Southwest Airlines is losing its competitive advantage of low costs and customer-focused culture due to growth and competition from airlines like JetBlue. The document analyzes and proposes solutions to address Southwest's issues, including rebuilding employee morale through committees and rewards, implementing a new IT system to improve the customer experience, and shifting from a strictly low-cost to middle-cost strategy to regain market share. The solutions aim to restore Southwest's core values while adapting to changes in technology and competition.

1. John Bruno
Alex Buxo
Tiffany Francois
Consulting Firm B Eli Nichtberger
October 21, 2014

2. ● “Southwest Airlines’ competitive
labor costs, low fares and
unique corporate culture
comprised its best arsenal
against competitors”
● Growth and fierce competition
has caused Southwest to lose
touch with its core values

3. ➢ Southwest is losing its competitive advantage and market share
➢ Airlines like JetBlue offering more amenities at similar fares
➢ Now employing “Profit Boosting Strategy” instead of “Customer
Friendly Strategy”
➢ Shift towards less employee centered culture with the growth of
the company
➢ What can we do to fix this?

4. ➢ To build a HR department that focuses
on restoring and strengthening employee moral
✧ Focus on rebuilding, through starting multiple committees based on
employee moral
✧ Start social groups in the organization based on people whose job
functions are similar
✧ Show employees that we care by offering rewards that recognizes
outstanding work

5. ➢ Rebuilding and implementing a new IT system
✧ Improve The Southwest Airlines Website
✧ Online Costumer Engagement Strategy
✧ Southwest Airlines App
✧ Better Infrastructure for Employees

6. ➢ To change the firms strategy from a low cost
airline to middle cost airline to regain its
competitive advantage.
➢ SWA is only the cheaper option 40% of the time

7. Pros
● Motivates employees to work harder
● Focuses on Corporate original
Mission Statement of keeping
employee happy
● Happy employees are productive,
efficient, and helpful employees
● High morale will drive your staff to
do their best
Cons
● Doesn’t focus on changing times
in Technology
● Having happy employees has
many benefits—but also costs
that can sometimes outweigh
the benefits
● Doesn’t help Southwest deal
with competitors

8. Pros
● Introducing a new technology
decrease costs (Cost
effectiveness)
● Flexibility in adapting to a business
environment in constant flux, so
their IT functions have to respond
quickly to changing demands
● The customer can use SWA’s app
anytime 24x7
Cons
● Relying more on information
technology than
● If employees see new system
they would want to be
compensated as well
● Provide training to employees
on how to use new IT system

9. Pros
● Help Southwest increase the
profit margins
● Put Southwest in better place to
compete for Market shares
● Helps Southwest expand even
more and can complete more
mergers.
Cons
● It could lead to customer relations
problems.
●SWA customers tend to
associate the brand’s image with
low price, and they may be
unable to accept it if the price
goes high
● Employees would feel more
alienated

10. ● Opportunities
o Investment in New Tech
o Acquisition of AirTrain
o Write Amendment Repeal
● Strengths
o Well-known Brand Name
o Low Fare Airline
o Friendly Staff
● Weaknesses
o Change of Leadership
& Culture
o Unreliable Service
● Threats
o Competitors
o Economy

11. ➢ Solves Multiple Problems
✧ Attractive technology will help gain new customers
✧ Provides great customer service through online
help or chat rooms
➢ Solves Problems that Can Occur in Future
✧ It will be easier to adjust to newer technology
✧ Decreasing the workload of employees, equaling
happier employees

12. ➢Features:
✧ New, Easy to Use, Redesigned
Website
✧ Robust Mobile Application
✧ New Confortable Leather Seats
✧ Updated In-Flight Entertainment
Options

13. ➢ Changing an IT system is
costly
✧ Disperse the cost directly to
Customer
✧ Increase average ticket price
by mere 7%
✧ Slight Increase is Well Worth
Customer’s New Experience
Southwest
Airlines
Other
Airlines
Avg Ticket
Price
$163 $366
After increase $174.41 Same

14. ➢ Begin offering rewards for customers
✧ Loyalty Program
✧ 'App-Exclusive’ Promotions
✧ Helps Customers Find Deals Better
✧ 60% of US Owns a Smartphone
✧ Gives Customers incentive to fly
Southwest

15. ➢ Focus on Creating Commission
Incentives with Travel Agents
➢ Unique Influence with Clients
➢ Currently No Domestic Commissions
➢ Only International
➢ Agents Will Book More Clients on
Southwest
➢ Increase Revenue & Market Share

16. THANK YOU!