Southwest Airlines - Hbr Case Analysis

Topics: Southwest Airlines, Airline, Boeing 737 Pages: 2 (761 words) Published: January 17, 2011
Southwest Airlines (SA) was founded in 1971 after a careful market analysis. Its founders believed in a low cost strategy. Through the Wright Amendment, which not only prohibited any air carrier from offering direct service into Love Field from any place beyond Texas and the four contiguous states of Oklahoma, Louisiana, Arkansas, and New Mexico, but also made more difficult the life of passengers coming from outside theses states and forbid the advertising to flights coming from Love Field, the competition made SA adopt a differentiation strategy. Which factors became crucial to the success of this company since its beginning? SA chose airports that were underutilized but were close to metropolitan areas. There was a main reason for the Aircraft choice, and its entire fleet of Boeing 737’s. It was a fuel-efficient fleet, and standardized, making the maintenance easier. Low cost fares, frequent and on-time flights, 15-minute gate turnarounds, high aircraft use and point-to-point routes gave them great advantage over their direct competitors (Continental Airlines, American or United Airlines). SA also chose to fly to secondary airports and not to have connections with other airline companies. With the increasing success of SA, its competitors started to try to replicate SA’s strategy. But the cost structure was not what gave SA the main competitive advantage in the market. The most important attribute was the human capital and the work environment where workers performed their tasks. SA’s Human Resources Department, called “The People Department”, had a huge impact on employees and on their way of working. “Employees are the Customer” of the Department. The following statement explains what the company’s philosophy was: “By recognizing that our people are the competitive advantage, we deliver resources and services to prepare our people to be winners, to support the growth and profitability of the company, while preserving the values and special culture of SA”....
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