Marion L. Boston
MGT 450 Strategic Planning for Organizations
Instructor: Mark Bojeun
April 4, 2011
Southwest Airlines’ company strategy consists of competitive moves and business approaches management has developed to attract and please customers, conduct operations, grow the business, and achieve performance objectives (J. Gamble & A. Thompson. 2009. p. 2). In writing to inform the management team of the discussion, we will discuss Southwest’s operating practices, their struggles, cultures and values, and how the airline strategically manages their business to obtain the goals needed to be a successful airline. History of Southwest
From the Love triangle to the largest passenger carried U.S. airline, Southwest Airlines is committed to customer service and safety. Their mission is to govern the way they conduct their business. Southwest highlights their desire is to serve their customers and gives them direction when they have to make service-related decisions. It is another way of saying, “we always try to do the right thing!” The Mission Statement has also led the way to the airline industry’s best cumulative consumer satisfaction record, according to statistics accumulated and published by the U.S. Department of Transportation. Safety is the very foundation of the aviation industry, and it must be Southwest’s number one priority to ensure the personal Safety of each Southwest Airlines Customer and Employee. It is the Culture of Southwest Airlines for Employees to follow The Golden Rule and “do the right thing.” When it comes to Safety, this is all the more important. The commitment is to foster and support a Safety Culture at Southwest Airlines that identifies risks to the operation and workplace and proactively deals with these issues before they become injuries, accidents, or incidents (SouthwestAirlines.com, 2011). Southwest Airlines was conceived in 1966 by Rollin King, a San Antonio entrepreneur, to transport businesspersons traveling from San Antonio, Dallas, and Houston for the same cost of a shuttle bus. This airline would address the issue of the length of time traveling between these cities, and the cost of that air travel. Southwest was famous for their ten minute turn-a-round time for loading and unloading passengers. As time went on, Southwest began to expand into other cities, without increasing their fleet, growing by one to two cities per year adding more flights to increase the overall bottom-line. The company’s strategy was working well because the company was achieving its stated financial and strategic objectives and the company was an above-average industry performer. From the beginning, Southwest pursued a low cost/low price/no frills strategy or the focused strategy based on low cost aims at securing a competitive advantage by serving buyers in the target market niche at a lower cost and a lower price than rival competitors (J. Gamble and A. Thompson. 2009. p. 73, 107, 108). Southwest has always attempted to keep their prices low with a simple fare structure, use everyday coach fares, and a $399 walk up airfare. Their strategy was unbeatable. Rivals in Business
The unbeatable strategy upset competition and Dallas officials. The Dallas officials wanted to tap into the money that Southwest was making to help them to complete the construction of Dallas-Fort Worth Regional Airport (DFW). However, Southwest’s headquarters was at the Dallas-Love Field Airport, ten minutes away from downtown, and they had no desire to move. Southwest was not required to move, nor did they agree to move, so they did not move, but they remained at the Love Field Airport. The monies needed for the construction would have to come another way. The rival airlines protested Southwest’s application to service other small cities in Texas. They argued that these cities were already well serviced. Southwest re-enforced their vision to...