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Southwest airlines a strategic perspective
Southwest airlines a strategic perspective
Southwest airlines a strategic perspective
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Southwest Airlines is a fairly impressive organization. Throughout their history they have proven to be resilient. In their early days they had to ward off pressures that were placed on them from the more dominant airlines in their area. These airlines tried to force them out of business using regulatory pressures. The second impressive show of resiliency came when in the 1970’s the government tried to force southwest out of Love Field to the new Fort Worth airport that the government had invested in heavily. Another impressive feat of the airline is its can-do attitude. Throughout it’s history even when things were dire they still persevered. In my experience this is a monumental task as it is so easy to breed negativity instead of being positive about outcomes. Lastly, it is very impressive that Southwest was able, even in these trying times, to lower fairs and provide excellent customer service. Ideas such as their $10 fair Houston-> Dallas flight proved to be more successful than anticipated. I would give Southwest management an excellent grade of achievement. In my experience on of the most prevalent things that I have seen from upper management is the disengagement when they run into a problem. To me it seems as if they don’t want to put their neck out there to do what needs to be done and things become stagnant. From a strategic standpoint the company doesn’t fail but it doesn’t thrive either. It just seems to flounder around no really going anywhere. Southwest doesn’t seem to suffer from this problem; on the contrary they seem to do the complete opposite supporting programs like “bags fly free” unlike their competitors. These efforts continue to give them a winning strategy as they continue to thrive altho... ... middle of paper ... ...aving too many planes booked for a city, or having overlapping flight times would be detrimental to the bottom line. A second issue I see is that Airtran used Boeing 717’s in it’s fleet. Boeing purchased this airframe in the merger of McDonnell Douglas in 1997 and discontinued it’s production in 2006. Once an airframe is no longer produced replacement parts costs can climb. The airframe didn’t see major use as only 156 were produced furthering this problem. It would be advantageous for Airtran to dump these on the market and replace them with 737 models. I’m not really in a position to give any advice to Gary Kelly besides to keep up the essence that is Southwest. It seems to be working and effective as I have seen airline after airline dry up and die. Even once powerful airlines like Pan Am, and TWA couldn’t make it in the ever-changing airline industry.
Southwest airlines is one of the most widely respected companies among those profiled by Firms of Endearment. They are recognized for having one of the best corporate cultures, which is emphatically encouraged from the top down. Southwest’s model clearly exemplifies the concept of servant leadership, and we will elaborate on how this creates a firm of endearment.
Another internal challenge for Southwest Airlines is the conflicting management style and business operation with AirTran. On top of that, the external challenges such as the increase of competitions and gas prices are some of issues f...
“Our people are our single greatest strength and most enduring long-term competitive advantage,” reports CEO Gary Kelly on the Southwest Airline website (https://www.southwest.com/html/about-southwest). The company works hard to hire great individuals and then rewards and supports them to make satisfied, productive employees (Ross & Beath, 2007). In fact, Southwest Airlines has received repeated recognition as a great place to work (“Southwest Corporate Fact Sheet,” n.d.). As a result, Southwest Airlines is able to provide a low-cost, fun-cultured experience with excellent customer service (Ross & Beath, 2007). This has allowed the company to build its final strength in this evaluation: a strong brand
Southwest Airlines strategy of focusing on short haul passenger and providing rates as low as one third of their competitors, they have seen tremendous growth in the last decade. Market share for top city pairs on Southwest's schedule has reached 80% to 85%. Maintaining the largest fleet of 737's in the world and utilizing point-to-point versus the hub-and-spoke method of connection philosophy allowed Southwest to provide their service to more people at a lower cost. By putting the employee first, Southwest has found the key to success in the airline business. A happy worker is a more productive one as well as a better service provider. Southwest will continue to reserve their growth in the future by entering select markets only after careful market research.
In today's competitive marketplace, all firms are seeking ways to improve their overall performance. One such method of improvement, recently adopted by many firms, is benchmarking. Benchmarking is a technique used to evaluate internal business processes. "In this analysis, managers determine the firm's critical processes and outputs, baseline those processes, then compare the performance of each process against a standard outside the industry" (Bounds, Yorks, Adams, & Ranney 1994). To effectively improve a business process to world-class quality, managers must find a firm that is recognized as a global leader, not just the industry standard. Successful benchmarking requires tailor-made solutions, not just blind copying of another organization. Measurement and interpretation of data collected is the key to creating business process solutions.
It is evident that the greatest strength that Southwest Airlines has is its financial stability. As known in the US airline industry, Southwest is one of those airlines who are consistently earning profits despite the problems the industry is facing. With such stability, the corporation is able to make decisions and adjust policies, which other heavily burdened airlines may not be able to imitate.
Since 1987, when the Department of Transportation began tracking Customer Satisfaction statistics, Southwest has consistently led the entire airline industry with the lowest ratio of complaints per passengers boarded. Many airlines have tried to copy Southwest’s business model, and the Culture of Southwest is admired and emulated by corporations and organizations in all walks of life. Always the innovator, Southwest pioneered Senior Fares, a same-day air freight delivery service, and Ticketless Travel. Southwest led the way with the first airline web page—southwest.com, DING, the first-ever direct link to Customer’s computer desktops that delivers live updates on the hottest deals, and the first airline corporate blog, Nuts About Southwest. Our Share the Spirit community programs make Southwest the hometown airline of every city we serve.
