orignal master file st mgt

8/8/2019 Orignal Master File St Mgt

1/67

Ehsan Zaib

Asad khaliq

Muhammad Tallal Sharif

Salman Shafique

Umair Imtiaz

Sarfaraz Durrani

Group Members


2/67

Topic of Presentation

Case Study:

SOUTH WEST AIRLINES


3/67


4/67

US based company

Founded on march 15, 1967

Positioned low cost

Headquarters in Dallas Texan

Largest in terms of passenger careers

3rd largest in terms of fleet

Operates 3510 flights daily

Description


5/67

The freedom to fly


6/67

The mission of Southwest Airlines is dedication to the highest quality of

Customer Service delivered with a sense of warmth, friendliness,

individual pride, and Company Spirit. To give ordinary people the

opportunity to fly.

To the employees

We are committed to provide our Employees a stable work

environment with equal opportunity for learning and personal growth.

Creativity and innovation are encouraged for improving the

effectiveness of Southwest Airlines. Above all, Employees will be

provided the same concern, respect, and caring attitude within the

organization that they are expected to share externally with everySouthwest Customer.

Mission statement


7/67

CustomerCustomer ProductProduct&&

serviceSserviceS

MarketsMarkets TechnologyTechnology GrowthGrowth PhilosophyPhilosophy SelfSelfConceptConcept

PublicPublicImageImage

EmployeesEmployees

YESYES YESYES YESYES NONO YESYES YESYES NONO NONO YESYES

ComponentsComponents

Mission StatementMission Statement


8/67

With our Advanced plains and up-to-

dated services, keeping track of our

competitors we can achieve

maximum market share

New

mission statement


9/67

To have a conservative increase growth, capitalize and cutback

schedules of other airlines. To continue expanding

conservatively in long-haulsuccess.

Vision Statement


10/67

Components

Vision Statement

What you Are?What you Are? Where you wantWhere you wantto be?to be?

What is the planWhat is the planto be there?to be there?

NoNo NoNo YesYes


11/67

As being in airlines industry, We would like to increase our market shareand maximize our profit by customer satisfaction and there feedback.

New

Vision Statement


12/67

In 2004 Southwest Airlines is fourth largest domesticcarrier, customer boarded

In 2002 they traveled in 58 cities and 30 states, it has

been 13 years in a row that they are profitable, even afterSeptember 11, 2001, net income fell 52.9 percent,Southwest was the only airline company that had a profit allthe other companies were in the red

Was the first airline to achieve the Triple Crown, they had

five difference Triple Crown dedicated to the Employees ofSouthwest Airlines for their excellent achievements.

Awards


13/67

Destination to Destination

No connecting flights

Competitive Advantage


14/67

Ensure highest quality Customer Service in the air or on the ground.

Ready to help customers under any circumstances.

Are there to ensure you make it from point A to point B safely

To stay the most successful with low-fare, high frequency point-to-point

carrier.

Goals and Objectives


15/67

ASAD

KHALIQ


16/67

EFE MatrixKEY EXTERNAL FACTORKEY EXTERNAL FACTOR WEIGHTSWEIGHTS

0.0 TO 1.00.0 TO 1.0

RatingsRatings

1 to 41 to 4

Weighted scoreWeighted score

OpportunitiesOpportunities

Key opportunity that the otherairlines have higher prices to the

destination that we are notcovering so its an opportunity of

market share that can becaptured

0.080.08 33 0.240.24

United Air lines bankruptcyprovided an opportunity to

capture the gap of that airline

customer.

0.100.10 44 0.400.40

Competitors are cutting back

there services. And we can

capture that market share

0.100.10 33 0.300.30

Every one require services at a

lower cost and easy point to

point destinations and we can use

these factors to capture market

share

0.250.25 33 0.750.75

Opportunity to Increase the span 0.100.10 33 0.300.30


17/67

KEY EXTERNALKEY EXTERNALFACTORFACTOR

WEIGHTSWEIGHTS

0.0 TO0.0 TO1.01.0

RatingsRatings

1 to 41 to 4Weighted scoreWeighted score

ThreatsThreats

Well establishedWell establishedCompetitorsCompetitors

0.080.08 22 0.160.16

Security ProblemsSecurity Problems 0.080.08 33 0.240.24

Government policies (TaxGovernment policies (Taxrates)rates)

0.050.05 22 0.100.10

Air line policies (No ofAir line policies (No ofpassengers per plane)passengers per plane)

