Business Analysis : The Airline Industry Essay

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The airline industry is one that gets a lot of complaints for having high prices and bad customer service. Usually in this industry, companies have to charge high prices in order to realize a profit. However, a model airline company that holds the key to a great business formula would be one set up and run like Southwest Airlines, which has been able to stand out by being a cost leader in the industry. According to Hill, Jones, and Schilling (2014), a cost leadership strategy is when a company has the lowest cost of operation in an industry. Schilling et al. (2014) went on to state that cost leadership is usually sought when a company has a relatively large market share, and the company has been able to lower its costs because of economies of scale. A company operated in a manner such as Southwest would make the effort to offer its customers low price travel tickets that are made possible by operating in a more efficient manner than traditional airlines. The company would keep the amount of time airplanes spend on the tarmac low by keeping them in route to different destinations. In addition, the company would offer only a few extra thrills to its customers, but the company would offer the best service possible throughout the entire organization for all of its guests. This strategy would keep the profits coming in as the company is able to meet and exceed customer service needs. An effective strategic reward system that can be used at various levels within a low cost leader…

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