This document provides a strategic analysis of Southwest Airlines. It begins with an executive summary of the company and the purpose of the report. The body of the report then analyzes Southwest's strategy and competitive position in detail. It examines the external environment, competitive forces, internal strengths and weaknesses. It also evaluates Southwest's low-cost strategy, opportunities for diversification, approach to ethics and sustainability. Recommendations are provided throughout to enhance Southwest's strategic management.
This was a research project that our Business Strategy class completed in 2007. This is an evaluation of Southwest Airlines and its position in the market. We evaluated growth and future prospects with a heavily consolidating industry.
This presentation encompasses the classic case study of Southwest Airlines, USA.
Explaining why they have been so successful even in recession period.
It is a part of case-study based lectures at Symbiosis Institute of Business Management, Bangalore.
Southwest Airlines Co. (NYSE: LUV) is an American low-cost airline. The airline has its headquarters on the grounds of Dallas Love Field in Dallas, Texas.
Southwest is the largest airline in the world by number of passengers carried per year (as of 2009) Southwest maintains the third-largest passenger fleet of aircraft among all of the world's commercial airlines. As of May 3, 2009, Southwest operates approximately 3,510 flights daily.
Southwest Airlines has carried more passengers than any other U.S. airline since August 2006 for combined domestic and international passengers according to the U.S. Department of Transportation's Bureau of Transportation Statistics. Southwest Airlines is one of the world’s most profitable airlines, posting a profit for the 37th consecutive year in January 2010.
This presentation is made by a group study in strategic management class. This file presenting about Air Asia x and their strategic management.
Group Member: Grace, Onny, Sheby
IMBA CLASS. National Kaohsiung University of Science and Technology.
Southwest Airlines in 2014: Culture, Values, and Operating PracticesTran Thang
This Presentation answer these questions:
1. Is there anything that you find particularly impressive about Southwest Airlines?
2. What grade would you give Southwest management for the job it has done in crafting the company’s strategy? What is it that you like or dislike about the strategy? Does Southwest have a winning strategy?
3. What are the key policies, procedures, operating practices, and core values underlying Southwest’s efforts to implement and execute its low-cost/no frills strategy?
4. What are the key elements of Southwest’s culture? Is Southwest a strong culture company? Why or why not?
5. What grade would you give Southwest management for the job it has done in implementing and executing the company’s strategy? Which of Southwest’s strategy execution approaches and operating practices do you believe have been most crucial in accounting for the success that Southwest has enjoyed in executing its strategy? Are there any policies, procedures, and operating approaches at Southwest that you disapprove of
or that are not working well?
6. What weaknesses or problems do you see at Southwest Airlines as of mid-2014?
7. Do you approve of the AirTran acquisition and the way that Southwest has gone about integrating AirTran
into its operations? Is the integration taking too long? Why go so slow?
This was a research project that our Business Strategy class completed in 2007. This is an evaluation of Southwest Airlines and its position in the market. We evaluated growth and future prospects with a heavily consolidating industry.
This presentation encompasses the classic case study of Southwest Airlines, USA.
Explaining why they have been so successful even in recession period.
It is a part of case-study based lectures at Symbiosis Institute of Business Management, Bangalore.
Southwest Airlines Co. (NYSE: LUV) is an American low-cost airline. The airline has its headquarters on the grounds of Dallas Love Field in Dallas, Texas.
Southwest is the largest airline in the world by number of passengers carried per year (as of 2009) Southwest maintains the third-largest passenger fleet of aircraft among all of the world's commercial airlines. As of May 3, 2009, Southwest operates approximately 3,510 flights daily.
Southwest Airlines has carried more passengers than any other U.S. airline since August 2006 for combined domestic and international passengers according to the U.S. Department of Transportation's Bureau of Transportation Statistics. Southwest Airlines is one of the world’s most profitable airlines, posting a profit for the 37th consecutive year in January 2010.
This presentation is made by a group study in strategic management class. This file presenting about Air Asia x and their strategic management.
Group Member: Grace, Onny, Sheby
IMBA CLASS. National Kaohsiung University of Science and Technology.
Southwest Airlines in 2014: Culture, Values, and Operating PracticesTran Thang
This Presentation answer these questions:
1. Is there anything that you find particularly impressive about Southwest Airlines?
2. What grade would you give Southwest management for the job it has done in crafting the company’s strategy? What is it that you like or dislike about the strategy? Does Southwest have a winning strategy?
3. What are the key policies, procedures, operating practices, and core values underlying Southwest’s efforts to implement and execute its low-cost/no frills strategy?
4. What are the key elements of Southwest’s culture? Is Southwest a strong culture company? Why or why not?
5. What grade would you give Southwest management for the job it has done in implementing and executing the company’s strategy? Which of Southwest’s strategy execution approaches and operating practices do you believe have been most crucial in accounting for the success that Southwest has enjoyed in executing its strategy? Are there any policies, procedures, and operating approaches at Southwest that you disapprove of
or that are not working well?
6. What weaknesses or problems do you see at Southwest Airlines as of mid-2014?
7. Do you approve of the AirTran acquisition and the way that Southwest has gone about integrating AirTran
into its operations? Is the integration taking too long? Why go so slow?
Lead Humbly: The Path of Servant Leadership Lindy Ryan
This presentation was created for and delivered to attendees of the 6th Annual University of Colorado CUGold Leadership Conference.
http://umc.colorado.edu/studentlife/cugold/leadershipconf
Servant Leadership Principles - Fostering a Culture of AgilityLen Lagestee
The phrase “servant leadership” is frequently used when current leadership styles (typically command-and-control) clash with an emerging culture of empowerment and self-organization. “We need our leaders to embody servant leadership” is a comment I recently heard. But what is servant leadership? Do people really know what they are asking for?
Let's take a look at a few of the principles from the book Servant Leadership by Robert Greenleaf.
The 15 Most Common Body Language MistakesBernard Marr
Body language matters. Our brain relies on snap judgements to categorize another person and predict whether they are trustworthy, threatening, competent, likeable, etc. Here are the top 15 body language blunders to watch out for.
Southwest airlines: Organizational Development 13
Southwest Airlines: Organizational Development
Name
University
Course
Date
Running head: Southwest Airlines: Organizational Development
1
Southwest Airlines
Organization development is ways in which company strategies aiming at overall organization’s efficacy. The cut-throat competition of the current times in the service industry has made it important for all the service organizations to launch innovative strategies, taking into consideration the processes, people and the physical evidence that can differentiate their services from their main competitors (Rothwell & Sullivan, 2005).
This study will present different approaches that are responsible for the development of the Southwest Airlines Company. For any organization to achieve its objectives there must be essential strategies that are put in place to ensure its development. Various approaches aimed at organizational development should be formulated by the management and then implemented towards the process of staff management.
The main objective of this paper is to highlight the relevant strategies of Southwest Airlines that has helped it to produce a successful business model in the airline industry that became a benchmark for others to follow. The aim of this paper is to establish that if a firm gives significance to its employees, it is better able to serve its customers as the employees will perform better and provide up to the mark services.
Southwest airlines are considered a major airline in the United States of America and are the world’s low-cost airline with it’s headquarter located in Dallas. In July 2016 the company’s media website that the airline is operating with more than 50,000 employees and around 3,900 departures in one day when the traveling season is at its peak (Swamedia, 2016).
