Southwest Airlines Balanced Scorecard



Southwest Airlines Balanced Scorecard

Introduction

Southwest boasts the best on-time record, best baggage handling, and fewest customer complaints in the airline industry and won the industry's Triple Crown award for Best Airline five times in a row from 1992-96. It was the first airline with a frequent flyer program to give credit for the number of trips taken, not just the number of miles flown, and also pioneered senior discounts, Fun Fares, Fun Packs, a same-day air freight delivery service, ticket-less travel, and many other unique features. Southwest Airlines has proven to take advantage of such strategies and succeed because of the high-frequency, short hops at low rates they offer. Even though other airlines have begun to incorporate Southwest Airlines strategies and values, Southwest Airlines still leads and remains efficient by maintaining the loyalty of their employees and in keeping their customers satisfied.

Analysis

Until Southwest chooses to widened its operation domestically and expand its activity internationally, Southwest Airlines is being prudent by keeping short flights. Currently, over one-hundred cities are waiting for Southwest Airlines to bring their business and create jobs in their locations. It would be very beneficial for Southwest Airlines to take this opportunity to expand while it is available because it will take the company to whole other level which will be reflected by a significant growth. It would also be astute to network and make agreements or contracts with larger carriers to share and maximize profit. The company should do it as soon as possible because competitors would jump on such an opportunity to expand. Evolving into a bigger corporation should be an easy step as Southwest Airlines has already succeeded with his low price ticket strategy driving out its competitors of business and taking over their market share.

Since Southwest Airlines' on-line ticketing system generates up to fifty percent of the company's revenue, a committee should be permanently appointed to audit and improve this asset. Booking a flight on-line costs Southwest Airlines one dollar per ticket while booking a flight via a travel agent costs on average ten dollars per ticket. Updating the Southwest Airlines website and enhancing this type of technology is necessary to lower operation costs and to offer consumers the lowest fares.

Southwest Airlines keeps their aircrafts constantly flying except when taking-off, landing which is useful because it avoids "parking fees". Without doubt, Southwest Airlines must keep, update and upgrade their aircrafts so that they can function properly to ensure the safety and confidence of their consumers. Southwest Airlines should make consumers feel safe by dropping the ticket prices and upgrading its aircrafts. This can, at first sight, only be done by giving up some profits in the short run while expecting higher profits in the future if the market in which Southwest operates is widened.

One major internal asset of Southwest Airlines is its corporate culture. Southwest Airlines has invested many years and enormous amounts of money and effort to implant a powerful culture, value system and to develop employee loyalty as matter ...