Value Chain Analysis on Southwest Airlines

Introduction

Southwest Airlines (or the company or Southwest) is one of the leading low cost airlines' in the US. Like any airline, its internal environment impacts on its strategic direction in many ways. In 2006, Southwest Airlines marked its 34th consecutive year of profitability. No other airline came close to matching its performance. And Southwest had achieved those results while growing from an upstart to the largest U.S. airline in terms of number of passengers flown. Southwest had succeeded where others had failed by passionately pursuing both low cost and high customer touch. Low-cost tickets attracted passengers; extraordinary customer service kept them coming back. Staffed with energetic employees, Southwest developed a culture for making flying fun. Southwest executives told employees to do what was best for the customer, and management rewarded individuals for going out of their way to enhance the customer experience. Friendly staff, personalized letters, and proactive problem resolution were the norm (Mark, pp. 48).

At South West, low cost and product differentiation provision of the best customer services, is the strategic competitiveness advantage. Major competitors of Southwest face Direct (Regional Competition). Direct competition includes, AMR Corporations, JBLU (JetBlue Airways Corporation), UAL (United Continental Holding). These are regional airlines. Indirect competition is with foreign airlines.

An organization achieves competitive advantage only, when they adhere to their mission, vision and objectives. During 1990's when Southwest was facing a crisis, the developed proper strategic plan towards product differentiation. They develop a series of objective to achieve competitive advantage.

Discussion

A value is created when an organization is successful in analyzing the product or service they are trying to promote. They need to know what is important for them. For southwest Customer Satisfaction had always been a top priority, be in their mission statement or motto. South west offered ...