The same data suggest that the airline has services to more than 98 destinations in the country and more than seven in foreign countries with the service provisions to three main airports in Cuba are expected to begin its business operations this year in 2016 (Swamedia, 2016). The airline is considered to be the largest operator of the Boeing 737 aircraft across the world and more than 700 are still operational. This makes an average of six Boeing 737 flights per day.
Factors that have contributed to the development of the southwest airlines
The Southwest Airline is an outstanding example of a service organization that has clearly defined its main purpose of the business; is persistent upon its business values and the attitudes derive from the business purposes and design the correct business model that is able to support the purpose of the business. The Southwest Airlines promises its customer its dedication to providing the highest quality to its customers and equally good customer service which is delivered with individual pride, perfect spirit, hospitable behavior and warmth in order to deliver their promised service to .
Milestone Two Components 2, 3, and 4In task 4-2, you will provi.docxannandleola
Milestone Two: Components 2, 3, and 4
In task 4-2, you will provide answers to the Components 2, 3, and 4 assignment questions.
Component 2: External Environment and Competitive Position
Complete an industry analysis and a five forces model analysis including an assessment of the company's closest rival. Be sure to answer the following questions:
-What are the driving forces of change in the industry in which your company competes? How has your company changed its strategy to address driving forces?
-Where does the company stand within the industry based on the five forces model of competition analysis?
-Which of the five forces exert the most pressure on the company? What has the company done to relieve this pressure?
-What are your recommendations to further reducing pressure from these forces?
Component 3: Internal Environment and Competitive Position
Complete a SWOT analysis and a value chain analysis of the company you have chosen. Be sure to answer the following questions:
-How well has the company performed to stated strategic objectives or performance targets? Support your assessment with factual data.
-Compare the strengths, weaknesses, opportunities, and threats of the company to those of its competitors. How do the vision and values affect how the company will respond to each?
-What is the core competency of the company? How does this affect its standing within the industry?
-How has the company used its value chain activities to improve its competitive position?
-What are your recommendations in regard to the company’s competitive position and value chain activities?
Component 4: Competitive Strategy
Summarize the generic strategy employed by the company and how it helps the company achieve sustained competitive advantage.
-Which of the generic competitive strategy options is your company pursuing?
-Explain how your company is pursuing this generic strategy. How does it fit value chain activities specifically to support its generic strategy?
-How does pursuit of this strategy help your company achieve sustained competitive advantage?
-What are your recommendations in regard to the company's pursuit of a generic strategy or how it uses its value chain in this pursuit?
Milestone Three: Components 5 and 6
In task 6-2, you will provide answers to the Components 5 and 6 assignment questions.
Component 5: Strengthening Competitive Position
-Summarize how the company strengthens its generic strategy through complementary strategic moves. Be sure to answer the following questions:
-Outline what the company has done to fit its strategy to the industry and company situation.
-Has your company responded offensively or defensively, or both, to improve its strategic position? How?
-Has your company pursued complementary strategic options? Explain your answer.
-What are your recommendations for your company to pursue future complementary strategic options to strengthen its competitive position.
Component 6: The Global Marke ...
Singapore Airlines Case Study(student paper)Singapore A.docxmaoanderton
Singapore Airlines Case Study
(student paper)
Singapore Airlines was created in 1972 following a separation from Malaysian Airlines. In the wake of reorganization, Singapore Airlines undertook aggressive growth, investing and trading to maximize profitability and expand market share. Through this change, a new company philosophy emerged, “Success or failure is largely dictated by the quality of service it provides” (Wyckoff, 1989). By reinventing the company infrastructure and introducing new initiatives focused on excellence in customer service, Singapore Airlines became a global leader in the service industry, elevating existing standards among competitors. Evaluation of Workforce Management Program
The strategy widely utilized by Singapore Airlines to ensure differentiation in an increasingly competitive market was its attention to in-flight service. “Good flight service [was] important in its own right and is a reflection of attention to detail throughout the airline” (Wyckoff, 1989). This statement perpetuated the belief that excellence in service was directly tied to the careful selection and individual performance of in-flight crews charged with the responsibility of fulfilling the needs of individual passengers and exuding the levels of service demanded by the organization. Applicants destined to work as flight stewards were drawn from a very young population, typically spanning the ages of 18-25 years of age with high school equivalency against the English system of education. Selection of applications was competitive largely due to the degree of skill, poise, and experience required of its candidates. These policies led to the on-boarding of a highly skilled and youthful workforce with positive attitudes and a willingness to be trained. Critique of this approach revealed several disadvantages. The most significant being the potential for greater turnover when hiring a younger population as opposed to an older, more experienced crew. Experience alone would play some role in the development of new employees, as greater experience would bring greater poise and confidence. However, in light of the predominant population Singapore Airlines catered to, a younger in-flight crew would remedy the awkwardness likely to be encountered by older clients being served by older crew members. In addition, a younger crew would likely be more accepting of new procedures and less cynical of the requirements of employment.
In light of the young demographic most desired in this role, recruitment, training and “conversion” processes were both stringent and comprehensive. All aspects of in-flight service, including training related to terminology, amenities and food preparation were provided in great detail, as were training for emergency preparedness and response to every potential scenario encountered in the air and on the ground. Formalized on-boarding, training and continued development were the hallmarks of the comprehensive workforce program. Even .
SouthWest
SouthWest
Company name, website and industry
The company I would be analyzing is Southwest Airlines which operates in the Airline industry. The website of the company is https://www.southwest.com.
Background and history of southwest Airlines
Southwest Airlines was founded in 1967 and it stands as the premier low-cost air carrier in the United States. The company was incorporated by Rollin King and Herb Kelleher on March 16, 1967 (Lauer, 2010). As of 2013, the company had a fleet of 579 planes and flies between eighty-nine destinations. It has the reputation of being the highest utilized airline by American citizens for domestic flights with an operation of about 3,400 flights each day. In 2012, the company had an annual revenue of $17 billion (Hill & Jones, 2013). Its current chief executive officer is Gary C. Kelly who has received several honors, including being the best CEO in the US for 2008, 2009 and 2010 (Hill & Jones, 2013).
Analysis of Southwest Airlines using Porter’s Five Forces Model
Competitive rivalry-High. Southwest Airline’s direct competitors comprise of six major low-carriers operating in the domestic market with similar services such as Delta Air Lines, American Airlines, United Continental Holdings, JetBlue Airways, US Airways Groups and Allegiant Travel. This offers a strong competition., considering their operation in the domestic market and provision of similar competitive packages such as low-cost flights (Flouris & Oswald, 2016).
Threat of new entrants-Moderate. New low cost Airline firms could enter the industry and attract customers. As much as entry into the market is minimized by the huge capital investments required for venturing into the industry, there are no barriers to entry (Flouris & Oswald, 2016).
Bargaining power of suppliers-High. Planes suppliers in the industry include Airbus and Boeing. Supply of fuel in the Airline industry is extremely volatile and unpredictable. This makes the bargaining power of suppliers high.
