Southwest Case Study

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1. What is Southwest's competitive strategy? What are the sources of its success? How does it make money? Answer: Southwest’s competitive strategy is cost cutter. Management handles operational expenses very well at a low cost. They are using fuel efficiency. Their plan has no class difference. They spend more times in the air rather than other airlines. They make very simple to their customers. Southwest has never offered meal service. They provide only cookies and beverage. Offering meal service can be $40 in their price. 2. What are the foundations of Southwest's competitive advantage? Answer: Even though Southwest had many basics for success, a noticeable competitive advantage could be found in its cost structure. They really handled that issue very well. In 1984, Southwest’s average cost per mile was 5.86 cent and over a decade its cost was enlarged by only 20 percent. This cost benefit helps Southwest to gain amazing productivity from its workforce. This workforce can manage their work at less time rather than its competitors’ workforce. For example, they usually turn around an aircraft in 15 minutes from it arrives at the gate where United and Continental need average 35 minutes. It has a culture where employees love to work. Their pilots spend more times in the air than at other airlines. Employees will do any work at any situation. Once, a customer entered at airport with his dog. But he was not allowed to bring dog at airplane. The gate agent took care of the dog so that person could take pleasure in his vacation. Southwest is not focused on low cost, but also highlights on customer service. Basically customers are the life of its communication. Southwest also treats his employees as “internal customers” it’s has distinctive leadership, unique people management, powerful recruitment process. 3. How are these sources of competitive advantage produced and sustained by what the organization does and how it does it?  Answer: Theses competitive...
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