1.) How would you characterize the business model of Southwestern Airlines? How does this differ from the Business model used at many other airlines, such as United and American Airlines?
Southwest Airlines strategy of focusing on short haul passenger and providing rates as low as one third of their competitors, they have seen tremendous growth in the last decade. Market share for top city pairs on Southwest's schedule has reached 80% to 85%. Maintaining the largest fleet of 737's in the world and utilizing point-to-point versus the hub-and-spoke method of connection philosophy allowed Southwest to provide their service to more people at a lower cost. By putting the employee first, Southwest has found the key to success in the airline
…show more content…
With the industry average sitting at one or two flights per day, Southwest set itself leaps apart by averaging 10 to 12. Maximizing utilization and minimizing ground time were the key elements to Southwest's PROFITABILITY. If the short haul passenger was the backbone of Southwest Airlines success, then their 737s were the lifelines that supported it. By choosing the 737 as the airplane for all of Southwest's flights, the company saved time and resources in training its employees. The crew could be easily substituted for one another due to the extensive training on the 737. Low costs and, therefore, low fares are an enormous competitive advantage, when combined with their high-quality and loyal workforce. A very unique culture was found at Southwest Airlines among all of its employees. The company generated a culture around prioritizing their workers over their customers. This family oriented atmosphere that was created enabled worker retention and customer service to skyrocket.
4.) How secure is Southwest’s competitive Advantage? What are the barriers to imitation here?
Some of Southwest's prices cutting policies were also some of their weaknesses. Unlike their competitors, Southwest does not offer first class seats on any of their airplanes. This may have potentially caused Southwest to lose first class customers to rival airlines. Since their flight times usually run less that an hour, Southwest implemented the policy of not providing meals on