0.060.06 33 0.180.18

TotalTotal 11 3.073.07


18/67

KEY internal FACTORKEY internal FACTOR WEIGHTSWEIGHTS0.0 TO0.0 TO

1.01.0

RatingsRatings


StrengthsStrengths

Point to point servicePoint to point service 0.250.25 44 1.001.00

Quality serviceQuality service 0.150.15 44 0.600.60

Cost of serviceCost of service 0.100.10 44 0.400.40

Skilled workforceSkilled workforce 0.110.11 22 0.220.22

IFE MATRIX


19/67

KEY internal FACTORKEY internal FACTOR WEIGHTSWEIGHTS

0.0 TO0.0 TO1.01.0

RatingsRatings


WeaknessWeakness

No of Airplanes (FLEET)No of Airplanes (FLEET) 0.150.15 22 0.300.30

Span of BusinessSpan of Business 0.140.14 22 0.480.48

Cannot adopt strategies ofCannot adopt strategies of

other airlinesother airlines

0.100.10 22 0.200.20

11 3.203.20

IFE MATRIX

(Contd)


20/67

South westSouth westAirlinesAirlines

continentalcontinental EmiratesEmirates

CSFsCSFs WtWt RatingRating WtdWtdScoreScore

RatingRating WtdWtdScoreScore

RatingRating WtdWtdScoreScore

Market shareMarket share 0.120.12 33 0.360.36 22 0.240.24 33 0.360.36

Prod. QualityProd. Quality 0.100.10 44 0.400.40 33 0.300.30 44 0.400.40

Cons. LoyaltyCons. Loyalty 0.100.10 22 0.200.20 22 0.200.20 22 0.200.20

Global Exp.Global Exp. 0.200.20 44 0.800.80 33 0.600.60 22 0.400.40

CPMCPM


21/67

South westSouth westAirlinesAirlines

continentalcontinental EmiratesEmirates

CSFsCSFs (contd)(contd) WtWt RatingRating WtdWtdScoreScoreRatingRating WtdWtd

ScoreScoreRatingRating WtdWtd

ScoreScore

E-commerceE-commerce 0.080.08 22 0.160.16 22 0.160.16 22 0.160.16

Customer ServCustomer Serv 0.100.10 22 0.200.20 33 0.300.30 33 0.300.30

PricePricecompetitivecompetitive

0.120.12 44 0.480.48 22 0.240.24 33 0.360.36

Mgt. experienceMgt. experience 0.030.03 33 0.090.09 33 0.090.09 44 0.120.12

Point to pointPoint to pointserviceservice

0.150.15 44 0.600.60 22 0.300.30 11 0.150.15

TotalTotal 11 3.293.29 2.432.43 2.452.45

CPM


22/67

EHSAN

ZAIB


23/67

Financial Ratios


24/67

Liquidity Ratio


25/67

Liquidity ratioLiquidity ratio

1. Current ratio = Current Assets/Current LiabilitiesCurrent ratio = Current Assets/Current Liabilities=2601/2887=2601/2887

=0.900=0.900

2. Quick (acid-test) ratio = Cash + Accts Rcvbl / Current Liabilities2. Quick (acid-test) ratio = Cash + Accts Rcvbl / Current Liabilities

=1390+241/2887=1390+241/2887

=0.564=0.564


26/67

Leverage ratios


27/67

1. Debt-to-total assets ratio = Total Debt/Total Assets (Debt Ratio)

=7011/13460

=0.5208

2. Debt-to-equity ratio = Total Debt/Total Equity

=7011/6449

=1.087

3. Long-term debt-to-equity ratio = Long-term Debt/Total Equity

=1567/6449

=0.242

4. Times-interest-earned (coverage) ratio = Profits B.I.T./Total interest

=790/128

=6.171

Leverage ratios


28/67

Activity ratios

A ti it ti


29/67

1. Fixed assets turnover = Sales/Fixed Assets

=9086/13859

=0.655

2. Total assets turnover = Sales/Total Assets

=9086/13460

=0.675

Activity ratios


30/67

Profitability Ratios


31/67

1. Gross profit margin = Sales-C.o.G.S./Sales

=9086-8152/9086

=0.102

2. Operating profit margin = EBIT/Sales

=790/9086

=0.086

3. Net profit margin = Net income/Sales

=499/9086

=0.0544. Return on total assets (ROA) = Net Income/Total Assets

=499/13460

=0.037



32/67

5. Return on stockholders equity (ROE) = Net Income/Total Equity

=499/6449

= 0.077

6. Earnings per share (EPS) = Net Income/# Shares Common Stock

Out

=499/807611634

= 6.178



33/67

MUHAMMAD

TALLAL

SHARIF


34/67

SWOT MATRIX

St thSt

th W kW k


35/67

StrengthsStrengths::1.1.Point to point servicePoint to point service2.2.Quality serviceQuality service3.3.Cost of serviceCost of service4.4.Skilled workforceSkilled workforce

WeaknessesWeaknesses::1.1.No of Airplanes(FLEET)No of Airplanes(FLEET)2.2.Span of BusinessSpan of Business3.3.Cannot adopt strategies of otherCannot adopt strategies of otherairlinesairlines

Opportunities:Opportunities:1.1.Some air lines are leaving theSome air lines are leaving themarker share.marker share.2.2.Opportunity in other marketsOpportunity in other markets3.3.Advance Facility from differentAdvance Facility from differentFinancial institutions.Financial institutions.

