A Case Study Of Southwest Airlines

Strategic management
In the airline industry, Southwest Airlines is considered a true innovator. By shaking
up the rules of flying and improving upon inefficient industry norms, Southwest has quickly
grown by leaps and bounds. From the very start, Southwest Airlines' goals were to make a
profit, achieve job security for every employee, and make flying affordable for more people
(Diaconu Maxim, 2012, p. 23) Southwest has not strayed from these goals. It does not buy
huge aircrafts, fly international routes or try to go head to head with the major carriers; and
thanks to a great planning, Southwest airlines has become the most successful airline
company in the U.S., if not the world.
Organization operating in a highly competitive industry need to operate strategy that
gives them competitive advantage, and one that is not easy to imitate. Operating as a world
leading organization is accomplished with a huge task; whereby for the organization to
maintain its leading status it should continue to operate a strategic management plans that out
pass those of its competitors. (Hallowell, 1996, p. 64) When an organization fully adapts to
its environment in which it operates, there is the advantage ascribed to it where the
organization would be positioned to effectively attain its objectives and long term goals.
Strategic management is then considered as a significant tool for an organization to
adapt to its environment by utilizing its resources in the most efficient way to bring out
effective operation. In the contemporary business world, the level of competition is ever
increasing; it requires that an organization strategize in a way that would give it competitive
advantage over its rivals. Apparently, strategic management is a relevant tool an organization
could use in withstanding the complex and dynamic business world. Armitage (1992) defines
strategic management as a continuous process that works to fit an organization into its
changing environment.
Case study
The case study for this write-up it is recommended that Southwest airline build up an
intensive strategy in gaining more competitive advantage. Intensive strategy which will
enable the organization use its resources to consolidate on areas where it has competitive
advantage and spread its market operations into areas where it is not well established to give
it widened market share. (Raynor, 2011, p. 34)

In contemporary times, the hard work and strategies of Southwest Airlines have over
the years implemented has seen, the organization grow from leaps to bounds into an enviable
airline organization that is a reckoning force in the US airline industry. Going into 2003, the
Southwest Airline became the fourth largest US airline by the number of passengers that it
carries, and the sixth largest in terms of revenue. It makes over an excess of $5 million
annually, and has a workforce of about 35,000 staffs. It operates in 59 airports from 58 cites
in 30 states (ibid). Presently the Southwest Airlines has become the largest domestic airline in
the United States, by number of passengers carried. More than 70 million passengers fly the
Southwest Airlines each year to about 60 destinations around the country.
Competencies
Southwest Airline core competence that is said to be the organizations Order
winners include the utilization of both cost effect strategy and product differentiation to
provide satisfying services to its different categories of clients. The Southwest Airline has
mainly capitalized in cost effectiveness and differentiating of pattern of rendering its services
as strategies in winning the patronage of its timing customers. (Singh, 2002, p. 45) The cost
effective strategy adopted by the organization is one that is used in giving the customer
quality services at the most affordable price that is lesser than what the Southwest Airline
rivals can offer. Michael Porter, in his work Competitive Advantage, proffers two ways a
firm can obtain competitive advantage: through product differentiation and cost leadership.
Product differentiation entails that the firm should come up with innovative product different
from what is available in the industrial market where it operates.
Technology
The Southwest Airline on regular interval introduces the best of technology in its fleet
of aircrafts. However, it has not lost its focus for minimizing cost. The organization in time
past has utilized its internal corporate identity as a viable tool for effective competition. The
organizations utilization of its internal innovation lays in its ability to use the organizations
corporate identity, its corporate logo, corporate slogan corporate culture and staff grooming to
its advantage in competition against rivals. Its corporate culture and identity, motivated
human resources and effective strategic operation have over the years being a reckoning force
to its success. The organization operated a corporate identity that then to make its customers
feel satisfied at the most conducive price. Its adopted corporate logo of LUV is abided to in

making customer relaxed and satisfied. Corporate identity is a way of gaining competitive
advantage to compete favorably.
Its dynamics
The Southwest Airline is a local carrier that operates within some 32 states in the
United States and serves about 62 cities (Southwest Airline, 2007). There are many
opportunities abounding to the organization. It could expand its services to cover the
remaining 20 states and other major cities where it operation has not yet being established.
The United States is a large country, and most times people prefer traveling by air from one
state to another or from one city to another, considering the distance it would take to embark
on road traveling by car. Thus, the opportunity abides that organization such as local carrier,
in which industry Southwest belongs, that they utilize this golden opportunity by expanding
on their existing areas of operations. Further, the government and economy of the United
States is very vibrant and stable compared to other developed countries economy.
Protecting its Innovations
The strategy Southwest Airlines can use in protecting its innovations, it is suggested that
more needs to be done by the organization to expand its operational routes to include other
states in the federation. The organization can do this by carrying out strategies that would see
it making profit out those areas that it considers as unprofitable for its operations. This can be
achieved through adopting other strategies different from the cost effectiveness it has adopted
in other areas of its operations. Here, the organization can enter into deal with other airplane
production companies to buy modern aircrafts that would make it give customers in these
new routes the desired and taste they want in air service. The Southwest Airline mainly
operates the Boeing aircrafts. (Voigt, Buliga, & Michl, 2016, p.67} Change to this in its
expansion bid would mean that it would change its cost effective strategy to adopting service
differentiating strategy. The organization should thus be flexible in its strategic operation in
areas where it thinks cost effectiveness would not make the organization break through; other
strategies that match with such environment should be adopted.

References
Diaconu Maxim, L. (2012). The Development of the Low-Cost Carriers Business Models.
Southwest Airlines Case Study. Annals of the Alexandru Ioan Cuza University - Economics,
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Hallowell, R. (1996). Southwest Airlines: A case study linking employee needs satisfaction
and organizational capabilities to competitive advantage. Human Resource Management,
35(4), 513-534. doi:10.1002/(sici)1099-050x(199624)35:43.0.co;2-z
Raynor, M. E. (2011). Disruptive innovation: the Southwest Airlines case revisited. Strategy
& Leadership, 39(4), 31-34. doi:10.1108/10878571111147387
Singh, P. (2002). Strategic Reward Systems at Southwest Airlines. Compensation & Benefits
Review, 34(2), 28-33. doi:10.1177/0886368702034002005
Voigt, K., Buliga, O., & Michl, K. (2016). Pioneer in the Skies: The Case of Southwest
Airlines. Management for Professionals, 171-184. doi:10.1007/978-3-319-38845-8_14