In September 2010, Southwest proclaimed it had entered into a definitive agreement to buy all of the outstanding common stock of AirTran Holdings, Inc. You don't have to surrender your individuality to work for Southwest Airlines, work is important don't spoil it with seriousness. Instructors are suggested to use practical application through use of videos, experiential · exercises, and group activities in which learners can share their experiences. Choose and calculate five ratios for this company for the last two years. In 1978, the airline deregulation act enabled airlines to set their own fares and enter or exit routes without government approval Lam, 2003.
Due to intense competition from near-monopoly airlines such as United, Northwest, American Airlines and others, some markets are not cost-effective for Southwest McGregor, 2006. More websites offer competitive rates and special discounts-which if Southwest Airlines does not take immediate action can end up losing customers. As everyone can see, Southwest Airline has been a big success. Also, there is the need that the organization expands its operations to neighboring countries. Learning their mission, vision, and value statements, as well as their stance on perpetuating the culture within the company, it is easy to see that the leadership at Southwest is certainly dynamic. In order to keep their fares low Southwest airlines must keep their costs low. You should not use alternative sources of information on the company, because it is your ability to analyse the case information provided that is being assessed.
Any firm who has valuable and rare resources, and these resources are costly to imitate, have achieved their competitive advantage. Others, through use of flight hubs, are the only ones who can economically serve remote customers. Moreover, it also helps to the extent to which change is useful for the company and also guide the direction for the change. The Ronald McDonald House, a residence provided to families while their children are undergoing treatment for cancer, is supported by each of the local Culture Committees Gittell, 2007. With this winning strategy the company has continued to develop as a strong industry leader. Therefore there must be some resources and capabilities in an organization that can facilitate the competitive advantage to company. As business consultants, we anticipate to pave the way of one of the leading travel industries into becoming the best of the best.
The industry average is 40 minutes while at Southwest the average turnaround time is 15-20 minutes. Where a submission exceeds the stated word limit, the maximum grade awarded will be P1. By starting operations in 1971, Southwest faced from the very beginning harsh competition from incumbent airlines. Southwest is known for their commitment to customer service. Another method used to evaluate the alternatives are the list of pros and cons of each alternative and one who has more pros than cons and can be workable under organizational constraints. A proposal has been made to offer a business class on its longer flights.
It's flush with cash and low on debt. History has shown that it is difficult to find a substitute for Southwest Airlines since they have achieved so well at aligning themselves in such a specific niche. One of the craziest things I found out is that the organization has extended its care and consideration for its workers welfare all the way down to tackling problems within their family. Through this recurrent training, we teach our Employees about current environmental policies and regulations that must be followed in our operations. When a comparatively small, new company is able to take on major players in an extremely competitive industry, gain market share, please customers and employees alike, it is time for others to take notice.
And by that, other airlines may begin copying Southwest's strategies. While we continue to transform our Company with a bold five-year strategic plan that began in 2011, we remain committed to the pillars of our success—outstanding Customer Service; safe, reliable, and efficient operations; and low costs. Strategic management for public accounting. The cost effectiveness adopted by the organization is one that aimed at maintaining standard service delivery, with lean profit generation as a way of breaking into a new market ground. Moreover, the no-frills approach to customer service contributed to the low cost of operations for Southwest. As mentioned, Southwest offers low prices on their airplane tickets. Southwest Airlines has capitalized in cost effectiveness and differentiating its name recognition with patterns of rendering its services as and winning the patronage of its customers.
There may be multiple problems that can be faced by any organization. Southwest Airlines, however, is not without weaknesses. The Vehicle or process that Southwest uses to expand is very methodical and thought-out. And, the outstanding efforts, commitment, and dedication of our People exhibited in 2012 gives me confidence in our ability to successfully execute this plan. Substitute products include the train Amtrak and bus Greyhound which cover long distances.
According to this framework, the closest rival for Southwest would be American Airlines. A project of this scale requires coordinated planning across all functions of a business that you are studying in your Integrated Core classes. It is recommended to read guidelines before and after reading the case to understand what is asked and how the questions are to be answered. Upgrading seats may be a costly venture, but it would open Southwest Airlines to a larger market. As a result and unique in the airline industry, they have maintained 44 years of consecutive profitability. A load factor is the percentage of all available seats on all flights occupied by fare-paying passengers. If Southwest wanted to expand it was pretty easy.
Since Southwest's inception, the major elements of the product offering have been price, convenience and service. The major success to their continued success is due to their low-cost model and competitors are aware that they cannot match Southwest Airlines low prices therefore, by dropping the price even lower; Southwest Airlines can force a company to go bankrupt. The organization was formally promoted and conceptualized by Rollin King, a San Antonio Texas entrepreneur with years of business experience. The creativity and innovation involved in the decisions that they make for the betterment and effectiveness of the company provide a summation of their dedication to the company vision. By these, Southwest were able to offer low price tickets to customers, which was good for the company because most people would prefer to fly without those services mentioned if it meant for cheaper ticket price.
It offers a very comfortable ride with all premium leather seats and plenty of legroom with a young all Boeing 737 fleet. The airlines reputation for greatness and consistency in the economic, political and civil spheres identifies their integrity and continued goal to provide the best service in the industry. Southwest Airlines - The secrets of Southwest's continued success. However, it is clear from the case that dramatic changes within the airline industry are imminent. The industry can use Web sites to publish - in a cost-effective way - public domain documents such as annual reports, product brochures, positions vacant, contact details and other important information. The upper management is at the bottom and supports the front line employees ~35000 , who are the experts.