Southwest airlines case study strategic management

If a firm is targeting customers in most or all segments of an industry based on offering the lowest price, it is following a cost leadership strategy; If it targets customers in most or all segments based on attributes other than price e.

Case Study: Southwest Airlines Competitive Advantages

This creates a need for Virgin to be both a cost leader and product differentiator. This involves providing the best value for a relatively low price. Of course, we are not suggesting it divests from every holding, but only the ones that have reached their potential or are floundering in the market.

For example, when five Texas medical students who commuted weekly to out-of-state medical school complained that the flight them to class fifteen minutes late, Southwest moved the departure time up fifteen minutes. SWA is suitable for this type of customer in the current economic environment.

The Southwest mission statement is unique in that it recognizes the importance of its employees within the broader business strategy, which emphasizes superb customer service and operational efficiency.

Culture Southwest combats employee and customer satisfaction issues directly with a strong culture of customer service.


This was demonstrated when they installed e-leather seats and vertical winglets on the wings of their planes. Lastly, this competency is fairly non-substitutable. For Virgin Group, they have to decide whether one of their over different businesses is a cash cow, a star, a dog, or a question mark.

For example, the cost per average seat mile ASM went up from 7. Instilled with individual freedom, a responsibility to have fun and solve problems Southwest Airlines demonstrates what it means to be a hardy organization.

Porter's generic strategies

There are many new technology initiatives being undertaken currently and some are in the pipeline. Any net premium costs paid related to option contracts are reflected as a component of Other gains losses, net, for both GAAP and non-GAAP including economic purposes in the period of contract settlement.

Yet, for people that do business abroad, flights are essential and seen as a necessity. SWA value suppliers who have the same focus and look internally for ways to improve their processes and service, and willingly pass on cost savings. The profit sharing plan is an example.

Finally, Virgin has a high group of substitutes. There are language barriers, and there could also be barriers some travelers may have to the idea of flying i.

The Advertising Standards Authority ASA instructed them to withdraw the advert in the United Kingdom, saying that it "appeared to link teenage girls with sexually provocative behaviour and was irresponsible and likely to cause serious or widespread offence".

Differentiation strategy is not suitable for small companies.

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CAPA - Centre for Aviation and airline reports Southwest has attempted to pull some ancillary levers in its own, usually more positive way — selling select boarding positions at the gate, tightening flexibility around its most restrictive fares and increasing some other fee revenue.

It means that from the top to bottom everyone does whatever he or she can to satisfy the customer. Examples of firm using a focus strategy include Southwest Airlines, which provides short-haul point-to-point flights in contrast to the hub-and-spoke model of mainstream carriers, United, and American Airlines.

As a result, the true low-cost airline leaders are not SWA but the ultra-budget Spirit Airlines and Allegiant Travel, carriers that squeeze more seats onto their planes by not letting seats recline. They also look for synergies that can be created by entering that market to help its other business ventures.

New Rapids Reward system, 4. Although return on invested capital is commonly used as a measure of capital efficiency, definitions of return on invested capital may differ; therefore, the Company is providing an explanation of its calculation for return on invested capital before taxes and excluding special items in the accompanying reconciliation.

There are several individual examples in this report detailing how these issues are already affecting Virgin, and how they will in the future. Their approach to management is a decentralized decision-making process, with a focus on independent business-level decision-making and responsibility for their own development Keiretsu.

The Virgin Groups performance so far as an industry has been influenced directly by its industry environment factors. In such a situation, Southwest would have to upgrade its facilities, or hire more stewardesses such that one could take a break while the other serves.

Resilience and Hardiness There are three specific attitudes Maddi and Khoshaba describe as being present in groups exhibiting resilience. Potential partnerships with foreign international airlines A recent study by CAPA identified a number of US airports which are currently undeserved by foreign airlines.

Not only would Virgin benefit from controlling its supply chain but since it has ventured into other sectors, it is able to create even more synergy.

Southwest Airlines has the lowest costs and strongest balance sheet in its industry, according to its chairman Kelleher. Also a customer favorite, JetBlue has successfully grown its ancillary revenue through creating products customers value rather than making passengers feel nickel and dimed.

There are between 75 and projects in the works each year supported by approximately IT employees. An example is the success of low-cost budget airlines who, despite having fewer planes than the major airlines, were able to achieve market share growth by offering cheap, no-frills services at prices much cheaper than those of the larger incumbents.

Find the latest business news on Wall Street, jobs and the economy, the housing market, personal finance and money investments and much more on ABC News. IntroductionIn recent years, the entry of low-cost carriers has totally revolutionised the air passenger transport industry.

The low-cost business model was introduced by Southwest. Course Summary Business Strategic Human Resources Management has been evaluated and recommended for 3 semester hours and may be transferred to over 2, colleges and universities.

3. STRATEGIC ANALYSIS OF THE CASE. Southwest Airlines has grown from a small Texas carrier in to the nation's fourth largest airline.

Southwest Airlines Operations – A Strategic Perspective

It is important here to notify that the current section primary analysis the strategic management of Southwest Company before changes in leadership occurred. S.N. Case Title: 1: M-PESA: Kenya's Experiment with Branchless Banking.

2: TOMS: One for One Giving Model: 3: Cadbury's Relaunch of Caramel and Wispa: Reposing faith in Standalone brands? The Blake Project is a strategic brand consultancy with extensive experience helping brands gain an advantage in the mind of the customer. With proven proprietary tools and techniques we help brands break through complex marketing challenges, moving them from brand awareness to brand loyalty - where there are no substitutes.

Southwest airlines case study strategic management
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