Assignment
Case
On any given Saturday, an hours' worth of television viewing reminds you of just how competitive the airline industry is today. With ads touting the lowest prices, highest amenities, most leg-room, and fewest fees each of the carriers continue to try anything and everything to increase their passenger loads.
Southwest Airlines (SWA) is no exception. They seem to have had some substantial success with their recent ‘Transfarancy' campaign, touting both low fares and transparency in the fees they charge customers, which is why you were surprised Gary Kelly, CEO of SWA, just called.
One of the concerns he noted in SWA's low-cost pricing strategy is what can sometimes seem like a ‘race to the bottom,' as everyone discounts their prices. Constantly battling to advertise the lowest prices however can negatively impact the bottom-line, and since Southwest has 42 years of consecutive annual profitability, Mr. Kelly is not about to let the first losses occur during his watch!
As a result, he'd like you and your independent market research firm to prepare an analysis for him that covers the following issues and helps to guide him through the pricing decisions that need to be made next.
Copy and Paste the below questions in your write-up and place your answers underneath each question.
Problem Identification - Accurately, clearly, and completely identifies the relevant case specific problem
Problem Identification: The identified problem is .....
Question 1:
What do Southwest airline customers value the most?
a. Are there significant differences between business and leisure travelers' values?
b. How/where are these values the same and how are they different?
Question 2:
What has been Southwest's traditional pricing strategy?
a. Why has this strategy been so successful to this point?
Question 3:
What are the mix of factors that impact any airline making pricing decisions in today's current economic conditions?
Question 4:
What is the most significant pricing issue facing SWA specifically currently?
Question 5:
Describe and discuss the internal and external factors impacting airline pricing decisions?
a. What impact do these factors have on the organization's overall profitability?
Question 6:
a. What are the pros and the cons of each option?
b. How do/would these different options differentiate SWA from its competitors?
Question 7:
Which alternative do you recommend - and why?
a. Identify and defend what you think is their best alternative
b. State the short-term or intended outcome of this plan
c. Discuss the long-term sustainability of this pricing strategy
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.