EXECUTIVE SUMMARY
Southwest entered the complicated airline industry in Dallas, Texas in 1971 and ever since has been exceeding everyone’s expectations with unprecedented strategies. Southwest focuses on customer satisfaction: get the customer where they want to go, with low fares and have fun doing it. Their low cost strategies have been accomplished by reducing a large majority of the input costs that most large airline carriers incur causing those large airlines to charge heavily for fares. Southwest’s customers know that they won’t be given the same costly luxuries that other airliners carry but they don’t seem to mind much based on Southwest’s continued year after profitable year. In addition, Southwest has received multiple awards in outstanding customer service compared to all other airliners.
Southwest Airline Case Analysis
Southwest
Airline’s Strategies:
Southwest Airline’s successful strategy consists of three complementary qualities which are focus, divergence and compelling tagline. This short-haul airline believes that by focusing on friendly service, speed and frequent point-to-point departures, its low pricing is able to compete against car transportation. While other competitors try to delight customers by investing in meals, airport lounges and seating selections, Southwest chooses to eliminate or reduces investments in these industry’s competitive factors. As a result, Southwest’s low prices are unbeatable making them the preferred airline in the industry. With a divergence element in Southwest’s strategy, it is able to innovate and stand apart from its competitors. Instead of competing in the existing hub-and-spoke systems, Southwest created a new competitive factor by pioneering point-to-point travel between midsize cities. This niche strategy turns out to be a huge success as by avoiding congested major airports in big cities, travelers are able to reach their destinations on time and closer to downtown areas compared to major airports faraway from cities. A compelling tagline is another crucial element for effective strategy. Southwest’s tagline which goes “The speed of the plane at the price of the car- whenever you need it” is memorable enough to stay in the minds of travelers. It delivers a clear message and promotes exactly what Southwest Airline has to offer.
Southwest’s strategy is still well-matched to current industry and market conditions but it has to be aware that their successful business model maybe imitated by competitors. Therefore, change is inevitable in a few aspects for this airline to remain competitive. For instance, Southwest can expand its operations to a larger market by using its low pricing strategy to eliminate competitors out of business. One of the current strategies that should remain is the implementations of cost saving technology...