Bargaining power of buyers-High. Most of the competitors or low cost carriers in the industry offers similar services and limited differentiation. Buyers have a high bargaining power due to availability of alternatives with similar benefits. In order to address the high buyers’ bargaining power, the company can decide on less cancelations, lower price, fewer delays and more amenities (Flouris & Oswald, 2016).
Threat of substitutes-Low. Alternative means of transport such as vehicles, ship and train do not significantly compete with air transport owing to their high speed, comfort and time savings.
Strategy used
Michael Porter presented generic strategies that can be employed by a company to overcome the five forces and accomplish competitive advantage. The first strategy presented is the overall cost leadership which is based on creating a low-cost.
Singapore Airlines Case Study(Student paper)Singapore Airlines.docxmaoanderton
Singapore Airlines Case Study
(Student paper)
Singapore Airlines was created in 1972 following a separation from Malaysian Airlines. In the wake of reorganization, Singapore Airlines undertook aggressive growth, investing and trading to maximize profitability and expand market share. Through this change, a new company philosophy emerged, “Success or failure is largely dictated by the quality of service it provides” (Wyckoff, 1989). By reinventing the company infrastructure and introducing new initiatives focused on excellence in customer service, Singapore Airlines became a global leader in the service industry, elevating existing standards among competitors.Evaluation of Workforce Management Program
The strategy widely utilized by Singapore Airlines to ensure differentiation in an increasingly competitive market was its attention to in-flight service. “Good flight service [was] important in its own right and is a reflection of attention to detail throughout the airline” (Wyckoff, 1989). This statement perpetuated the belief that excellence in service was directly tied to the careful selection and individual performance of in-flight crews charged with the responsibility of fulfilling the needs of individual passengers and exuding the levels of service demanded by the organization. Applicants destined to work as flight stewards were drawn from a very young population, typically spanning the ages of 18-25 years of age with high school equivalency against the English system of education. Selection of applications was competitive largely due to the degree of skill, poise, and experience required of its candidates. These policies led to the on-boarding of a highly skilled and youthful workforce with positive attitudes and a willingness to be trained. Critique of this approach revealed several disadvantages. The most significant being the potential for greater turnover when hiring a younger population as opposed to an older, more experienced crew. Experience alone would play some role in the development of new employees, as greater experience would bring greater poise and confidence. However, in light of the predominant population Singapore Airlines catered to, a younger in-flight crew would remedy the awkwardness likely to be encountered by older clients being served by older crew members. In addition, a younger crew would likely be more accepting of new procedures and less cynical of the requirements of employment.
In light of the young demographic most desired in this role, recruitment, training and “conversion” processes were both stringent and comprehensive. All aspects of in-flight service, including training related to terminology, amenities and food preparation were provided in great detail, as were training for emergency preparedness and response to every potential scenario encountered in the air and on the ground. Formalized on-boarding, training and continued development were the hallmarks of the comprehensive workforce program. Even wel.
Running head SUN COUNTRY AIRLINES1SUN COUNTRY AIRLINES 4.docxtoltonkendal
Running head: SUN COUNTRY AIRLINES 1
SUN COUNTRY AIRLINES 4
Sun Country Airlines
Deb Grace
Rasmussen College
Author Note
This paper is being submitted on April 23, 2016, for Elle Okeeffe’s B460 Strategic Management course.
Sun Country Airlines
Organizational success depends on the development of strategic objectives that meet the organizational needs. In this case, organizations should come up with strategies with a high consideration of the prioritized organizational needs. When done, corporate stakeholders such as the employees will feel and understand the significance of their implementation in their organization (Cole, 1997). However, not all the implementation of strategies always proves successful in an organization. For instance, incidences of poor communication, lack of an effective leadership style, and misalignment between the strategy being implemented and organizational objectives contribute to it. Therefore, this paper offers an analysis of the poor strategic implementation of drug testing policy in Sun County Airlines that made it incur a fine of $115, 0000.
Sun County Airlines is one of the airline companies that provide passenger and cargo transport services to its clients. Its flights operate various destinations including Mexico, US, Costa, and Cuba starting in 2015. Since its start, the company has grown to attract significant market attention, its performance and competitiveness in the airline industry. The success of Sun Country Airline depends on the implementation of various policies that ensure customer safety and their satisfaction. Among the policies that the company should uphold include performing drug and alcohol test to its crew before they execute their activities. According to the international aviation standards, this ensures that those involved in the aviation industry do not perform their actions under the influence of alcohol or any other drug. Besides, the Federal Aviation Administration (FAA) demands that all airline companies perform a drug test on all the employees it hires or before transferring them to safe zones. It also requires that random screening done in the company should incorporate at least a pilot (United States, 2008). As a result, all the companies involved in this industry should abide by this rule by formulating the desired strategic actions.
Sun Country Airlines has policies that are in alignment with the above obligations stated by the FAA. However, its implementation seems to be a challenge because the company was fined $115, 0000 by FAA for failing to abide by them. According to FAA, Sun County Airlines violated the policy by failing to conduct pre-test drug test on new employees it hired before allowing them to safe positions that are sensitive in the aviation sector. Besides, it also transferred an employee to a safe, sensitive zone 180 days after drug test was done. Finally, FAA found that the airline company did not include a pilot in its random screening ...
Singapore Airlines Case Study(Student paper)Singapore Airlin.docxaryan532920
Singapore Airlines Case Study
(Student paper)
Singapore Airlines was created in 1972 following a separation from Malaysian Airlines. In the wake of reorganization, Singapore Airlines undertook aggressive growth, investing and trading to maximize profitability and expand market share. Through this change, a new company philosophy emerged, “Success or failure is largely dictated by the quality of service it provides” (Wyckoff, 1989). By reinventing the company infrastructure and introducing new initiatives focused on excellence in customer service, Singapore Airlines became a global leader in the service industry, elevating existing standards among competitors.Evaluation of Workforce Management Program
The strategy widely utilized by Singapore Airlines to ensure differentiation in an increasingly competitive market was its attention to in-flight service. “Good flight service [was] important in its own right and is a reflection of attention to detail throughout the airline” (Wyckoff, 1989). This statement perpetuated the belief that excellence in service was directly tied to the careful selection and individual performance of in-flight crews charged with the responsibility of fulfilling the needs of individual passengers and exuding the levels of service demanded by the organization. Applicants destined to work as flight stewards were drawn from a very young population, typically spanning the ages of 18-25 years of age with high school equivalency against the English system of education. Selection of applications was competitive largely due to the degree of skill, poise, and experience required of its candidates. These policies led to the on-boarding of a highly skilled and youthful workforce with positive attitudes and a willingness to be trained. Critique of this approach revealed several disadvantages. The most significant being the potential for greater turnover when hiring a younger population as opposed to an older, more experienced crew. Experience alone would play some role in the development of new employees, as greater experience would bring greater poise and confidence. However, in light of the predominant population Singapore Airlines catered to, a younger in-flight crew would remedy the awkwardness likely to be encountered by older clients being served by older crew members. In addition, a younger crew would likely be more accepting of new procedures and less cynical of the requirements of employment.
In light of the young demographic most desired in this role, recruitment, training and “conversion” processes were both stringent and comprehensive. All aspects of in-flight service, including training related to terminology, amenities and food preparation were provided in great detail, as were training for emergency preparedness and response to every potential scenario encountered in the air and on the ground. Formalized on-boarding, training and continued development were the hallmarks of the comprehensive workforce program. Even we ...
