Business Level and Corporate Level Strategies

Topics: Airline, Southwest Airlines, Avianca Pages: 10 (3089 words) Published: October 29, 2014
Running Head: Business Level and Corporate Level Strategies

Business Level and Corporate Level Strategies
Geri E. Shaffer
Professor: Luke White
Business Admin Capstone (BUS 499)
Strayer University, Charleston Campus
7 September 2014

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Business Level and Corporate Level Strategies

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Business Level and Corporate Level Strategies
Analyze the business-level strategies for the corporation you chose to determine the businesslevel strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a good choice. Justify your opinion. The company I decided to research and write about is Southwest Airlines. I recently flew Southwest from Charleston to Minnesota and was surprised at first on how they operated but as I thought about how they did business, like no seat assignments, I began to realize that this is a better way because it allows people to fly at a much lower cost than other airlines. I feel the most important business level strategy for Southwest is the Cost Leadership Strategy for their long-term success. Although I was frustrated with the fact that I couldn’t sit next to my friend at first once I settled down and took a deep breath I came to the realization that it really doesn’t matter because we get to the same place at the same time and we have the week to be together. Some people may not agree or become angry but it all plays out the same.

The Cost Leadership Strategy is one that is set up to produce a acceptable service to their customers at the lowest cost possible. In this strategy the company is always looking for ways to lower their costs by always rethinking how they can save money but still have the same product or service that the customers want all the while ensuring that they can maintain the competitive levels of differentiation. When using this strategy a firm must also examine their support activities so they can find more cost reductions (Hitt, et. all, 2013).

I believe how Southwest operates is a good choice for them because their competitors are not able to comply with the same cost saving methods. Southwest does not run the huge planes and they do not have any first class seats on their aircraft. One question that I’m sure is on the minds of the other airlines is: What does Southwest know that others airlines don’t? They work hard on

Business Level and Corporate Level Strategies

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keeping everything simple and consistent and in turn drive the cost of their service down and maximizes the productive assets and customer expectations. At Southwest one plane fits all unlike other airliners who operate everything from turboprops to wide-body aircraft. Southwest only uses the Boeing 737 which ends up saving the company millions of dollars in maintenance and spare part inventory. Their mechanics only have to have training on the one airframe which also saves costs for the company. Southwest also saves costs by not having to use the hub and spoke system like the other airliners. Most airliners fly from one location by prop in some instances then to the hub where you get on another plane. Southwest does not use a hub but have a point-to-point flying system. Southwest does not have to worry about the delay that most hubs have in which they are able to be in the air more than an hour longer each day them other jets flown by network carriers. They have a simple in-flight service system that consists of just one class of service, a good cabin that is a little more spacious than most of their competitors. There are no assigned seats, saving the consumer money and the crew a lot of time. They don’t serve meals at all and never have, they focus on drinks and snacks. With the system they have in place they are able to get a plane boarded within 20 minutes by having the passenger’s line up according to the number on their tickets. Airline efficiency experts have said that the way they do business allows Southwest to fly an extra flight...

References: Brock, Terry (14 September 2013). Delta vs. Southwest and $200 Cancellation Fee
Retrieved from http://terrybrock.com/delta-vs-southwest-and-200-cancellation-fee/
Forbes Website (2012). Forbes Earning Preview: Southwest Airlines.
http://www.forbes.com/sites/narrativescience/2013/01/19/forbes-earnings-previewsouthwest-airlines-4/
Frances, Abey (24 September 2010)
Krogue, Ken (14 February 2013). A Few Key Difference Between Southwest and Delta.
Retrieved from http://www.forbes.com/sites/kenkrogue/2013/02/14/a-few-keydifferences-between-southwest-and-delta/
Maxon, Terry (29 December 2013)
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