A Case Study Of Southwest Airlines Strategic management
In the airline industry, industry, Southwest Airlines Airlines is considered considered a true innovator. innovator. By shaking up the rules of flying and improving improving upon inefficient inefficient industry norms, Southwest Southwest has quickly grown by leaps and bounds. From the very start, Southwest Airlines goals were to make a profit, achieve !ob security for every employee, and make flying affordable for more people "#iaconu $a%im, &'(&, p. &)* 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 ma!or carriers+ and thank thankss to a great great planni planning, ng, Southw Southwest est airli airlines nes has has becom becomee the mo most st succes successfu sfull airli airline ne company in the .S., if not the world. -rganiation operating in a highly competitive industry need to operate strategy that gives them competitive advantage, and one that is not easy to imitate. -perating as a world leading organiation is accomplished with a huge task+ whereby for the organiation to maintain its leading status it should continue to operate a strategic management plans that out pass those of its competitors. "/allowell, (001, p. 12* 3hen an organiation fully adapts to its its envir environm onment ent in which which it operat operates, es, there there is the the advan advantag tagee ascrib ascribed ed to it where where the organiation would be positioned to effectively attain its ob!ectives and long term goals. Strategic management is then considered as a significant tool for an organiation to adapt to its environment by utiliing its resources in the most efficient way to bring out effective operation. In the contemporary business world, the level of competition is ever increasing+ increasing+ it requires that an organiation organiation strategie strategie in a way that would give it competitive competitive advantage over its rivals. Apparently, strategic management is a relevant tool an organiation could use in withstanding the comple% and dynamic business world. Armitage "(00&* defines strategic management as a continuous process that works to fit an organiation into its changing environment. Case study
4he case study for this write5up it is recommended that Southwest airline build up an intensiv intensivee strategy strategy in gaining gaining more competi competitive tive advantage. advantage. Intensiv Intensivee strategy strategy which will enable the organiation use its resources to consolidate on areas where it has competitive advantage and spread its market operations operations into areas where it is not well established to give it widened market share. "6aynor, &'((, p. )2*
In contemporary times, the hard work and strategies of Southwest Airlines have over the years implemented has seen, the organiation grow from leaps to bounds into an enviable airline organiation that is a reckoning force in the S airline industry. 7oing into &''), the Southwest Airline became the fourth largest S airline by the number of passengers that it carries, and the si%th largest in terms of revenue. It makes over an e%cess of 89 million annually, and has a workforce of about )9,''' staffs. It operates in 90 airports from 9: cites in )' states "ibid*. ;resently the Southwest Airlines has become the largest domestic airline in the nited States, by number of passengers carried. $ore than <' million passengers fly the Southwest Airlines each year to about 1' destinations around the country. Competencies
Southwest Airline core competence that is said to be the organiation=s >-rder winners= include the utiliation of both cost effect strategy and product differentiation to provide satisfying services to its different categories of clients. 4he Southwest Airline has mainly capitalied in cost effectiveness and differentiating of pattern of rendering its services as strategies in winning the patronage of its timing customers. "Singh, &''&, p. 29* 4he cost effective strategy adopted by the organiation is one that is used in giving the customer quality services at the most affordable price that is lesser than what the Southwest Airline rivals can offer. $ichael ;orter, in his work >?ompetitive Advantage=, proffers two ways a firm can obtain competitive advantage@ through product differentiation and cost leadership. ;roduct differentiation entails that the firm should come up with innovative product different from what is available in the industrial market where it operates. Technology
4he Southwest Airline on regular interval introduces the best of technology in its fleet of aircrafts. /owever, it has not lost its focus for minimiing cost. 4he organiation in time past has utilied its internal corporate identity as a viable tool for effective competition. 4he organiation=s utiliation of its internal innovation lays in its ability to use the organiation=s corporate identity, its corporate logo, corporate slogan corporate culture and staff grooming to its advantage in competition against rivals. Its corporate culture and identity, motivated human resources and effective strategic operation have over the years being a reckoning force to its success. 4he organiation operated a corporate identity that then to make its customers feel satisfied at the most conducive price. Its adopted corporate logo of >= is abided to in
making customer rela%ed and satisfied. ?orporate identity is a way of gaining competitive advantage to compete favorably. Its dynamics
4he Southwest Airline is a local carrier that operates within some )& states in the nited States and serves about 1& cities "Southwest Airline, &''<*. 4here are many opportunities abounding to the organiation. It could e%pand its services to cover the remaining &' states and other ma!or cities where it operation has not yet being established. 4he nited States is a large country, and most times people prefer traveling by air from one state to another or from one city to another, considering the distance it would take to embark on road traveling by car. 4hus, the opportunity abides that organiation such as local carrier, in which industry Southwest belongs, that they utilie this golden opportunity by e%panding on their e%isting areas of operations. Further, the government and economy of the nited States is very vibrant and stable compared to other developed countries economy. Protecting its Innovations
4he strategy Southwest Airlines can use in protecting its innovations, it is suggested that more needs to be done by the organiation to e%pand its operational routes to include other states in the federation. 4he organiation can do this by carrying out strategies that would see it making profit out those areas that it considers as unprofitable for its operations. 4his can be achieved through adopting other strategies different from the cost effectiveness it has adopted in other areas of its operations. /ere, the organiation can enter into deal with other airplane production companies to buy modern aircrafts that would make it give customers in these new routes the desired and taste they want in air service. 4he Southwest Airline mainly operates the Boeing aircrafts. "oigt, Buliga, C $ichl, &'(1, p.1
References
#iaconu $a%im, . "&'(&*. 4he #evelopment of the ow5?ost ?arriers= Business $odels. Southwest Airlines ?ase Study. Annals of the Ale%andru Ioan ?ua niversity 5 Economics, 90"(*. doi@('.&2<:v(')(15'(&5''(15< /allowell, 6. "(001*. Southwest Airlines@ A case study linking employee needs satisfaction and organiational capabilities to competitive advantage. /uman 6esource $anagement, )9"2*, 9()59)2. doi@('.(''&"sici*('005'9'%"(001&2*)9@2).'.co+&5 6aynor, $. E. "&'((*. #isruptive innovation@ the Southwest Airlines case revisited. Strategy C eadership, )0"2*, )(5)2. doi@('.((':(':<:9<(((((2<):< Singh, ;. "&''&*. Strategic 6eward Systems at Southwest Airlines. ?ompensation C Benefits 6eview, )2"&*, &:5)). doi@('.((<<'::1)1:<'&')2''&''9 oigt, G., Buliga, -., C $ichl, G. "&'(1*. ;ioneer in the Skies@ 4he ?ase of Southwest Airlines. $anagement for ;rofessionals, (<(5(:2. doi@('.(''<0<:5)5)(05)::295:H(2