Strategic Management presentation from MBA program, looking at several potential avenues that Southwest Airlines could consider to generative additional revenue. Interestingly, the airline has gone on to implement a few of the ideas we generated.
Southwest History and GrowthCorporate Level Strategy.docxrafbolet0
Southwest History and Growth
Corporate Level Strategy
Mission and Goal
Southwest has its mission statement since January 1988 as following: “The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit”. The company uses a welcoming approach to deal with customers and employees, utilizing great customer service to deliver the best the industry can have. Therefore, to differentiate itself from other airlines, Southwest places a large dedication to its employees, giving them authority to make the necessary decisions to better assist customers with all the comfort needed. This strategy is key for Southwest to provide respect and loyalty for customers.
By following a simple goal: “A primarily short-haul airline that flies directly from city to city, with just one type of plane - the Boeing 737 - and the lowest costs”, Southwest has its horizon set, making sure to deliver a good service that excise “luxurious” rivals to gather market share, increasing profitability customer value.
Short/Medium-Haul
Southwest Airlines has their strategy focused on short/medium flights across the U.S. They participate in an extremely competitive market, where airlines are constantly hunting for competitor’s market share. Southwest uses different approaches to differentiate itself from the market. By providing good customer service, quick airplane turnovers, no baggage fees, low tickets price, efficient operations, and a great work environment, the company is able to maintain airplanes capacity in desired levels.
Connecting airports with a point-to-point strategy has allowed Southwest to provide service at lower costs. The choice of only using Boeing 737s, and training all the personnel to turnover the airplane in a fast and efficient manner, brings efficiency and pleasure to customers that enjoy a wider range of flight times.
Customer Service
Southwest’s hiring process is one of the strongest points that the company has been focusing to deliver superior satisfaction to customers. Employees are not only assessed on their qualifications and experience, but also on the attitudes they bring to their positions (Campbell, 2010). The process concentrates on prospective employees that fit the service culture of the company. This procedure ensures Southwest that when their newly trained personnel is out to perform, they will create constructive relations to customer requests based on their excellent abilities and passion to work. Southwest believes that training is important and crucial to deal with demands on ground, but abilities and high-class social skills are top-not on the company’s preferences.
By providing an example of what means to be “customer oriented”, Southwest delivers a sense of a friendship that can be perceived by their workforce. The company takes different approaches to support that mentality. Clients receive birthday cards and event inv.
This book examines how Southwest Airlines, the largest carrier of passengers in the largest market in the world has become the envy of financial performance, customer, and employee satisfaction for the airline industry. For those of us who are involved in Organization Development or Human Resources and toil under the belief that people make a bottom line difference, this is our book. For leaders this is also your book, the lessons learned at Southwest are transferable not only to the airline industry but to any industry. A word of caution, the book is based on an academic/statistical study of the airline industry and reported more as an academic treatise than a captivating book. Don't let the style of writing get in the way of the important message:
Southwest's most powerful organizational competency--the "secret ingredient" that makes it so distinctive--is its ability to build and sustained high performance relationships among managers, employees, unions, and suppliers. These relationships are characterized by shared goals, shared knowledge, and mutual respect.
Over time Southwest Airlines has developed 10 organizational practices to facilitate coordination among 12 distinct functions: pilots, flights attendants, gate agents, ticketing agents, operations agents, ramp agents, baggage transfer agents, cargo agents, mechanics, fuelers, aircraft cleaners, and caters by building relationships of shared goals, shared knowledge, and mutual respect. The heart of this book is the description of these 10 practices and how managers in any setting can implement them to improve their business performance.
NRS-451V Singapore Airlines Case Study(Student paper)Si.docxcherishwinsland
NRS-451V Singapore Airlines Case Study
(Student paper)
Singapore Airlines was created in 1972 following a separation from Malaysian Airlines. In the wake of reorganization, Singapore Airlines undertook aggressive growth, investing and trading to maximize profitability and expand market share. Through this change, a new company philosophy emerged, “Success or failure is largely dictated by the quality of service it provides” (Wyckoff, 1989). By reinventing the company infrastructure and introducing new initiatives focused on excellence in customer service, Singapore Airlines became a global leader in the service industry, elevating existing standards among competitors.Evaluation of Workforce Management Program
The strategy widely utilized by Singapore Airlines to ensure differentiation in an increasingly competitive market was its attention to in-flight service. “Good flight service [was] important in its own right and is a reflection of attention to detail throughout the airline” (Wyckoff, 1989). This statement perpetuated the belief that excellence in service was directly tied to the careful selection and individual performance of in-flight crews charged with the responsibility of fulfilling the needs of individual passengers and exuding the levels of service demanded by the organization. Applicants destined to work as flight stewards were drawn from a very young population, typically spanning the ages of 18-25 years of age with high school equivalency against the English system of education. Selection of applications was competitive largely due to the degree of skill, poise, and experience required of its candidates. These policies led to the on-boarding of a highly skilled and youthful workforce with positive attitudes and a willingness to be trained. Critique of this approach revealed several disadvantages. The most significant being the potential for greater turnover when hiring a younger population as opposed to an older, more experienced crew. Experience alone would play some role in the development of new employees, as greater experience would bring greater poise and confidence. However, in light of the predominant population Singapore Airlines catered to, a younger in-flight crew would remedy the awkwardness likely to be encountered by older clients being served by older crew members. In addition, a younger crew would likely be more accepting of new procedures and less cynical of the requirements of employment.
In light of the young demographic most desired in this role, recruitment, training and “conversion” processes were both stringent and comprehensive. All aspects of in-flight service, including training related to terminology, amenities and food preparation were provided in great detail, as were training for emergency preparedness and response to every potential scenario encountered in the air and on the ground. Formalized on-boarding, training and continued development were the hallmarks of the comprehensive workforce program.
Running Head Americans Airlines Work Force 2020 .docxjoellemurphey
Running Head: Americans Airlines Work Force 2020 2
Americans Airlines WorkForce 2020
Course Name & Number
Instructor Name
College Name
Student Name
Date
Workforce 2020
Workforce 2020 is an analysis based on the future and predictive model that will assist in increasing the latest trends in the workforce providing more vital opportunities to many people. Technical advancements and globalization are altering the way in which organization is structured, and will be creating a higher demand for low traditional and high working flexibility adjustments. With the access of the interest and the requirements of the employees will be surveyed for building more safety, security and satisfactory environment (American Airlines, 2012).
Describe the organization you have chosen. Please include the name and a short description of the organization’s products or services.
The organization that I have chosen is American Airlines.American Airlines, Inc is a famous United States airline. It works on a wide international and domestic U.S network, with timed flights all over America, and the Caribbean, Asia, and Europe. American Airlines is an airline member of the One World airline alliance and thus coordinates on the fares and services. American Airlines has got into a partnership with various carriers from the year of its founding, 1930. (American Airlines, 2012).
How does the organization motivate its employees? Describe any programs or methods they use to motivate workers. If the organization does not have any employee motivational strategies, suggest some strategies that you think will be effective.
