Southwest Airlines focuses on satisfying employee needs to gain a competitive advantage. It views employees as critical to differentiating the company through high-quality, low-cost service. Southwest works to fulfill employee needs through "LUV" and "FUN" programs to motivate superior performance for customers. This creates value that is then converted to customer and shareholder satisfaction through employee effort, tools, training, and efficient operations. Finally, Southwest's low costs allow it to set prices that capture value for the company and shareholders.

1. SOUTHWEST AIRLINES
A case study linking employee needs satisfaction
& organizational capabilities to competitive
advantage
Prepared By :
Sameer Kumar Sahoo

2. COMPETITIVE STRATEGY
Convert
value
Capture
value
Create
Value

3.  Create value : At southwest management views employees as the
heart of the service delivery system or as a supplier of differentiating the
organization through service level and cost.
 Employee performance has a significant impact on both the quality and
cost of service. Southwest management acts to fulfill employee needs as a
means of creating value through variety of vehicles including luv and fun.
 Convert value : These values are again converted by means of
employee effort towards customer and shareholders satisfaction. For
achieving that they have the tools, training and operating procedure, so
that superior effort deliver superior results
 Capture value : value capture illustrates what portion of value
suppliers, customers, and the firm will ultimately hold. Southwest’s low
cost position enables the airline to set price at a level where it can capture
value for itself and thus its shareholders.

4. SOURCES OF SUCCESS
 “LUV” & “FUN” and respect for the individual.
 Low turnover and high productivity
 Willingness to pay by the passenger by providing higher
level of services.
 Success mantra- “ more for less, not less for
less.”
 Rapid aircraft turn and restriction of services to uncongested
airports

5. FOUNDATIONS
Giving value to employee.
Focus on human resources.
Focusing on four terms:
Willingness to pay
Decreasing the price
Decreasing the cost
Reducing the opportunity cost

6. COMPETITIVE THREATS
 Competitors.
 Protracted periods of higher fuel costs.
 Soft economy - fewer people willing to fly or
business and for pleasure, or less money in
general.
 The worst threats of all - Terrorism on U.S. soil,
FAA grounding LUV's fleet of newer 737's or
some kind of air disaster that either stops
people from flying, or stops them from flying
LUV.