Use Hambrick and Fredrickson's Model to Analyze Southwest's Strategic Choice at the Time of the Case and Today.
Use Hambrick and Fredrickson's model to analyze Southwest's strategic choice at the time of the case and today.
The choices made for the 5 major elements of strategy that affected Southwest’s strategic choices have changed a lot.
Arena:
Southwest decided to provide safe and low-cost transportation with maximum customer service. Southwest used to operate short-haul flights mostly in the south-west region that have good climate. At that time, to keep costs low and have competitive advantage choose those routes. Not to hamper the companies growth, it later (1996) started to expand to east-coast (providence, RI , Florida) and not-so good climate. Recently it started operating in all major airports such as Newark, Philadelphia etc¬1 and even some international cities2.
Vehicles:
Southwest carefully choose each market where this is no competition, congestion (example Providence, RI) and bad weather. So that it can provide low cost and value to travelers by having very quick turnaround times. It provided simple point-to-point service using very less ground staff.
With expanded routes this has changed in the now long-haul routes.
Long-haul requires complex computer systems and more manpower on ground to manage the operations, reducing the profitability in both cases.
Southwest had and still has the best safety record for a low cost airline.
Differentiators:
The southwest culture and the customer service were and are still a major differentiator. Southwest was the first airline to provide ticketless travel and now everyone does it. It used to be the cheapest in 90’s nowadays it is the cheapest if you include the baggage checkin and other added fees3.
But Southwest always focused on differentiating themselves by some means. Nowadays it is by providing free checked baggage, no changing fees etc4. By moving with times it is adapting and differentiating itself
Stage:
Southwest followed a “go-slow” philosophy and targets underserved markets. It is
The choices made for the 5 major elements of strategy that affected Southwest’s strategic choices have changed a lot.
Arena:
Southwest decided to provide safe and low-cost transportation with maximum customer service. Southwest used to operate short-haul flights mostly in the south-west region that have good climate. At that time, to keep costs low and have competitive advantage choose those routes. Not to hamper the companies growth, it later (1996) started to expand to east-coast (providence, RI , Florida) and not-so good climate. Recently it started operating in all major airports such as Newark, Philadelphia etc¬1 and even some international cities2.
Vehicles:
Southwest carefully choose each market where this is no competition, congestion (example Providence, RI) and bad weather. So that it can provide low cost and value to travelers by having very quick turnaround times. It provided simple point-to-point service using very less ground staff.
With expanded routes this has changed in the now long-haul routes.
Long-haul requires complex computer systems and more manpower on ground to manage the operations, reducing the profitability in both cases.
Southwest had and still has the best safety record for a low cost airline.
Differentiators:
The southwest culture and the customer service were and are still a major differentiator. Southwest was the first airline to provide ticketless travel and now everyone does it. It used to be the cheapest in 90’s nowadays it is the cheapest if you include the baggage checkin and other added fees3.
But Southwest always focused on differentiating themselves by some means. Nowadays it is by providing free checked baggage, no changing fees etc4. By moving with times it is adapting and differentiating itself
Stage:
Southwest followed a “go-slow” philosophy and targets underserved markets. It is