A key way in which American Airlines is likely to motivate employees in order to achieve its goals for the Airlines Grouplies with keeping track of its employee’s needs and their engagement with their work. This can only be possible by effective wage rate, which means the employees should get sufficient salary that can maintain their healthy living with justifies the hard work that is done by them for enabling the company to attain the achievable and destined development or goal. Thus, these American Airlines takes proper care of the low employee engagement that includes salary, beneficiaries, and workload. (Ahles, 2012).
Describe the current state of the organization’s workforce dynamic. Is its workforce growing? Is it changing? How is it changing and why?
The current state is considered to be highly valuable by American Airlines Inc. Globalization has led the large organizations to prosper competing the other organizations of their industry. American Airlines Inc. requires those professional managers and executives who can understand the need for globalization in the company for leading the competitive market. American Airlines Inc was capitalized the future in the global market until they brought strategic alteration. But American Airlines Inc. cannot be c ...
Similar to Strategic Analysis - Southwest Airlines Co. (20)
Running Head Americans Airlines Work Force 2020 .docx
Strategic Analysis - Southwest Airlines Co.
1. Strategic Analysis: Southwest Airlines Co.
Shekera Alvarado
MBA 700: Strategic Management
Southern New Hampshire University
2. Running Head: STRATEGIC ANALYSIS 2
Executive Summary
Southwest Airlines Co. is a major airline company based in the United States.
Established in 1967 and operating within the national and international airline markets,
Southwest Airlines is known for providing low-cost options to its customers, and striving for un-
matched customer service (Kelly, n.d.).
As a consultant to Southwest Airlines, the following report offers an in-depth look at the
strategy and corporate management of the company. Based on detailed research, the
recommendations provided throughout the report should be used to enhance the existing strategic
management offerings for Southwest Airlines.
3. Running Head: STRATEGIC ANALYSIS 3
Contents
Executive Summary........................................................................................................................ 2
Strategy & Strategic Management Process..................................................................................... 5
Strategy within the Airline Industry ....................................................................................... 5
External Environment & Competitive Position.............................................................................. 6
Driving Forces of Change....................................................................................................... 6
Five Forces Model of Competition......................................................................................... 7
External Environment Recommendations .............................................................................. 8
Internal Environment & Competitive Position ............................................................................... 8
SWOT Analysis ...................................................................................................................... 8
Core Competencies & Value Chain Activities ..................................................................... 10
Internal Environment Recommendations ............................................................................. 11
Competitive Strategy .................................................................................................................... 11
Low-cost Generic Competitive Strategy............................................................................... 11
Competitive Strategy Recommendations.............................................................................. 12
Strengthening Competitive Position ............................................................................................. 13
Generic Strategy.................................................................................................................... 13
Complementary Strategic Option ......................................................................................... 13
Competitive Position Recommendations.............................................................................. 14
The Global Marketplace ............................................................................................................... 14
Corporate Strategy: Business Diversification............................................................................... 15
Diversification Strategy ........................................................................................................ 15
Diversification Future Proposal............................................................................................ 16
4. Running Head: STRATEGIC ANALYSIS 4
Ethics, Social Responsibility, & Environmental Sustainability.................................................... 16
Ethics..................................................................................................................................... 17
Social Responsibility ............................................................................................................ 18
Sustainability......................................................................................................................... 18
Strategy Execution: Building the Capability to Execute Strategy................................................ 20
Internal Strategy Execution................................................................................................... 20
Strategy Execution: Managing Internal Operations...................................................................... 21
Best Practices at Southwest .................................................................................................. 21
Strategy Execution: Leadership .................................................................................................... 22
Leadership Recommendations.............................................................................................. 22
5. Running Head: STRATEGIC ANALYSIS 5
Strategy & Strategic Management Process
Strategy within the Airline Industry
Southwest Airlines Co.’s CEO, Gary Kelly said it best, “I LUV this time of year—
looking forward to what’s on the horizon and planning to accomplish the goals and resolutions
that we set for ourselves” (Kelly, n.d.). As a company that is constantly evolving, Southwest
Airlines Co. is always trying to strive for their ultimate mission of providing the “highest quality
of customer service delivered with a sense of warmth, friendliness, individual pride, and
company spirit” (Southwest Airlines Co., 2013). With this winning strategy the company has
continued to develop as a strong industry leader.
Southwest has been able to prove adherence to their mission, vision, and value statement
time and time again. This constant evolution of positive developments for the company has and
always will include one of the most important aspects of a successful company – training for
their employees. As Blanchard discussed, a vital part of an employee friendly workplace means
providing them with “high impact training programs. These need to be aligned with specific,
measurable goals that are fully supported and in alignment with organizational objectives”
(Blanchard, 2007). With that, in 1998, a brand new $10 million flight operations training center
opened as the “key element of Southwest’s flight training services for its more than 2,600 pilots”
(Southwest Airlines, 1998). On average the training center will properly train and process 250
new pilots per year, in addition to the pilots who are currently on staff and gain an additional
1,000 hours of training throughout their careers (Southwest Airlines, 1998). If the description
itself is not already an indication, Southwest’s vice president of flight operations, Paul Sterbenz
states “this state-of-the-art training center makes Southwest well-equipped to handle the flight
6. Running Head: STRATEGIC ANALYSIS 6
operations training needs of the airline well into the next century” which positions the company
in a favorable light given the tumultuous history of air travel.
This is definitely an example of positive development as this strong growth and
development is a result of their mission to build sustainable value and hold true to their strategic
objectives. “Firms build sustainable value by actively engaging stakeholders in the decision-
making process, and by doing it earlier rather than later” (Bansal, 2005). Throughout the
research and planning stages of this training facility project, the company made a vital point of
gleaning input from the training center’s own future staff members; the goal of course to make it
as user-friendly and practical as possible (Southwest Airlines, 1998).
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.
External Environment & Competitive Position
Driving Forces of Change
Some of the driving forces of change in the industry in which Southwest Airlines
competes include socioeconomic forces and regulatory forces (Rodrigue, 2009). Socioeconomic
forces such as aggregate demand for goods and service and regulatory forces such as operational
costs including oil for airplane fuel is a force that Southwest Airlines deals with on a daily basis.
Soaring fuel costs and a very soft economy have forced many airlines to cut back on flights,
increase costs to their customers in every facet of their operations, lay off thousands of workers
and, in some cases, go out of business entirely. While this is taking place all around the globe,
Southwest Airlines continues to be successful and has just posted its 69th consecutive quarterly
7. Running Head: STRATEGIC ANALYSIS 7
profit” (Southwest Airlines Reports First Quarter Results, 2012). This is due to their strategy of
added value. 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.
Five Forces Model of Competition
The Five Forces Model of Competition framework “holds that competitive pressures on
companies within an industry come from five sources. These include (1) competition from rival
sellers, (2) competition from potential new entrants to the industry, (3) competition from
producers of substitute products, (4) supplier bargaining power, and (5) customer bargaining
power” (Thompson, Peteraf, Gamble, & Strickland III, 2015). In order to determine the nature
and strength of competitive pressures for Southwest we must first recognize the individual forces
involved. Potential entrants into the market include the smaller niche airlines that may offer the
same services, but on a smaller scale. The buyers are the customers who appreciate the value
added that Southwest includes with their services and offers the further bargaining power when
they opt for an airline like Southwest who does not charge extra bag fees. It would be tough to
be a firm in another industry trying to offer substitute services being that air travel is within its
own right. Suppliers would be the fuel companies who may subsidize the prices of fuel for the
airlines seeing that they purchase in advance according to the status of the industry. Lastly, the
rivalry among competing sellers would include those airlines who are in direct competition with
Southwest such as American Airlines and Jet Blue. According to this framework, the closest
rival for Southwest would be American Airlines. However, Southwest is already in a favorable
position given the competitive analysis.
