Management Government laws and directives that were passedforced Southwest to adjust and even totally revamp their original strategies considerably which proved problematic for them. Regulations on baggage handling, for example, required Southwest to add crews only to meet its turnaround requirements and get away from its cost-savvy plastic boarding passes for purposes of traffic monitoring customers which eventually runs against their strategy of free seats. On a more positive notice, the Wright Amendment, one particular deregulation actions which politically constrained interstate plane tickets out of Love Field, Dallas to areas adjacent to Texas, has been repealed in This made possible a nationwide service for Southwest.
Southwest airlines benefited after the airline deregulation inand were able to lay the groundwork for a successful airline.
Throughout their growth, Southwest differentiated from the competition by taking a friendly, warm and welcoming approach to flying. Their low cost flights undercut the competition, which would fit under the threat of substitutes. Also, their reliability differentiation was the best in the industry until September 11th, which helped to prevent the threat of substitutes.
Suggested Study Questions 1. How does this company make money even when other airlines do not?
What are the most important contributors to its financial success? Southwest Airlines has built its reputation on low cost reliable service. Over their tenure of 30 years in the airline industry, they have demonstrated 30 years of sustainable growth. The reason Southwest has remained financially viable is their commitment through point-to-point service with a quick turn around time.
The more planes in the air and the less time on the ground is a profitably business model. Also, Southwest has tailored to the business traveler who is looking for reliability and less hassles.
Also, Southwest has a generous rapid rewards system that is easy to comprehend and helps retain customer loyalty. In addition, Southwest hires the best people and rewards them accordingly, in a fun, enjoyable atmosphere.
Finally, Southwest negotiates fuel prices for their airlines years in advance allowing the company to keep their pricing consistent. How should management respond to the fact that Southwest Airlines has fallen to next-to-last place among major airlines in on-time performance as of September, ?
Southwest was fortune that it was a strong performer prior September 11th, but many of the security regulations that soon after would be implemented, directly contrast with Southwest primary core competencies.
For instance, Southwest initially had the colored boarding cards, which were generic without passenger names. Due to highest security risk, passenger names had to be cross checked at the gate, causing delays.
Again, this was against new security measures. Also, since many of Southwest passengers did not generally arrive as early as other airlines, more often than not, Southwest passengers would be subject to security searches.
Also, random security searches were being conducted at the gates as well which Southwest actually stepped up to help mitigate delays by hiring more security personnel. Once operations are fully stabilized, would you recommend to the management of the airline that it resume its historic growth rate of from 10?
I would recommend that Southwest continue to grow at 10 to 15 percent per year but no more. Companies such as Wal Mart and McDonalds, if their growth is too large, too quickly, their presence can be filled with resentment from customers because they have pushed out other competition.
At percent growth, airports and cities will still ask for Southwest to expand into their areas, and it will be a slow, calculated and sustainable growth, as opposed to one that moves the company away from its core competencies.
What are the implications for Southwest of the actual or threatened bankruptcies of other major U. Southwest is in a precarious position because they are profitable. Through 30 years of diligence, determination and strategic efforts, Southwest is a very popular and profitable airline.
Southwest Airlines did fairly well as compared to competition. The 30 consecutive years of sustained profitability is a proof of this. The airlines' low turnaround in was at a competitive edge at 24 minutes minutes faster than the entire industry. SouthWest Airlines An Industry Under Siege. Jason Chou-Hong Chen, Ph.D. Visiting Professor, Southwest Airlines in faced a serious of important management decisions after the 9/11 tragedy in order to continue the record breaking company growth that Southwest had experienced since the ’s. flights undercut the competition. Southwest Airlines - An Industry Under Siege Southwest Airlines Southwest Airlines Recent Marketing Practices new topic southwest airlines advertising strategy Southwest Airlines Culture, Mission And Values new topic hbr southwest airlines case study new topic southwest airlines in a different world case analysis Siege Southwest Under .
The trouble is that in the event of a government bailout of other airlines due to bankruptcy, then Southwest is almost hindered because the other airlines will be handed large government checks. The benefit here though to Southwest is the ability they have to continue to be profitable, continue to build investor relations and continue to reward their hard working employees.
Southwest has been fortunate, and although a bailout of other airlines may not seem fair, Southwest still is in the black and has the ability to continue to push forward to gain more market share and continue its excellent track record of profitability.
Southwest used a reservation system, website and check in kiosks was the first airline used ticketless systemSouthwest was able to help counter the challenges posed after September 11th. Southwest was revolutionary in the airline industry in many of their IT developments and were quick to move to the online e-commerce model as far as a reservation system and ticketing.Southwest Airlines An Industry Under Siege Case Solution Weaknesses: The major weakness of the company is that it has limited its target markets to some extent which has .
Southwest Airlines An Industry Under Siege The company's management is faced with long-term questions regarding the rate and manner of growth in the wake of the 9/11 attacks and general industry malaise.
The company's management is faced with long-term questions regarding the rate and manner of growth in the wake of the 9/11 attacks and general industry malaise. Southwest Airlines Success: A Case Study Analysis.
Industry Under Siege. 2. James L. Heskett, Southwest Airlines: An Industry Under Siege. Ad. Mgmt By: Catherine Liman, Wijaya Gondokusumo, Desy Susanto, Aditya Rendyansyah Zahar. SouthWest Airlines An Industry Under Siege.
Jason Chou-Hong Chen, Ph.D. Visiting Professor, Southwest Airlines in faced a serious of important management decisions after the 9/11 tragedy in order to continue the record breaking company growth that Southwest had experienced since the ’s.
flights undercut the competition.