Services like these have been seen by the airline as unnecessary for an airline that provides a short-haul trip from city to city. Due to the sluggish economy, many potential passengers are mainly concerned about price before other factors. We have considered the elasticity of the market to be 1. You should try to understand not only the organization but also the industry which the business operates in. The airline began with one simple strategy: to get the passengers to their destinations when they want to get there, on time; at the lowest possible fares; and to make sure they have a good time on board. The company is described to not have much emphasis on structure; instead employees are encouraged to think freely without constraints such as titles. These solid earnings were achieved despite significant efforts and costs related to critical strategic initiatives.
The AirTran acquisition and a reservations system upgrade have helped accelerate the process and now Southwest offers service to Aruba, Cancun, Los Cabos, Nassau, Montego Bay and San Juan. Job's 2013 Top 100 Military Friendly Employers Ranked first in America's Happiest Airlines for Holiday Travel by Forbes for the third consecutive year Recognized with the Employees Choice Awards Best Place to Work 2013 by Glassdoor. Ivey Business Journal, 70 2 , 1. All major carriers in the industry experience big problems. Kelleher, for example, is said to know the names of virtually all his employees.
Southwest is one of those airlines which have remained profitable. Terrorist attacks on the World Trade Center had a devastating effect on the airline industry, particularly because the instrument of destruction of these attacks was hijacked airplanes. Pest analysis These forces refers to micro environment and the company ability to serve its customers and make a profit. Other new service includes flights to Atlanta, Fort Lauderdale, Los Angeles, Nashville, La Guardia, San Diego, Orange County, Tampa and Washington National. However, though coupled with several strengths, Southwest Airlines is not without weaknesses. You can use this history to draw a growth path and illustrate vision, mission and strategic objectives of the organization. Sustainability One of the reasons Southwest Airlines is a well-known and respected company is because of their commitment to remaining a sustainable community.
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, imitation is done in two ways. Because this move affects both companies, this move is very risky and should not be done unless Southwest Airlines is sure that their competitor is near bankruptcy. Business Horizons, 48 6 , 535-545. Aside from the fact that there are already so many established airlines that have good names and reputations, the vulnerability of the industry to economic cycles somehow add difficulty for new entrants.
From competitive advantage to corporate strategy. Southwest Airlines has weathered through several crises and has proven itself to have potential for to be a leader of its industry. Southwest Airlines has achieved remarkable performance by almost any standard and achieved it within an industry that is undergoing major change. By starting operations in 1971, Southwest faced from the very beginning harsh competition from incumbent airlines. Step 10 - Critically Examine Southwest Airlines in Baltimore case study solution After refreshing your mind, read your case study solution critically. These forces are used to measure competition intensity and profitability of an industry and market. It is recommended to read guidelines before and after reading the case to understand what is asked and how the questions are to be answered.
ProQuest Dissertations and Theses, , 88-88 p. It is obvious, in this case, that hiring more stewardesses would not make sense because they would just take up passenger space. Growth with consistency: When they enter a new city they want to make sure that they do the business which is consistent throughout the system. The company promotes a happy work environment through company-wide events and parties. You should try to understand not only the organization but also the industry which the business operates in. Southwest Airlines is a somewhat different example of a business model pioneer—and indeed, one may ask if the company is a pioneer at all: neither was Southwest the first to offer intrastate flights on its home market, Texas, nor was it the first to experiment with low-cost flights.
In addition, Southwest offers no exceptional business or top notch seating. After having a clear idea of what is defined in the case, we deliver it to the reader. The industry can use Web sites to publish - in a cost-effective way - public domain documents such as annual reports, product brochures, positions vacant, contact details and other important information. Time line also provides an insight into the progressive challenges the company is facing in the case study. Southwest does not represent a special case when it comes to the weaknesses, opportunities and threats for the industry.
The next step is organizing the solution based on the requirement of the case. And worse, there is a possibility that a big company in the future, possessing more advanced technologies and facilities, will operate using Southwest Airlines' low-cost model to a wider market, which will encroach and outdo Southwest Airlines. Since Southwest's inception, the major elements of the product offering have been price, convenience and service. For various reasons, including opposition from some employee groups, Southwest has not entertained such possibilities. You must go further than describing what it does in each activity through a discussion of what it does well strengths and what areas it needs to improve weaknesses to address. Although, Southwest flies various model varieties of the 737, still the cockpits of the whole fleet are institutionalized. An example is their willingness to comply with and make the most out of industry regulations for both their business and their shareholders.
However, that does not make money. Furthermore, Southwest Airlines does not utilize a hub system that allows for bigger competitors to reach further out. However, Southwest is already in a favorable position given the competitive analysis. Its product is outdated Southwest has the balance sheet strength to leverage new products that its customers would find appealing, and that in the medium term would generate high margin revenue. It primarily provides short haul, high-frequency, point-to-point, low-fare air transportation service among 58 cities 59 airports in the United States.
That allowed established carriers which were weighed down by decades of embedded costs to revamp their expenses across the board—employee head count, aircraft leases, to the wine offered in first class. 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. Furthermore, unions have played a great role in the game and have become more aggressive in expressing their frustration. It also provides starting ideas as fundamentals often provide insight into some of the aspects that may not be covered in the business case study itself. After reading the case and guidelines thoroughly, reader should go forward and start the analyses of the case. The nation's largest domestic carrier just marked its 40th straight profitable year 2013 , an unmatched feat in a time of economic turbulence, fluctuating fuel prices and airline bankruptcies. Illustrates the development and introduction of new consumer services and advertising strategies.