Strategic Position Differences Between Southwest Airlins and Continental Airlines

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The Differences of Strategic Positioning Between Southwest Airlines Corporation and Continental Airlines Nowadays, Porter’s 5 Rules of Strategic Positioning as a most common business theory plays a significant role in operating companies and planning business activities. Southwest Airlines Corporation (Southwest) proves that clearly by its success. And the year-end results of Southwest marked 29 consecutive years of making profit (Govindarajan and Lang, 2002). I will elaborate how the Porter’s 5 Rules of Strategic Positioning be applied in Southwest in following essay.

Southwest’s activities fully satisfied customer needs, applying the Porter’s first rule. It has short trips with low price and the frequency of flights is very high. For the customers who want easy check-in, Southwest uses automatic ticketing machines and do not have seat assignments (Govindarajan and Lang, 2002), which also applying to the first rule. However, Continental Airlines (CA) has different classes as well as using travel agents to sell tickets. In addition, the role of the manager is crucial in managing human resources and facilitating business culture. Those activities have used the third rule. Southwest hires new employees very rigorously. For this reason, the efficiency is improved considerably. This also meets the customer needs (First rule). CEO Herb Kelleher makes employees have the highest income with low employee turnover in the industry. Kelleher claimed:“ If they’re happy, satisfied, dedicated and energetic, they’ll take real good care of the customers.” That means customer needs can be respond better, which applies the first rule ( Magretta, 2002). He also builds a great corporate culture and develops high-energy local autonomy, hard work and creativity. Hence, all the activities have been targeted over a long-term period.

Similarly, CA s also facilitates online check-in to cater customer needs. Agostino (2006, p1) pointed: “CA is relying on a nimble IT department that...
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