Abstract
This is a concise case study on the southwest airline. The paper has outlined a number of factors that are fundamental to the success of the company. The paper provides some of the managerial strategies that are most suitable for the company’s survival in the current economic times. At the end of the paper, a justification for the acquisition of LaGuardia airport has been given. This case study has critically analyzed the southwest airline to show its strengths and its potential in the market. In this study, there are different factors that have been identified as the most outstanding factors that have contributed to the unmatched success of the southwest airline. This study has given a clear picture of a competitive and innovative market. The paper seeks to analyze the role of technology and networking in the aviation industry. It also seeks to outline the effects of economic environments on the aviation market.
Case Study Southwest Airlines: In a Different World
Introduction
The air carriers market is a very competitive industry in the world today. This case study analyzes the southwest airline in comparison to other airlines in the industry. The study seeks to outline some of the advantages that makes the southwest airline more successful than its competitors. It also examines the company’s original strategies and how they have changed over the years.
Why has southwest been more successful than its competitors?
After a thorough analysis of the southwest airline, it is very clear that there are deliberate actions that a company needs to take in order to achieve its desired success. The Southwest Airline has over the years been improving its services through very innovative strategies and products as portrayed in the case study. In several instances, the study has highlighted the company’s predicaments as it tried to introduce new innovative products. While the competitors were predominantly interested in making money through maximizing their profit margins, Southwest Airlines adopted a different approach.
The company’s consumer-based approach is one of its major strengths that have contributed to its success. In any business, innovation creates a new advantage giving the business a lead over its competitors (Gittell, 2003). In addition, through innovation a company is more likely to meet the fluctuating consumers’ needs. The founders of Southwest Airlines, Rollin King, Herb Kelleher, and Lamar Muse, understood this fact very well. They literary changed the way the rules that governed air carriers operations as well as how the businesses compete in the market (Gittell, 2003). The success of Southwest Airline is majorly attributed to the innovative nature of its leaders.
The company settles for nothing less than an excellent service delivery to the customers. This includes reduced fares among other advantages. For instance, the creation of new routes to serve a larger percentage of the American people was a risky move driven by the need to satisfy consumers’ needs.
How has the original strategy been altered in the recent years?
Among the most significant strategic alterations is the change in the boarding system that was initiated in 2007 (Heskett, 2013). Justifiably, there were fears that the changes would cause the company its superior trademark, the on-time delivery. Initially, the airline operated on a first-come/first-served basis (Morrison, 2001). However, the management had noticed the dissatisfaction expressed by customers who saw this policy as inferior considering all other airlines had an assigned-seating policy. In fact, the marketing department was unhappy with the boarding process.
Consequently, the need to improve the process began to arise although there were also the fear of such a significant operational change. Another strategic change that has occurred in the recent years is the upgrading of the existing systems. This was necessary in order to transform the network and various operating practices effectively (Heskett, 2013). For instance, the initial system could not accommodate code-sharing with other airlines (Heskett, 2013). Other changes include online booking as wells as the “bags fly free policy”.
How the changes affect the Southwest key success factors
The above changes have had some direct implications on the airline both undesirable and desirable. The changes in boarding for instance compromises the quick boarding procedure which has been a major selling point for Southwest Airline. Many customers felt that the assigned seating policy was an unnecessary change and it would delay the boarding process. Nonetheless, the changes in technology and systems networks allowed the Airline to include planes with a carrying capacity of more than 150 passenger seats (Heskett, 2013).
What factors are under the management control that could go wrong and how can this be prevented?
First and foremost, the decision to change the boarding process is a managerial factor that depends on the leadership decision. There is a probability that the change in the boarding process from a random first-come/first-served policy to an assigned-seat policy can go wrong. Most of the passengers using the southwest airlines routinely are business people. Most of them are always in hurry hence a delay in a single minute is detrimental. Such customers may not like the move and as a result, they may decide to find alternatives.
The on-time characteristic of the southwest airline is the most outstanding business attraction therefore losing it would be very disadvantageous. In the current harsh economic times, it will not be easy for the Southern Airline to maintain its characteristic low fares as it may prefer (Morrison, 2001). As the operating coast inflates, the company might need to review its fares on an upward scale. This will definitely be met with a great protest from the loyal customers and it can easily lead to acute loses. Other factors that are likely to go wrong and which are under the management control include technological advancement, working environment and customers’ satisfaction.
To prevent the effects of the high prices from the supply market, the management must also consider diversifying the company’s products further to cover the rising operating costs. In addition, the management needs to upgrade and utilize the current technologies and modern systems in running the organization. To improve customer satisfaction, the only remedy is through research and implementation of the research findings.
Changes necessary for the southwest leadership structure in response to the current competition and economic factors
The leadership at southwest airlines needs to create a more independent and free environment to the upcoming successors. Retirees should not keep their offices at the headquarters because it makes their predecessors live in an assumption that their actions are under a tight surveillance. Retired workers should remain out of the employee list completely. The management should also pursue employee-focused strategies to improve the morale of the workers and enhance the organizational culture.
LaGuardia airport acquisition
The most prudent move with regard to the acquisition of the LaGuardia airport is to acquire it. This will allow the expansion of Southwest airline’s services in cities where it currently does not serve. This is consistent will the company’s strategic operations. Other benefits that will be realized through this acquisition include financial growth and organizational expansions. Such expansions will give the southwest airline a major say in the air carriers market.
Conclusion
This paper has analyzed the southwest airline case study. The paper has discussed the factors that give the company an advantage over other airlines in the region. Some of the managerial strategies that can be used to manage its operations better have also been suggested.
References
Gittell, H., J. (2003). The Southwest Airlines way: using the power of relationships to achieve high performance. New York, NY: McGraw-Hill.
Heskett, J. (2013). Southwest Airlines: In a Different World. California, CA: Embry Riddle Aeronautical University.
Morrison, S. A. (2001). Actual, adjacent, and potential competition: Estimating the full effect of Southwest Airlines. Journey of transport Economics and policy, 1(1): 239-256.