Case 3-1: Southwest Airlines Corporation
What is Southwest’s strategy? What is the bases on which Southwest builds its competitive advantage? Cost cutting
SWAC uses a low-cost strategy. They had the lowest operating-cost structure in the domestic airline industry. Employee satisfaction
Together with this strategy, they want to achieve customer satisfaction by employee satisfaction. They are famous for their customer and employee relationship. SWAC has been recognized by multiple organizations and magazines as the most admired airline corporation in the world. By making their employees happy, customers are served well. The core competence for this competitive advantage is their hiring process. Peers screened candidates and conducted interviews; pilots hired pilots; gate agents hired gate agents. They searched for the unique strengths in their top performing personnel and based on that they set profiles to identify the top candidates. How do Southwest’s control systems help to execute the firm’s strategy? Cost cutting
They have no assigned seats, crew is paid by trip and airports are less congested. SWAC uses an online booking strategy and automation services and desktop applications to establish their goal of cost cutting. As one of their rules, Southwest’s pilots are not part of a National union, meaning they are not bounded in flying hours. In order to aim lower fares, Southwest generates on increased passenger traffic by approaching short haul, medium haul and point-to-point flights. In comparison with their competition, Southwest had less idle time, faster operation time and less headcount. Employee satisfaction
In order to execute the firm’s strategy, Southwest’s employees gained high loyalty in the company’s leadership and through regular interviewing the department’s head courts, the company was able to control and regulate by collecting data. SWAC is clearly present in the people business. Therefore it’s important to both satisfy your employees as...
Please join StudyMode to read the full document