MMUGM - JAKARTA

Case Study

Araro JirehAry AndanaBambang Wijarnako

Presented by

MMUGM - JAKARTA

The Content

Southwest Airlines at a GlanceWhat makes SWA Different?Case AnalysisRecommendation

MMUGM - JAKARTA

Southwest Airlines at a Glance

MMUGM - JAKARTA

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

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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

Southwest Airlines at a Glance

MMUGM - JAKARTA

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)

Southwest Airlines at a Glance

MMUGM - JAKARTA

What Makes SWA Different ?

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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

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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

What makes SWA Different?

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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

What makes SWA Different?

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Case Analysis

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Southwest Airlines Strategy

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The Generic Strategy – Michael Porter

SWA

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Framework for Strategy Implementation

Strategy Organization Structure

CULTURE

ManagementControl

Human Resources

ManagementPerformance

Implementation Mechanism

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Culture

Clear required Work Ethics ((Hard Work, High Energy, Fun, Local Autonomy and Creativity)

Constantly Reinforce Culture to the employee

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Human Resources Development

Pays for Performance Effective Type of Contract Employee Involved Hiring Process Profit Sharing System (ESOP – Employee Stock

Ownership Plan)

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Organization Structure

Effective Functional Structure

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The Conclusion

SUPPORT ACTIVITIES

PRIMARY ACTIV

ITIES

EFFECTIVEPER

FORM

ANCE

HIGH

EFFIC

IENT

COMPETITIVE

ADVANTAGE

MMUGM - JAKARTA

The Recommendation

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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.

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Thank You