8. Running Head: STRATEGIC ANALYSIS 8
The force that exerts the most pressure on the company would be rivals who introduce
competitive pressures from within the industry. Even though they are not providing the same
quality of product, they are the other option for buyers who would not hesitate to use their
services over Southwest if they fit the requirements which are still overall supportive of the high
industry profitability. In order to help relieve the pressures from rival companies Southwest has
continued to build on its value added strategy. Southwest is known for their commitment to
customer service. The company will “intentionally avoid entering markets where destination
airports have highly concentrated airport structure or congested facilities” (Oh, 2002). Even
though providing the market to the customer would mean more money in their pockets, they
decide to go beyond the normal financial gain and create additional benefits for their patrons. By
focusing on the interests of their customers they are able to stay at the top of the list for
providers.
External Environment Recommendations
My recommendations would include sticking to their strategy with providing the best
customer service and continuing to align their actions with their mission and vision. 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.
Internal Environment & Competitive Position
SWOT Analysis
“In evaluating a company’s overall situation, a key question is whether the company is in
a position to pursue attractive market opportunities and defend against external threats to its
future well-being” (Thompson, Peteraf, Gamble, & Strickland III, 2015). In order to make this
9. Running Head: STRATEGIC ANALYSIS 9
determination a SWOT analysis is used. “At first-rate SWOT analysis provides the basis for
crafting a strategy that capitalizes on the company’s strengths, overcomes its weaknesses, aims
squarely at capturing the company’s best opportunities, and defends against competitive and
macro-environmental threats” (Thompson, Peteraf, Gamble, & Strickland III, 2015). The
following is a detailed SWOT analysis for Southwest Airlines Co.
A strength enhances a company’s competitiveness in the market in which it operates. A
strength for Southwest Airlines is the centrality of customer service to their mission; which has
motivated the company to identify key drivers of customer service and focus its operational
efforts on those drivers. “A weakness, or competitive deficiency, is something a company lacks
or does poorly… (Thompson, Peteraf, Gamble, & Strickland III, 2015). A weakness that
Southwest has recently corrected has been the fact that they did not have any international
flights. Just recently the company has added international flights to their list of destinations
(Hethcock, 2015). New technology in an old industry is always a sign of an opportunity. Such
is the case for Southwest Airlines. Not only does this allow for new services, it also may mean a
shift in new products for air travel that can make it more appealing to customers and therefore
increase sales and their bottom line. A threat that is always viable for Southwest would be the
cost of fuel. The cost of fuel directly relates to ticket sales being that customers tend not to travel
as much (for pleasure) when the price of tickets increase as a result of the increase in fuel price
being filtered down to the customer.
Southwest does not represent a special case when it comes to the weaknesses,
opportunities and threats for the industry. Competitors for Southwest would have the same being
that they are in the same industry and subject to the same environments. The only place where
Southwest does represent an advantage is in their strengths. This is one of the reasons in which
10. Running Head: STRATEGIC ANALYSIS 10
the company has done so well. They have unparalleled customers service; which highlights their
mission and vision. As previously mentioned “as a company that is constantly evolving,
Southwest Airlines Co. is always trying to strive for their ultimate mission of providing the
“highest quality of customer service delivered with a sense of warmth, friendliness, individual
pride, and company spirit” (Southwest Airlines Co., 2013).
Core Competencies & Value Chain Activities
The core competencies for Southwest Airlines include: efficient operations, outstanding
customer service, and innovative HR management practices that all enable the company to
follow its stated mission and vision. Not only does this speak to the integrity of the company, it
also allows them to remain a leader within the industry.
A value chain includes “all the various activities that a company performs internally, so
called because the underlying intent ultimately lead to a created value for buyers” (Thompson,
Peteraf, Gamble, & Strickland III, 2015). Southwest has learned to use their support activities
and costs, including: technology, human resource management and general administration to
provide a mainframe for their primary activities and costs including: supply chain management,
operations, distribution, sales and marketing, service and profit margin. They are able to do this
by building upon and continuing to reference their mission and vision in their daily operations.
This in turn enables them to improve their competitive position. For example, the foundation of
Southwest's corporate message is not that customers are number one; rather, employees always
come first with the company, with customers a respected second. Southwest, in turn, expects its
staff to extend customers the same level of warmth, respect, and responsiveness they,
themselves, receive. Along with this corporate mentality, the company has taken “corporate
measurements to insure progress toward meeting company goals” (SNHU, 2014). For example,
11. Running Head: STRATEGIC ANALYSIS 11
the Southwest Supplier Diversity Program “supports suppliers that share Southwest’s ideals. Its
policy for suppliers states, “As a company, Southwest Airlines Co. values diversity and seeks to
create an environment that encourages it, both in the workplace and among our supplier base”
(Lauer, 2010). The company maintains assessment of these implementations through their
corporate extensions in the forms of newsletters publications and web logs. Their Environmental
Stewardship Report “was created to communicate to our Customers, Employees, Shareholders,
and other Stakeholders what Environmental Stewardship means to Southwest. For 2008, we are
publishing this more comprehensive “Southwest Cares” report to show how Southwest does the
right thing by Our Planet, Our Communities, Our People, and Our Suppliers” (Southwest Cares,
2008).
Internal Environment Recommendations
In regards to their competitive advantage, if the company continues to take strides to
represent themselves in such a positive manner, while paying homage to their mission and vision
in their daily work they should have no problems with remaining a powerhouse in their industry.
They have already created a distinct advantage using these proven systems. In most cases the
hard part would be keeping it up. But given the fact that their success has been woven into their
culture research shows they will be just fine.
Competitive Strategy
Low-cost Generic Competitive Strategy
In the United States, Southwest Airlines has, by most measures, been the most successful
airline in its industry. This success is largely due to the competitive advantage Southwest has
12. Running Head: STRATEGIC ANALYSIS 12
gained by effectively positioning the organization in customers' minds. By pursuing a low-cost
provider strategy the company is able to sustain a distinct advantage over its rivals.
“Striving to be the industry’s overall low-cost provider is a powerful competitive
approach in markets with many price-sensitive buyer” (Thompson, Peteraf, Gamble, &
Strickland III, 2015). Such is the case within the airline industry. Southwest is able to do this by
incorporating features and services that consumers consider essential; such as little to no extra
charge for luggage. They call it the “Bags Fly Free” campaign (Southwest Airlines Co., 2015).
“Did you know… that Southwest Airlines does not charge for your first or second checked bag?
That’s right! While bag fees have become the norm amongst our competitors, we've stayed true
to our reputation as the maverick of the airline industry by not charging for bags” (Southwest
Airlines Co., 2015).
In keeping with their already lower than competitors fare charges, Southwest has gained
an advantage even further by not passing additional fees onto their customers with bag fees.
