Constantaras vs Anagnostopoulos
Case Study II: Business Strategy
Amy L. Walker
Columbia Southern University
BBA 3551 6B14 Information Systems Management Dr. Romeo Farinacci
Case Study II: Business Strategy for Southwest Airlines
Introduction
Michael Porter developed three generic strategies for competitive advantages which are the cost leadership strategy that involves a business to be the lowest cost producer and distributor in their industry, a differentiation strategy where a business makes products and provides services that are different from competitors and appealing to their customers through product quality, functionality, and customer support, and a focus or niche strategy where a business will focus on a certain target group, such as, age, gender, or class bracket of consumer and become well known for the products or services they provide.
Relevant Facts Porter asserts that in order for a business to have a competitive advantage they must examine their strengths and choose between one of these generic strategies. Southwest Airlines uses Porter’s focus (niche) strategy. “Southwest, unlike other airlines, does not use a hub and spoke system, and focuses on short, high-density routes. Traditionally, Southwest has been one of the smallest U.S. major airlines and has concentrated its route structure in the Southwestern U.S.; this would support the argument that it is pursuing a focus strategy” (Kling & Smith, 1995, p. 33). The identification of the strategy that U.S. Airways uses would be the forth strategy within M. Porter’s generic strategies called “stuck in the middle” which means they have not achieved a competitive advantage, although they have tried to achieve one of these stratigies they have been deemed average and have failed at one of the strategies of cost, differentiation, or focus. U.S. Airways was trying to achieve a differentiation strategy but their quality rating was average in the industry and their cost was one of the highest among the other
Amy L. Walker
Columbia Southern University
BBA 3551 6B14 Information Systems Management Dr. Romeo Farinacci
Case Study II: Business Strategy for Southwest Airlines
Introduction
Michael Porter developed three generic strategies for competitive advantages which are the cost leadership strategy that involves a business to be the lowest cost producer and distributor in their industry, a differentiation strategy where a business makes products and provides services that are different from competitors and appealing to their customers through product quality, functionality, and customer support, and a focus or niche strategy where a business will focus on a certain target group, such as, age, gender, or class bracket of consumer and become well known for the products or services they provide.
Relevant Facts Porter asserts that in order for a business to have a competitive advantage they must examine their strengths and choose between one of these generic strategies. Southwest Airlines uses Porter’s focus (niche) strategy. “Southwest, unlike other airlines, does not use a hub and spoke system, and focuses on short, high-density routes. Traditionally, Southwest has been one of the smallest U.S. major airlines and has concentrated its route structure in the Southwestern U.S.; this would support the argument that it is pursuing a focus strategy” (Kling & Smith, 1995, p. 33). The identification of the strategy that U.S. Airways uses would be the forth strategy within M. Porter’s generic strategies called “stuck in the middle” which means they have not achieved a competitive advantage, although they have tried to achieve one of these stratigies they have been deemed average and have failed at one of the strategies of cost, differentiation, or focus. U.S. Airways was trying to achieve a differentiation strategy but their quality rating was average in the industry and their cost was one of the highest among the other