Keep Looking to Improve Southwest Airlines has a track record for being very

Keep looking to improve southwest airlines has a

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Keep Looking to Improve: Southwest Airlines has a track record for being very forward thinking, boosted by a flexible business model that supports rapid change. Keeping the end in mind, Southwest recently acquired AirTran, which has helped it gain market share and expand its services. Southwest always tries to upgrade its fleet of airplanes, looking for lower-cost solutions that can also add more capacity, which will increase its revenue and profit potential. All in all, its Southwest Airlines' competitive advantages gained through its flexible business model that differentiate it from other airlines. Q-2: Identify the distinctive competence and mention the function around which the airlines built distinctive competence. There are many distinctive capabilities of Southwest Airlines that makes it a different and the most successful carrier: 1. They operate 1 type of aircraft Boeing 737, which lowers maintenance, training and inventory costs to a huge extent. 2. They defend aggressively on fuel which allowed them to be profitable when other airlines were losing money, Southwest have maintained a cost per seat mile of $0.12, which is around 25% cheaper than its competitors. 3. They have a strong domestic network. 4. Their philosophy is to treat their employees well and put them ahead of their customers. The benefits it gives it employees, include: profit-sharing and empowering employees to make decisions. The logic is if the employees are valued, they will treat the customers well and that will spread the reputation of the Airlines further. 5. The airline employs a fun and casual work environment. Southwest Airlines is popular for asking its candidates one time to change from suit clothing to Bermuda shorts. Those who were fast enough were selected. 6. No formal hierarchy is enforced. It’s not uncommon to see the pilots assisting the flight stewards in helping them check the passengers in the plane or cleaning the plane. This helps in achieving the swiftest turnaround of the aircraft. 7. It is the only carrier that does not charges any nominal amount for changing the date of the ticket.
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Sensitivity: Internal Q-3: Identify its strategic resources, capabilities & ways of utilizing the skills to transform the resources into distinctive competence. Resources: Southwest Airlines had always managed its resources well including the financial resources. In 2012, Southwest returned $422 million to Shareholders through repurchasing $400 million of common stock (approximately 46 million shares) and distributing $22 million in dividends. It made money every year and earned a Return on Invested Capital (ROIC) of 5.8%. Even in 2008, an awful year for the airline industry it made a profit and earned an ROIC of 4%. By October 2013, Southwest Airlines has a large standardized fleet of 550 of Boeing 737 aircrafts.
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  • Summer '16
  • Southwest Airlines Company, STRATEGIC MARKETING case study

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