S1,O2,O3=A very attractive opportunityS1,O2,O3=A very attractive opportunitythat can be achieved I-e to increase thethat can be achieved I-e to increase thespan of Business by providing services inspan of Business by providing services inforeign destinations.foreign destinations.O1, S2, s3= Air lines that are leaving theO1, S2, s3= Air lines that are leaving themarket are providing an opportunity for usmarket are providing an opportunity for usto capture there marker share byto capture there marker share byattracting there customers towards outattracting there customers towards outQuality and cost of serviceQuality and cost of service

W2,O2= span of business is low but thereW2,O2= span of business is low but thereis an opportunity in market that we canis an opportunity in market that we canavail and increase our market share.avail and increase our market share.W3, W1,O3= Different financialW3, W1,O3= Different financialinstitutions are there to provide finance toinstitutions are there to provide finance tothe company to acquire new planes andthe company to acquire new planes andthusthus can increase the fleet size.can increase the fleet size.

Threats:Threats:

1.1.Well established CompetitorsWell established Competitors2.2.Security ProblemsSecurity Problems3.3.Government policies (Tax rates)Government policies (Tax rates)4.4.Air line policies (No ofAir line policies (No ofpassengers per plane)passengers per plane)

S1,T1= point to point service is aS1,T1= point to point service is a

competitive advantage for South West aircompetitive advantage for South West airlines. Though out competitors are welllines. Though out competitors are wellestablished but its hard for them to adoptestablished but its hard for them to adoptthis strategy.this strategy.S4,T2= Skilled workforce work wholeS4,T2= Skilled workforce work wholeheartedly for the organizational successheartedly for the organizational successso its also a remedy for Securityso its also a remedy for Securityproblems.problems.

W1,T3= As the number of planes areW1,T3= As the number of planes are

less they can be monitored more easilyless they can be monitored more easilyso strict check and balance should beso strict check and balance should bekept in order to eliminate the securitykept in order to eliminate the securitythreat which is more then a night mare forthreat which is more then a night mare forairline industry.airline industry.


36/67

IE Matrix


37/67


38/67

Possible strategies:1.Market penetration

2.Market Development

3.Product Development

Backward and forward integrations are also

feasible in but there is not any option ofHorizontal integration.

But as per my opinion South West

airlines should Hold And Maintain due to

global recession and other unforeseensituations. That might not put the

company in any kind of trouble that the

company is not ready to overcome.


39/67

SPACE MATRIX

SPACE F t


40/67

SPACE Factors

SPACE F t


41/67

SPACE Factors

Environmental Stability (ES)

Technological changes (-5)

Rate of inflation (-3)Demand variability (-2)

Price range of competing products (-

1)

Barriers to entry (-5)

Competitive pressure (-4)

Price elasticity of demand (-1)Risk involved in business (-3)

(ES) Total=-24/8=-3(ES) Total=-24/8=-3

Financial Strength (FS)

Return on investment (3)

Leverage (4)

Liquidity (4)

Working capital (3)

Cash flow (4)

(FS) Total=18/5=3.6(FS) Total=18/5=3.6

External Strategic PositionInternal Strategic Position


42/67

CA -2.6 FS 3.6

IS 3.6 ES -3

Y-Coordinate 1 X-Coordinate 0.6

SPACE M t i


43/67

SPACE MatrixFS

+6

+1

+5

+4

+3

+2

-6

-5

-4

-3

-2

-1-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6

ES

CA IS

Conservative Aggressive

Defensive Competitive


44/67

BCG Matrix

DogsIV

Cash CowsIII

Question Marks

I

Stars

II

Relative Market Share PositionHigh

1.0

Medium

.50

Low

0.0

Industry

Sa

High

+20

Low

-20

Medium

0

South

WestAirlines

Current position

BCG M t i I t t ti


45/67

BCG Matrix Interpretation

1. Represents the organization best long termopportunities for growth and profitability.

2. Horizontal integration, market penetration, marketdevelopment, product development, and joint

ventures are appropriate for south west airlines.3. Joint ventures is the best possible strategy for

southwest airlines with emirates, British airways, orUS air ways.

