Southwest Airlines Case Study Free

Millions of people fly everyday. Southwest airlines provide low-fare travel among 58 cities in the United States. Although the airline industry suffered greatly in the aftermath of September 11, Southwest was able to continue to hold strong. Southwest airline continues to maintain steady sales as much of the industry was affected by changes in laws/regulations and competition entering the market. In the following report there is a brief introduction to Southwest Airlines and their strategy and then what, if anything, they need to do or not do to remain at the top and competitive in the airline industry. The Problem

The major problem of the company is whether they can continue growing and at the same time keep offering the same services to their clients. To continue growing, Southwest Airlines needs to analyze the external environment in order to ensure their success. The Analyses

Six elements of external environment

The Alternatives
The solutions that will be presented for Southwest airlines have to attack two main issues: 1. How will they be able to keep their “Southwest airlines LUV” 2. How to keep their expansion and not affect the image of the airline.

Southwest Airlines has a list of infinite options, many will hinder their image from the inside out (employees to costumers) while providing a set of services that will keep their customers happy for a while, others will make the once homey airline seem like a cold and big magnate and making their image of LUV to fall, so in order to avoid this and help the company keep both goals these are the solutions that will be presented for their dilemma. 1. “Freemium”: What’s free: Web software and services, some content. Free to whom: users of the basic version.” (Chris Anderson, Why $0.00 Is the Future of Business, 02.25.08)

Finding things and ideas that will have no actual cost to the company for the service while being able to charge an “extra” for the commodity of the clients will increase the earnings of the company. 2. Cut costs: Disembark from the tarmac and let the costumers walk to the gateway. The company has to think and be creative in the ways they can keep a cheap rate for their flights while making innovations to their planes, paying their employees and keeping costumers happy with their services. 3. Offset losses with higher fares: Charge extra for a highly demanded day or for purchasing the ticket the same day. 4. In flight outsiders advertising: Offer a space of advertising inside of the aircraft to other companies. The Recommendations

After taking into consideration both the analysis and the alternatives that were presented, it has been decided that the best path the company could take would be to merge both the first and fourth recommendations. The Freemium idea and Advertising inside of the aircraft are things that can be completed in little amount of time and making profit out of both things. This will ensure that the LUV that Southwest Airlines shows towards their employees and customers keeps being the first priority inside of the enterprise while not having to compromise their growth by introducing new ways to make revenue out of things that won’t make them invest more money that they could end loosing. These two recommendations will be attacking and resolving the main issues of the problem: first a way to keep their “LUV” flowing and the second one a way to ensure that the growth that has taken place will not sink the company but instead help them be bigger and better.

Conclusions
The recommendations were the ones chosen because they are the ones that have the less degree of failure, and if failure was to be met the impact in the company would be almost or very close to zero. Southwest is a great case study of how to get employee buy in, to a growth developing business. The key to the success of the southwest model has been asset utilisation and low variable costs, married with strong company culture to aligning values, systems, structures and strategy. By doing this Southwest has been able to sustain competitive advantage by unleashing the potential in their workforce.

References

Dess, G., Lumpkin, T., Eisner, A., McNamara, G. (2011). Strategic Management: Text and Cases / Edition 6. Publisher: McGraw-Hill Companies,Inc.

Theot, T. (2010). Southwest Airlines. Retrieved from: http://es.scribd.com/doc/35327373/Southwest-Airlines-Case-Study

Bhutada, S. Ranadive, S. (n.d.). Southwest Airlines, Just Plane Smart. Retrieved from: http://www.slideshare.net/sarangbhutada/southwest-airlines-case-study