Airline and Southwest

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Question 1) Why was Southwest successful?
The case stated that “since its first regular flight in June 1971, Southwest had compiled the most consistently profitable record in the world’s airline industry.” As I read through the case, I realized that Southwest had great business-level strategy by knowing who, what, why, and how questions. For example, Southwest knew that they are going to deal with a lot of business people who need to on-time for their business and also knew that by satisfying would benefit Southwest by gaining the loyal customer thus, Southwest emphasized on on-time-arrivals. I think the main reason how Southwest become a successful airline among many others is that they organized their strategic questions to be aware of the potential opportunities, threats, strength, and weakness for the company. Question 2) Which of the four generic strategies did Southwest pursue when it was founded? Which generic strategy does it pursue now? What evidence supports you claim? There are total four generic strategies; focused cost leadership, cost leadership, focused differentiation, and differentiation. In my opinion, Southwest approached both differentiation and cost leadership strategies. First of all, Southwest provides higher value service such as frequent flights, on-time arrivals, and well-trained employees for their customers than any other airlines out there. And with this high quality service, Southwest also seeks to provide lower price than the competitors. Southwest pursed these strategies when it was founded and still they use these strategies today. Question 3) Was Southwest’s uniqueness a VRIO resource? Why do you consider it to be a VRIO resource or not to be a VRIO resource? Did it help Southwest gain and sustain a competitive advantage?

VRIO framework clearly shows how Southwest’s service is unique and its competitive advantage. The valuable resource that Southwest provides is the lower fare but the higher quality (on-time arrival)...
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