas, Orlando, Denver, and Dallas.
Promotion
Southwest Airlines participated in marketing campaigns to create a positive brand in the airline market. As a marketing promotion, Southwest Airlines promoted the two-bag fly free campaign that no other airline offered in 2010.
Price
Pricing was the positioning strategy used by Southwest Airlines to attract more passengers. The company developed a two-tier pricing structure, whereby, it charged $20 for flights between Houston, Dallas, and San Antonio, while other airlines charge $28. It offered seats at $26 on weekends until 7 pm, and $13 on weekends. Besides, it offers passengers to pay $26 and $13 and a free bottle of liquor. Southwest Airlines offered low fares than any other major airline in the US.
Question 3: Unique Competencies, Resources, and Capabilities of Southwest Airlines
Unique Competencies
Southwest Airlines is recognized as a benchmark in the air industry due to its operational excellence. The company offers affordable charges and has good delivery structures in booking system and innovative HR practices.
Resources
For Southwest Airlines, the company’s resources are its employees because it devotes much attention to hired people. The company's management believes that skills bring a positive attitude in the company and the willingness to give the best services. Employees' satisfaction ensures that the company services have never been curtailed due to strikes or any passenger die due to the aircraft's safety incidents.
Capabilities
Capabilities focus on the skills of the company in coordination and use resources. The management of Southwest Airlines creates incentives for employees and passengers. The major competencies include low fares for its passengers, usually 30% of those of the competitors. The company has a lower cost structure, which helps it record-high profits even during the recession (Ethiraj & Zhou, 2019). The company also offers point-to-point services, uses high-frequency flights, and short-haul of a fleet consisting of Boeing 737.
Question 4: The Airline Industry and Covid-19
The airline industry was adversely affected by the c