These strategic methods come with even further cost advantages by allowing the value chain to
be performed more cost-effectively than rivals. Falling under the service branch of their value
chain the company is more than doubling their recuperation on costs by announcing the savings
for customers with just the first two bags. Competitive advantage is thereby sustained when
customers see the value that comes along with their ticket price which leads to an increase in
market share for Southwest.
Competitive Strategy Recommendations
It is my recommendation that Southwest continue to add value by differentiation. “The
centrality of customer service to the Southwest mission has motivated the company to identify
key drivers of customer service and focus its operational efforts on those drivers” (Miles &
13. Running Head: STRATEGIC ANALYSIS 13
Mangold, 2005). This “branding process enables the organization to consistently deliver its
desired brand image to customers, thereby solidifying a clear position in the minds of customers
and employees alike. When done well, it provides a competitive advantage” that further enables
added savings throughout the value chain.
Strengthening Competitive Position
Generic Strategy
By pursuing a low-cost provider strategy Southwest Airlines is able to sustain a distinct
advantage over its rivals. This success is largely due to the competitive advantage Southwest has
gained by effectively positioning the organization in customers' minds in addition to finalizing a
merger with a top competitor, a complementary strategic move. Acting proactively, the
company has done its research, studying the voice of its customers and understanding exactly
how to make Southwest Airlines the best option. As we have come to learn, excellent execution
of an excellent strategy is the most reliable recipe for turning a company into a standout
performer over the long term.
Complementary Strategic Option
A merger is a complementary strategic option “which involves more shared ownership
and can be used either to consolidate what the merging companies have or provide the
companies with additional diversification, especially into a new industry for the acquirer
(Swaminathan, Murshed, & Hulland, 2008). This was the action taken by Southwest Airlines in
the fall of 2011. With a lack of presence in the international market prior to the merger, this
action allowed Southwest entry in to international markets and put the company on the path of
growth; accelerating the company’s profits by 75% per year to $946 million in the first three
14. Running Head: STRATEGIC ANALYSIS 14
quarters of 2014 (Team, 2014). These offensive actions to improve strategic position have
definitely paid off. “This international presence has positioned Southwest to expand to Central
America and northern parts of South America – regions that are seeing fast growth in demand for
air travel” (Team, 2014). By using the merger as a complementary strategic option, Southwest
has taken a strategic turn for the better and focused planning on growth in the international
market.
Competitive Position Recommendations
In order to continue to strengthen its competitive position, Southwest Airlines must
extend its strategy and possibly complete an acquisition of a top competitor. By staying abreast
of the continuously changing “market conditions, competitive landscape, and their own strengths
and weaknesses,” Southwest must also continue to revise and extend their strategies to options
that will allow them to remain in majority share of the market. One way they can do this is by
completing an acquisition of a foreign airline service based in an overseas market. This will
enable the company the access it needs to branch out into the foreign market as well as the
customers.
The Global Marketplace
Used primarily as an opportunity for growth and competitive advantage, Southwest
Airlines was able to successfully merge with AirTran Airways in the fall of 2011. This
deliberate act of strategy has enabled the company to remain a leader within the airline industry
by having a direct result of access into foreign markets. Not only did this action expand the
possibilities for further growth for the airline giant, it also proved immediately successful.
15. Running Head: STRATEGIC ANALYSIS 15
“Three years after the merger, Southwest’s operating costs are still well below those of
other major airlines including top competitor, Jet Blue Airlines. In terms of capacity, AirTran
expanded Southwest’s network by about 25%, making Southwest the largest domestic carrier
based on the number of passengers flown” (Team, 2014). The move was a direct catalyst for
international growth. “Overall, the AirTran integration has played a crucial part in taking
Southwest’s stock to its current lifetime high” (Team, 2014).
Additional actions the company can take in order to continue to gain a competitive
advantage in foreign markets include preserving the cost advantage already realized by operating
a single type of aircraft. Southwest is currently playing this card by leasing out AirTran’s fleet
of 717s to Delta Airlines, another top competitor. Value is created by saving costs and
outsourcing goods to another company (Team, 2014).
Corporate Strategy: Business Diversification
Diversification Strategy
It has been said that “a corporate strategy tries to create synergy, where the diverse
businesses under the corporate umbrella achieve more than they would as separate, disperse
business units and thus expand shareholder value” (Porter, 1987). The opposite can be said for
Southwest Airlines. Being a company that is completely dedicated to the industry in which it
operates, Southwest does not boast of a diversification strategy, related or unrelated. One thing
that the company does that can be similar to diversification is the divestiture of their Boeing 717
fleet of plans to Delta, a rival company. “Southwest's commitment to a single type of plane—the
Boeing 737—has played a big part in its success. Southwest is so devoted to the 737 that after it
acquired AirTran, a rival carrier that was a leading operator of the Boeing 717 (once known as
16. Running Head: STRATEGIC ANALYSIS 16
the MD-95), it decided to lease the defunct airline's entire 717 fleet—88 planes—to Delta”
(N.B., 2012, par. 2).
Chris Wahlenmaier, VP of Ground Operations for Southwest Airlines explained their
reasoning:
"We only need to train our mechanics on one type of airplane. We only need extra parts
inventory for that one type of airplane. If we have to swap a plane out at the last minute
for maintenance, the fleet is totally interchangeable—all our on-board crews and ground
crews are already familiar with it. And there are no challenges in how and where we can
park our planes on the ground, since they're all the same shape and size." (N.B., 2012,
par. 3).
This strategy has proven to boost revenues for the company as well as significantly decrease
operating costs. Not to mention the huge discount received by the plan manufacturer.
Diversification Future Proposal
A future proposal for business diversification would involve possibly partnering with a
travel destination company such as Expedia or Priceline. This move may help ease the company
into the top spot within the industry by offering more of the market and broadening their service
line. However I am not sure it would be largely supported by stakeholders being that it is not
warranted. To date the company has achieved an unprecedented “60 consecutive quarterly
profits, a record of profitability no other carrier can touch” (Reed, 2006).
Ethics, Social Responsibility, & Environmental Sustainability
Southwest Airlines is a great representation of a company whose focus is embodied by
the three spheres and corporate social responsibility. To express an understanding in both the
17. Running Head: STRATEGIC ANALYSIS 17
economic and political spheres a quote was noted stating, “activities undertaken in a space
(middle ground) where economic and ethical activities overlap, are likely to generate a source of
long-term, stable profits, and result in a higher level of employee, shareholder and corporate
well-being” (Bansal, 2005).
Ethics
Southwest demonstrates these sorts of activities in their daily execution of business by
choice to meet the rules and regulations set by the government. An example is their willingness
to comply with and make the most out of industry regulations for both their business and their
shareholders. For example, one section of “the second phase of the Department of
Transportation’s Passenger Protection Regulations Rule #2, which goes into effect for all airlines
on January 24, 2014 for most provisions and on January 26, 2014 for the Full Fare Advertising
provision states: If a flight’s status changes by thirty or more minutes or the flight is cancelled,
Airlines must inform Customers within thirty minutes of that change” (Anderson, 2012.).