4. Horizontal Integration is also an alternative butdespite of SOUTHWEST air lines current financialposition it is not at all recommended by our group.


46/67

KEY FACTORS WEIGHT Market expansion Joint venture

Opportunities AS TAS AS TAS

Key opportunity that the

other airlines have higherprices to the destination thatwe are not covering so its anopportunity of market share

that can be captured

0.10 4 0.40 1 0.10

United Air lines bankruptcy

provided an opportunity to

capture the gap of that airline

customer.

0.07 4 0.28 1 0.07

Competitors are cutting back

there services. And we can

capture that market share

0.10 3 0.30 2 0.20

Every one require services ata lower cost and easy point

to point destinations and we

can use these factors to

capture market share

0.20 4 0.80 3 0.60

Opportunity to Increase the 0.10 3 0.30 2 0.20


47/67

Threats

terrorism has decreased

consumer air travel

0.08 1 0.08 4 0.32

Rising repair and maintenance

cost.

0.06 2 0.12 3 0.18

Government policies (Tax

Rates)

&

Air lines policies(NTSB)

0.10 2 0.14 3 0.30

Possibility of competitors to

adopt out strategies

0.09 3 0.18 4 0.36

Well Established Competitors 0.10 4 0.28 3 0.30

Total 1.0


48/67

StrengthsVery few customer complaints 0.09 4 0.36 3 0.27

first among airlines forcustomer service satisfaction 0.10 4 0.40 3 0.30

One of the largest domestic

carrier in terms of customers

boarded

0.04 4 0.16 2 0.08

Triple crown holder 0.07 4 0.21 3 0.21

Lowest Fares 0.06 4 0.24 3 0.18Southwest has new automated

systems and technologies that

have streamlined the check-in

process

0.03 3 0.09 2 0.06

Efficient employees 0.02 3 0.06 2 0.04Employees loyalty 0.01 3 0.03 2 0.02

Time Punctuality 0.05 4 0.20 1 0.05

Offers non-stop flights 0.10 3 0.30 1 0.10


49/67

Weaknesses

Limited Span of Business

(only domestic)

0.10 4 0.28 2 0.20

Span of Business 0.20 3 0.30 2 0.40

Cannot adopt strategies of otherairlines

0.13 2 0.16 1 0.13

TOTAL 1 5.67 4.67


50/67

Quadrant IV

1. Concentric diversification

2. Horizontal diversification3. Conglomerate

diversification

4. Joint ventures

Quadrant III

1. Retrenchment

2. Concentric diversification3. Horizontal diversification

4. Conglomerate

diversification

5. Liquidation

Quadrant I

1. Market development

2. Market penetration

3. Product development

4. Forward integration

5. Backward integration

6. Horizontal integration

7. Concentric diversification

Quadrant II

1. Market development

2. Market penetration

3. Product development

4. Horizontal integration

5. Divestiture

6. Liquidation

RAPID MARKET GROWTH

SLOW MARKET GROWTH

WEAK

COMPETITIVE

POSITION

STRONG

COMPETITIVE

POSITION


51/67

Sarfaraz

Ann al Objecti es


52/67

To start flights to places where we have not been to mostprobable Emirates and Asian countries.

Keep our employees trained and up-to-date.

Budget for R&D and also for marketing and sales team forpromotion of our organization.

Bringing employees near and provide them to talk on thesituation of airline and any new ideas will be encouraged.

Annual Objectives

Policies


53/67

Strict check and balance on every region especially the

places where we are facing any problems

By following international standard of Hiring and firing

and training.

Offering discounts on special eves.

Policies

Needed Resources


54/67

New Air Crafts

Debts from financial institutions.

Needed Resources


55/67

The best strategy for South west airlines will be to expand there SPAN OF

BUSINESS to other countries and increase the destinations and the placesthey are providing the services in.

The current competitive advantage that southwest air lines got is non stop

flights means point to point services, so it should be maintained even if the

business is expanded to other places around the globe.

People acquire the services of other tourism companies. Southwest shouldprovide these information about different tourist spots to encourage tourism

and thus indirectly the customers for southwest airlines.

Increase direct flights

Purchase bigger planes

Get Cheap agreements with Airports for flights

Possible Strategies

Implementation


56/67

To cover more destination around the globe we

would need more plains and also its an opportunity

we can get advance (loan facility) from financial

institutions and can afford new planes to increase

the fleet.Provide the ticketing and reservation staff training

and UPDATED information about the tourism

updates from the most visited places around the

globe.

