An Assessment of the Strengths and Weaknesses of Southwest Airlines

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An Assessment of the Strengths and Weaknesses of Southwest Airlines Company Overview

Southwest Airlines began operations in 1971, with the company's initial service taking place between Dallas, Texas, Houston, Texas, and San Antonio, Texas (Southwest Airlines, 2006). Rollin King and Herb Kelleher started the company with a simple mission focused on being different than other airlines; their chief focus was to provide on time flights at a low cost, along with a bit of fun (Southwest Airlines). As Welch (2005) argued, Southwest Airlines was the world's richest and most profitable airline, illustrating the success the company enjoyed as a result of a simple, yet practical strategy. Hill & Jones (2004) explained that an emergent strategy is the result of acting on an intended strategy (p.20). Kelleher and King set their strategy for Southwest Airlines based on low cost, no frills flying from the company's initial launch in 1971. Southwest Airlines explained that 1973 was its first profitable year of operations, a monumental achievement being that it had only been operating for two years (Southwest Airlines) As Southwest Airlines explained, the company experienced fast growth, flying its one millionth passenger a mere three years after launching! By 1977, the company was listed on the New York Stock Exchange, with a ticker that signified the company's commitment to its customers, LUV (Southwest Airlines). With a clearly defined mission oriented towards pleasing customers through low prices and a fun environment while flying, Southwest set the stage for its next level of success.

Southwest Airlines earned a number of distinctions soon after its launch, establishing itself as a major player in the airline industry. By 1981, Southwest Airlines was ranked number one in customer satisfaction and in 1987 was recognized for its sixth consecutive year of high consumer satisfaction (Southwest Airlines, 2006). Southwest Airlines was the first airline to win the Triple Crown for a month in 1988, which recognized the airline for having the best on time record, best baggage handling, and fewest customer complaints (Southwest Airlines). Southwest Airlines appears to have been dominating the airline industry at this point in time, which is evidenced by the large number of awards and recognition it received in a variety of categories. Southwest Airlines argued that the company is still dedicated to meeting customer needs at a low cost, which is demonstrated by its winning of the Triple Crown thirty times since 1988. As Hill & Jones (2004) discussed, successful organizations demonstrate vision, eloquence, and consistency (p.25-6). Southwest Airline's ability to earn recognition rewards for excellent service and on-time operations are a testament to the company's consistent pursuit of its vision.

Southwest Airlines has run a highly successful operation in the past and contributed to the overall advancement of the airline industry. As Southwest Airlines (2006) reported the company took a different approach to its frequent flyer program by offering customers credit based on the number of trips with the airline instead of the number of miles flown. Additionally, Southwest Airlines was the first ever to offer senior discounts, same day air-freight delivery service, and ticketless travel options. As Answers Corporation (2007) explained, Southwest Airlines significantly cut its operational costs with ticketless travel and saved additional money by running its own proprietary reservation system. Hill & Jones (2004) argued that an organization's competitive advantage leads it to superior profitability (p.79). One factor impacting competitive advantage is the value customers place on a given service and Southwest Airlines use of ticketless travel made it easier for customers to get from the check-in counter onto the airplane, illustrating the utility ticketless travel provided customers of Southwest Airlines (Hill & Jones, p.79).

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