Though you will find that based on Southwest’s website, this rule does not require any changes
of the company. “This rule does not change what we are currently doing. As has been
Southwest’s since 2000, if a Customer cancels a reservation within 24 hours of original
booking/ticketing, a refund is automatically processed to the original form of payment”
(Southwest Airlines, 2013). In addition, Southwest goes above and beyond in providing ever
essential access for it’s’ customers to make any necessary changes quickly and easily through
their: mobile site or app, self-service kiosk, ticket counter, or departure gate (Southwest Airlines,
2013). Through this example it is clear to see that the “tug-of-war between people and profits
known as “Economic-Ethics Tension” is not viable in Southwest being that they place an equal
value on both aspects (Bansal, 2005); clearly conforming to their ethics policy.
18. Running Head: STRATEGIC ANALYSIS 18
Southwest Airlines’ CEO, Gary Kelly said it best, “I LUV this time of year—looking
forward to what’s on the horizon and planning to accomplish the goals and resolutions that we
set for ourselves” (Kelly, n.d.). As a company that is constantly evolving, Southwest Airlines is
always trying to strive for their ultimate mission of providing the “highest quality of Customer
Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit”
(Southwest Airlines Co., 2013); in doing so they have continued to develop as a strong industry
leader.
Social Responsibility
“Firms build sustainable value by actively engaging stakeholders in the decision-making
process, and by doing it earlier rather than later”; and great companies focus on more than one
bottom line when gauging their performance (Bansal, 2005). Just recently Southwest was
praised for teaming up with the National Oceanic and Atmospheric Administration (NOAA) to
provide a “missing link” and help revolutionize weather forecasting (Southwest Airlines
Newsroom, 2013). This is yet another example of how the company’s stage of development has
been reflected in its vision and value statements over time. 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.
Sustainability
One of the reasons Southwest Airlines is a well-known and respected company is because
of their commitment to remaining a sustainable community. In doing so they are continuously
researching on how to make strategic decisions for a flourishing and environmentally sustainable
future that providing a foundation for growth. Employing a Combined Environmental
19. Running Head: STRATEGIC ANALYSIS 19
Management System complete with environmental and sustainability training for employees, and
modernization program, “environmental stewardship is a responsibility Southwest Airlines takes
seriously, and efficient operations are the hallmark of our Company and the foundation of our
environmental commitment” (Southwest Citizenship, 2014). When referring to environmental
initiatives, Southwest believes “our planet sustains us all, so we feel it’s our responsibility to
protect it. This focus on efficiency not only makes good business sense, it is the right thing to
do!” (Southwest Citizenship, 2014).
With the global village in mind, the company has fully integrated their environmental
management system into their current sustainability management practices. Following standards
set by the Global Reporting Initiative (GRI), Southwest has communicated their sustainability
performance by adhering to and fully complying with this framework for the fourth year straight
(2012 Southwest Airlines One Report, 2012). Using framework which includes reporting
guidelines and sector guidance, the GRI “enables grater organizational transparency and
accountability by voluntarily allowing a company to report their economic, environmental and
social impacts cause by everyday activities (Global Reporting Initiative, 2014).
In my opinion Southwest has gone above and beyond, surpassing set standards with
intense environmental and sustainability training. This excerpt was taken from their 2012
Southwest Airlines One Report:
Our commitment to protecting our Planet is integral to our operations, so we include the
topics of environmental stewardship and sustainability in our Employee training. At and
above our Supervisor level, we have enhanced Leadership courses to include
sustainability content. In these courses, we discuss sustainability, our fuel usage and its
impact on our greenhouse gas emissions and climate change, our initiatives to decrease
20. Running Head: STRATEGIC ANALYSIS 20
emissions, and our recycling programs. We also require annual environmental training
for all operational groups. Topics covered include storm water pollution protection,
proper waste disposal, air permitting compliance, and aircraft drinking water compliance.
Through this recurrent training, we teach our Employees about current environmental
policies and regulations that must be followed in our operations.
Strategy Execution: Building the Capability to Execute Strategy
Internal Strategy Execution
Supporting its central based strategy, Southwest has been able to prove adherence to their
mission, vision, and value statements through its hiring and training practices. As previously
stated within this document, a vital part of Southwest’s employee friendly workplace comes from
providing them with “high impact training programs.” These programs are structured to be
aligned with the specific and measureable goals as outlined and fully supported by leadership
(Blanchard, 2007). Following the strategy map for Southwest, an example of successful
implementation includes a more responsive ground crew. As a result of the high impact training
programs, this organizational capability has increase response for ground crew who can help turn
around the planes at a quicker rate which would have a positive impact on on-time departures (a
key business process for airlines and metric air travelers potentially look at when deciding on
flights). This improved key business process results in higher customer satisfaction, which in turn
results in higher customer loyalty and profit” (McKnight, 2009, par. 1).
21. Running Head: STRATEGIC ANALYSIS 21
The leadership of the company is functionally structured with two tiers of top level
management which make all of the important company-wide decisions. Given the success of the
company I would suggest that the structure remains as is. The current executive team is doing a
remarkable job at keeping the company in a competitive position and the current structure works
given the ability to remain in direct control of company-wide initiatives and strategies.
Strategy Execution: Managing Internal Operations
Best Practices at Southwest
As a vital key to this strategic analysis, I have had the pleasure of interacting with
Southwest Airlines employees and gleaning their perspective of working for such a remarkable
company. The following highlights some of their responses from an internal standpoint. One
common theme found while researching the company from an employee’s perspective was the
appreciation for transparency. Using the company’s wildly popular blog Nuts About Southwest,
employees make remarks about best practices such as transparency and accountability. The very
fact that they use the blog not only as an external but also internal communication tool is an
example of how they use information systems to better execute the overall strategy. As with
recognition, motivation comes from management on all levels and with the same emphasis and
excitement. Frequent company sponsored outings, picnics, and team building sessions also lend
a hand to the motivating factor.
According to Salary.com, Southwest executives are handsomely compensated for their
service to the company with a combination of monetary and non-monetary elements. A common
theme for the company’s top three executives, each are receiving a larger percent of equity in the
company than cash. The cash is a combination of yearly base pay and bonuses (Salary.com,
22. Running Head: STRATEGIC ANALYSIS 22
2015). The CEO of Southwest earns a combined total of about $4,000,000. However, according
to Salary.com, the executives at rival American Airlines bring in almost double of what the
executives at Southwest are. Based on this comparison I would say Southwest has a
compensation rating of a five on a scale of 1 to 10. Based on this information I would venture to
say that the governing board for this company would allow a slight increase in salary and
benefits; especially given the success rate. The culture is already one where the employee
turnover is low, but it would not hurt to increase salaries and bonuses to all employees if it is a
financially feasible option.
Strategy Execution: Leadership
Leadership Recommendations
To summarize, Southwest Airlines is doing a phenomenal job in becoming and remaining
one of the best airline travel options for consumers. In an effort to show continuous
improvement and to improve on business operations and strategy, my recommendation would be
to focus on strengthening its competitive position by completing an acquisition of a top
competitor in the international market within three to five years. In addition, the company must
continue to revise strategies as applicable given the acquisition and international growth. In
order to achieve this strategic position, the company’s leadership must focus on air travel in the
international market, what is lacking in international service and how to fill the gap. They must
also be aware of which companies offer the largest return in preparation for the acquisition and
which international market would benefit the most from increasing travel options.
23. Running Head: STRATEGIC ANALYSIS 23
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