Implementation

Evaluations


57/67

As we are taking debt so special care should be taken.Because it would increase bankruptcy risk so as much

possible the cost should be kept in control.

MONTHLY reports and keeping in mind any

environmental changes. And bring the necessary change

in our business strategy too.

Feed-back from every one in the organization i-e from

every line of managers the information should be

collected about the response of there respective clients.

Suggestions of every one among the organization and

also the customers should be considered as keeping in

mind the concept that customer is always right.

Evaluations

Benefits for Emplyees


58/67

Benefits for Emplyees

Recreational trips for the outstanding performers.

Promotions

Salary Increments

Healthy rewards for those who would produce good ideas

Departments Names


59/67

Following are the main departments in any organization

1.Finance and accounts

2.Marketing and Sales

3.Human resource and administration4.Technical / Operations

5.Research and Development

Departments Names


60/67

Preparation of budget, appropriation of accounts, re-

appropriations,surrender andsavings.Control of expenditure and ways &means position.

Audit.

Treasury administration: Administration of Taxes i.e. Sales Tax,

Entertainment Tax, Luxury Tax and Entry Tax etc.

Resource mobilization through loans, Institutional Finance, SmallSavings, Credit and Investment and public debt.

Financial concurrence and advice.

Compilation of Codes, Rules and procedures concerning financial

transactions and having bearing on State finance and their

implementation.

Safety and investment of funds from consolidated funds, contingency

fund and public account.

Contract, recovery and refund of revenue.

Finance and Accounts

Marketing and Sales


61/67

Marketing and sales differ greatly, but have the same goal.

Marketing improves the selling environment and plays a veryimportant role in sales. If the marketing department generates

a list of potential customers, that can benefit sales. A marketing

department in an organization has the goal increasing the

number of interactions between potential customers and the

organization. Achieving this goal may involve the sales teamusing promotional techniques such as advertising, sales

promotion, publicity, and public relations, creating new sales

channels, or creating new products (new product

development), among other things. It can also include bringing

the potential customer to visit the organization's website(s) formore information, or to contact the organization for more

information.

Marketing and Sales

Human resource and


62/67

Our host organization SOUTHWEST AIR LINES HumanResources strategically partners with all departments,

delivering programs and services to attract, motivate and retain

a talented, diverse and dedicated workforce.

Areas within Human Resources include Staffing and Recruiting,

Training and Development, Compensation, Benefits, Employee

and Labor Relations, Strategic Workforce Planning and Health

Services.

Staffing and Recruiting is responsible for attracting, screening,

interviewing and assigning candidates to their best-suited field.

This department is also charged with organizing and attending

career fairs.

Human resource and

administration

Human resource and


63/67

The Compensation department conducts salary surveys, analyzes andprepares job descriptions, establishes equitable salary rates within the

organization, and provides guidance to managers on company salary

policies and practices.

The Benefits function manages the day-to-day activities involved in the

administration of major benefit programs for employees.

The Labor Relations department administers the Collective Bargaining

Agreement with the union and advises on matters pertaining to contract

negotiations, employee grievance cases, arbitrations, and federal and

state labor legislation.

Employee Relations is responsible for investigating and providing counselto salaried exempt and nonexempt employees and management on work-

related issues

Human resource and

administration (Contd)


64/67

Life at Southwest

Happy Employees = Happy Customers. Happy

Customers keep Southwest flying. Our one of a kind

Culture includes FUN events like Halloween, deck, and

spirit parties that keep our Employees motivated andmake it worthwhile to work hard for the Company they

love!

Ref: (Copy, paste from southwest airlines)

Life at Southwest


65/67

The aim of the operation department is the overallmanagement and general administration of the core

operations of the company. This department keeps a

check on the personnel, legal matters and regular

operations of the company. For example, theoperations department of an air traveling company

would be the management of carrier and monitoring the

status of carrier. Therefore, operations department play

a very important role in controlling the core activities of

the business.

Technical / Operations

Research and


66/67

The phrase research and development (also R and Dor, more often, R&D), according to the Organization forEconomic Co-operation and Development, refers to"creative work undertaken on a systematic basis inorder to increase the stock of knowledge, including

knowledge of man, culture and society, and the use ofthis stock of knowledge to devise new applications

R&D investment generally reflects a government's ororganization's willingness to forgo current operations or

profit to improve future performance or returns, and itsabilities to conduct research and development.|

Research and

Development


67/67

Freedom To Flywww.southwest.com
http://www.southwest.com/http://www.southwest.com/

orignal master file st mgt

Documents