Southwest Airline case study
Illustrate the meaning of “Sustainable Competitive Advantage”. What was the main strategy adopted by Southwest Airlines that made it successful in the airline industry?
Competitive advantage is a position of a company in a competitive landscape that allows the company earning return on investments higher than the cost of investments. Competitive advantage should be relevant, unique and sustainable. Therefore sustainable competitive advantage, it’s a long-term competitive advantage that a company own over others in the same sector that is not easily duplicated or surpassable by its competitors (wikipedia, 2009). Competitive advantage can also be seen as a superiority gained by an organization when it can provide the same value as its competitors but at a lower price or can charge higher prices and providing greater value through differentiation (Porter, 1985)
For a company to sustain its competitive advantage its must possess a core competence which is a unique ability that he as develop over time that cannot be imitated by its competitors. Core competence is what gives a company one or more competitive advantage, in creating and delivering value to its customers in its chosen field.
The sustainability of competitive advantage depends on three conditions, the first is the particular source of the advantage, secondly sustaining advantage requires change, it demands that a company exploit, rather than ignore industry trends, it also demands that a company invest to close off the avenue along which competitors could attack and lastly, to sustain its position a firm may have to destroy old advantages to create new higher ones. (Portal, 1990)
For the purpose of this study we shall be taking southwest airline as a case study, Southwest Airline is a major U.S. airline that primarily provides short haul, high frequency, point- to point, low fare service. Southwest was incorporated in Texas and commenced operations on June 18, 1971 with three Boeing 737 aircraft
Competitive advantage is a position of a company in a competitive landscape that allows the company earning return on investments higher than the cost of investments. Competitive advantage should be relevant, unique and sustainable. Therefore sustainable competitive advantage, it’s a long-term competitive advantage that a company own over others in the same sector that is not easily duplicated or surpassable by its competitors (wikipedia, 2009). Competitive advantage can also be seen as a superiority gained by an organization when it can provide the same value as its competitors but at a lower price or can charge higher prices and providing greater value through differentiation (Porter, 1985)
For a company to sustain its competitive advantage its must possess a core competence which is a unique ability that he as develop over time that cannot be imitated by its competitors. Core competence is what gives a company one or more competitive advantage, in creating and delivering value to its customers in its chosen field.
The sustainability of competitive advantage depends on three conditions, the first is the particular source of the advantage, secondly sustaining advantage requires change, it demands that a company exploit, rather than ignore industry trends, it also demands that a company invest to close off the avenue along which competitors could attack and lastly, to sustain its position a firm may have to destroy old advantages to create new higher ones. (Portal, 1990)
For the purpose of this study we shall be taking southwest airline as a case study, Southwest Airline is a major U.S. airline that primarily provides short haul, high frequency, point- to point, low fare service. Southwest was incorporated in Texas and commenced operations on June 18, 1971 with three Boeing 737 aircraft