The marketing approach of Southwest Airlines is built upon their strong business model. They have successfully managed to target two specific market segments of the airline industry while remaining profitable. Their strategy is simple, to offer frequent non-stop flights with the lowest costs which appeal to both the business and budget travelers. By segmenting their target audience to specific demographics and ticket pricing, passengers know exactly what they are getting for the price they pay.
In the airline industry, Southwest Airlines is considered a true innovator. By shaking up the rules of flying and improving upon inefficient industry norms, Southwest has quickly grown by leaps and bounds. From the very start, Southwest Airlines' goals were to make a profit, achieve job security for every employee, and make flying affordable for more people (Southwest,2007). Southwest has not strayed from these goals. It does not buy huge aircrafts, fly international routes or try to go head to head with the major carriers; and thanks to a great planning, Southwest airlines has become the most successful airline company in the U.S., if not the world.
Since CEO Gary Kelly took the reins of the company back in 2004, Southwest has maintained and enhanced the company’s ability to offer customers a great flying experience for low fares. This effort start early in Mr. Kelly’s tenure when he identified four success factors
The promotion of employees from within is a fact and testament of their successful development and training program. Southwest Airlines has a program designed to strategically developed managers in an intensive Manager-in-Training program that prepares them for the next level. The university is the umbrella for training and development for Southwest since 9/11 which has focused on enhancing its curriculum to help employees achieve their goals. Southwest Airlines provides a Career Development Group that helps employees focus on personal and career growth. This is accomplished by working on a component that will align the employee’s personal development needs and strengths so they can grow more. It also encompasses a skills assessment that’s structured toward helping employees align their degree to a specific job within the company. As stated before, Southwest’s purpose is designed to encourage employee fulfillment and by their Career Development services help them become more fulfilled in their jobs. According to their philosophy, Southwest Airlines hires for attitude and trains for skills. This is why they have become a company with high retention rates. Southwest Airlines is voted “the best place to work” for a simple reason. The company invests in their employees and are committed to their values and
There are few things that are impressive about Southwest Airlines first one is how they treat the employees. For Southwest Airlines employees are first and customers are second. If the employees are treated well that will bring in happy customers. Next is that Southwest is not only with their low prices but is able to create a competitive advantage by offering a fun and humorous experience when flying. Finally another impressive fact is when Herb Kelleher’s retire from CEO position yet remained a Southwest employee till July 2014. Even after the retirement he was still active with the Southwest Airlines that reflected his enthusiasm and dedication for the
Before to select the proper alternative, three alternatives were analysed and evaluated under four decisions criteria: customer experience, cost, growth rate / market penetration and ease to implementation (See Exhibit 2: Factor Analysis). Between all the alternatives, it was suggested that Southwest Airlines enters to New York City by bidding the slots and gates at the LGA (See Exhibit 3: Alternatives Analysis). This alternative sustains the challenge of changing the customer experience which means adding more flights from and to the East; furthermore, entering to new markets will reinforce “the power of the network” through LGA. At the same time, this decision will allow signing more code-sharing agreements with other airlines flying to international destinations and offer new products and services to LUV customers as loyalty rewards, in-flight internet, onboard duty-free purchases, etc.; as a result of this, it will increase passenger’s insights and experiences by flying with Southwest Airlines. Nevertheless, there is potential risk by selecting this alternative, in the recent years the energy prices has had a huge increase affecting costs, fares and even capacity needed, however Southwest Airlines has been able to hedge fuel for decad...
It all started in 1971, when Rolling King and Herb Kelleher decided to challenge the existing rut of charging high prices for air travels. They considered the railways and roadways their competitors and decided to offer cheaper travel for smaller routes. The company was incorporated in 1967, apart from initial entry troubles, Southwest has been the only US airline to have earned profits since 1973. The eccentric company’s outlandish way of conducting themselves has been the sole reason for Southwest Airlines to succeed in a highly competitive and packed industry.
The mission of Southwest Airlines is a dedication to the highest quality of service delivered with warmth, friendliness, individual pride, and company spirit (Mission…, 2007). The company also provides opportunities for learning and personal growth to each employee. Creativity and innovation is very important and highly encouraged, for the purposes of improving effectiveness. Employees are to be provided the same concern, respect, and caring attitude within the organization that the employees are expected to share with the customer. Southwest Airlines was initially created to be a low-cost alternative to high price of intra-Texas air carriers (Freiberg, 1996). Southwest’s fares were originally supposed to compete with car and bus transportation. It was a little airline, and it would withstand the test of time. As a discount, no-frills airline, it would provide stiff competition for larger airlines. Their strategy was to operate at low cost, offering no food, no movies, no first class, and no reserved seats. They created their own market and provided increased turnaround times at the gate, by avoiding hub-and-spoke airports and opting for short-haul, direct flights. Through this market approach, Southwest has a majority of market share in the markets they serve.