SOUTHWEST AIRLINES

Southwest Airlines



Southwest Airlines

Introduction

Southwest Airlines is the largest airline company in America. Southwest operated approximately 3,400 flights a day and utilizing a fleet of 552 aircraft. This airline was founded in 1967 by Herb Kelleher and Rollin King to offer airline services within the state of Texas. In the early period, Southwest Airlines has experiences a huge loss and financial troubles. The domestic airline industry of USA encountered a decline in late 1990's with a decrease in 72% of overall customer due to air fares in industry (Richard, 2004). They were facing no growth in industry, during that time. Simultaneously, an intense competition and rivalry was faced by all airline companies. Southwest Airlines (Being 4th largest carrier organization in terms of traffic flown) encountered similar fare wars with narrowing profit margins. In this state of crisis, Southwest Airline CEO Keller took over in 1981and analyze the major problem of the airlines, he showed his leadership qualities by visiting and listening to the worker, checking maintenance, he stood out through product differentiation and low-cost strategy. He didn't divert, and were more focused was towards their goals and customer satisfaction. They successfully differentiated themselves from their competitors and manage to sustain marginal profitability.

Thesis Statement

To study that how newly incorporated companies need leaders with superior marketing strategies in order to survive in a highly competitive environment.

Discussion

Problems of Southwest Airlines

Southwest Airlines was facing problems regarding the strategic competitiveness against other leading airline, strategic Competiveness Creation Strategic and values and recognition that should be given to the employee. Because of these things, Southwest Airlines was facing financial losses. These problems were solved when the new CEO Kelleher era started, and he came up with new strategies and his leadership role turnaround the Southwest Airline phase. Competitive strategy is concern how an organization will competes in a business. For a company to survive in any industry there should be a unique characteristic that distinguishes a company form its competitors. This thing was lacking in the Southwest Airlines. Southwest did not have any competitive strategy that can make them gain an advantage.

In-depth Analysis of Implementation of the Strategies

After the Kelleher had taken over the position of CEO, he implemented new strategies and analyze the main features. He found out that 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 (Robin, 2007).

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. Their first focus was towards “Point to Point Fly Services” strategies, which are short trips with high frequency of flight. They aimed to maintain their commitment to its employees and ...