Southwest Airlines Case Study​

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Introduction

The airline industry has experienced a series of drastic changes in brand communication and marketing strategies. The level of competition in the sector has increased significantly especially given the existent airline industry liberalization. The environmental dynamics resulting from fluctuations in the prices of oil and inconsistent regulation as well as other social and economic variables have created a shift in the strategies that different airlines employ to remain competitive and survival the industrial turbulence. Whenever a new competitor venture into the market, the market share for a particular market segment or destination becomes affected hence a reduced market share for the existing firms. As a result, different companies in the industry strive to employ effective strategies that would stabilize their market share. The operation revenues depend on the air ticket prices, classification as well as flight load factor. Therefore, this paper looks into different strategic plans, leadership, competition and various issues that relate to the performance of the Southwest Airlines.

Part 1

Why Southwest Airlines is More Successful than its Competitors

Southwest Airlines is more successful than its opponents because the company gained its competitive edge through venturing into the provision of services to its customer that other airlines do not provide. The company also specializes in a carrier that offers relatively low-cost travel. Given that the carrier does not provide food services to customers traveling a short distance, it keeps the fares low to the customers and hence a way of having a competitive edge (Morrison 239). Besides, the services that the company provides meets the demand of customer and tailor their needs and as such, make the company more successful than its competitors. Most importantly, Southwest Airlines prides itself on customer satisfaction and employees wellbeing. The policy of no assigned seating and no first class played well with the customers. The company considers its employees as an integral part of its success and hence are more to the organization than workers.

The Alteration of the Original Strategy in Recent Years and Effect on Southwest’s Key Success Factors

The original strategy of the airlines was to provide low-cost air travel as well as guarantee customer satisfaction. The strategy was a success given the then nature of competition in the market; there were no many players in the industry (Morrison 241). As such, the increase in operating costs in the industry and the emergence of low-cost carriers into the market made the company to make some alterations on its strategies. The company did away with open seating. The new strategy was to increase revenues without an increase in the cost of travel that would affect its brand for low fares. The company strategized at winning more customers through an improvement of Southwest Customer Experience as well as venturing into new routes. The changes have not adversely affected the key success factors of the company but have rather enhanced them.

The Kinds of Things over Which Southwest’s Leadership Has Some Control Could Go Wrong And What Can Be Done To Make Sure They Do Not Happen.

Given the dynamics of the airline industry, adding many flights could go wrong. The management should look into the cost-benefit analysis of increasing the number of flights since such a decision may lead to waste of resources in circumstances where the demand is low. While the added flights have recorded some success rate, the company’s on-time performance has since fallen when compared to major airlines from 2002. Besides, the management has control over its workforce, and when the management does not address employees’ concerns, the company can face a serious problem (Heskett 21). The company’s culture has been that which favor a culture-rich workforce appointing unqualified individuals could endanger such a culture. Therefore, for such issues not to arise, the management must make careful decisions about employees’ qualifications as well as compensations.

Further Changes That Southwest’s Leadership Need to Make In The Face Of Competitive Moves and General Economic 
Conditions

The competitive levels continue to rise in the industry with new emerging companies. Besides, there is a constant fluctuation in economic conditions in different markets around the world. As such, the leadership of Southwest Airlines should ensure their expansion strategies conform to the current dynamics in the market to control a possible rise in the cost of operations and reduced revenues. Otherwise, I believe the company does not need to make more changes as its strategies make it among the best in the industry.

Whether I Would Recommend That Southwest Airlines Acquire the Gates and Slots Available At LaGuardia Airport

The goal of any organization is to employ different strategies that would make it explore alternatives that lead to more efficient operations, help it acquire a strategic advantage and maximize its profits while reducing the costs of operations. Southwest Airlines should acquire the Gates and Slots available at LaGuardia airport since such acquisitions would foster the company’s growth in terms of finances and the organizational propensity. It will also enable the company to penetrate the New York market adequately. LaGuardia will also provide route network traffic to the company. As such, the company should acquire the available Gates and Slots at LaGuardia and implement adequate strategies for their incorporations.

Part 2

The (Strategic Diamond) Staging, Differentiations, Arenas, Vehicles, Economic Logic from the Case

Arenas

Arenas of the case encompass where the company competes, the external environment including the product and service markets as well as geographic markets. From the case, Southwest Airlines operate in 64 U.S. cities and other parts of the world. The company provides air travel services. The company added flight segment of over three hours in 1984 and assumed its services with minimal onboard catering. It also used a technological system to carry out its procedures. The organization’s customer experience initiatives foster value creation for the customers.

 Differentions

The company specializes in a carrier that offers relatively low-cost travel, and the airlines do not provide food services to customers traveling short distances, and as such, the fares become affordable. It has a good image for quality services and greater convenience to business flyers. As such, customer service that incorporates simple, efficient and low-fare experience characterize high reliability.

Vehicles

The company engaged in code sharing, a practice where flights that the airlines operated were jointly marketed as a flight for one or more other airlines. The strategy allowed the company’s carriers to sell tickets on routes they did not fly. Code sharing was a vehicle that allowed Southwest Airlines to fill seats that would otherwise have been empty.

Staging and Pacing

Staging entails the sequence and speed for implementing the company’s strategic moves. From the case, Southwest Airlines fostered its global footprint by first growing its human resources by hiring 4,000 employees per year an initiative that supported its global growth strategies. The organization hires the right people for its services.

Economic Logic

The company provides air travel services at low-cost. Nevertheless, the cheap fare offers a competitive advantage in the market, which in turn lead to increase in the number of customers that it serves. As a result, the company’s revenues grow to the benefit of its shareholders.

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