Mkt 500 Assignment 1

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Diversification Strategies
Southwest Airlines

Southwest Airlines was started 45 years ago in 1967 by two entrepreneurs: Herb Keller and Rollin King who had the right vision and culture by which to become successful entrepreneurial leaders. This vision was achieved as Southwest Airlines became the greatest airline in the USA. As a young business in the airlines industry, Southwest Airlines in the initial years confronted very tough situations, and it was due proper planning and with the assistance of its employees that kept Southwest Airlines afloat from sinking. There were already pioneer big companies well established in the airlines industry when Southwest Airlines joined the industry. Some of these companies had a good share of the market and with low over head costs. Such a scenario makes it problematic for a new comer to get a solid footing in the industry. Through these decades, times have been changing and Southwest airline have been changing its waste of operation to keep up with the time. Gould stated, “Core competencies are not constant. They tend to change as the organization changes. Therefore, it’s important that the competencies are flexible and not etched in stone.” (p.5, 2008) The history of the air industry is characterized with very tough competition among companies. Besides, it is even tougher for new companies to enter the industry. The corporate head office of the Southwest Airlines is located in Dallas, Texas and that was where it was initially founded. They started with only three planes. Southwest Airlines’ corporate culture differs significantly from the other airlines in many ways, as we shall see herein below. The unique difference between the corporate culture of Southwest Airlines and the other airlines is one of the major factors responsible for the prosperous survival of Southwest Airlines. There is a fierce competition in the airline industry. Perhaps because of this competition, companies that are established in the industry are very hostile to new comers because they do want to give up any hard fought market share. The strong unique culture of Southwest Airline is responsible for its success. The founders of Southwest Airlines came into business with a very strong vision to compete and profit for the company. The main unique culture of Southwest Airlines which made it completely different from the other airlines was that, Southwest Airlines came into the air industry with the intention of undercutting all usual market prices for air services in the air industry, by providing the lowest cost price to customers for air services. The strategy was to offer value to air travelers the lowest prices were achieved by ruthless cutting, efficiency, and eliminating overhead costs. The validity of Southwest airline unique culture has been proven sound, Bundgaard stated, “ In response to the success Southwest has had with its business model additional airlines have tried to entire its low price, point to point airline market. Airlines such as JetBlue have been developed directly from the Southwest model and have seen positive result.” (p.9, 2009) This intention took in consideration to provide the most satisfactory services to its customers. The culture also included the provision of secured job, excellent opportunities for those interested in pursuing higher education, training, and promotion within the company. The cultural elements come together brought about a positive unforced attitude from workforce which became another strength. That enabled the employees to provide the best care to the customers with smiles and cheerful work attitude. The employees were treated with the same care and dignity as the customers. This motivational gesture and treatment boosted the moral confidence of the employees to feel that they were part of Southwest Airlines. The employees became more dedicated to Southwest Airlines. Once there is openness and respect between the management...
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