Southwest Case Analysis Essay

2976 Words Oct 13th, 2013 12 Pages
Southwest Case
Southwest airline is one of the major U.S. low-cost airlines in the United States. It was founded in 1966 from an idea of Rolling King a San Antonio entrepreneur who owned small commuter air service. The original plan was fairly simple attract passenger by offering convenient schedules, getting on time to their destination while having a good experience, all these while trying to charge the most competitive prices. Over the course of the years Southwest had to fight really hard in order to establish itself in the market because of fierce competition. In order to compete with other big airline, Southwest introduced important and revolutionary concept that have deeply affected the airlines world until now a days.
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The Fit Test; How much this strategy fit the company’s current situation? Considering that we are talking about a LCC airline which operates mainly in domestic routes there are at least other seven competitors which are looking for the same market share. Differentiation is very hard especially in terms of consistent advantages, so the only real possibility is just to lower the fares to be aligned with the current market condition. At the same time internally we have a solid balance sheet which shows that although the ticket’s price has shrunk the sales volume has highly compensated, so we have the economical resources to go on.
Second test The Competitive advantage: Having well trained staff that is encouraged to smile and treat well customers is a real plus. In the long term when price discounting might not be possible anymore this might be a real tangible advantage over the competition.
Third Test The Performance Test, Is this strategy producing good Results? Yes, balance sheets are solid and the company has been profitable even in times of crisis also revenues keep on rising.
What I personally like about the strategy is the emphasis posed on customer care, especially the attention devolved in crafting and training the future staff, in a quotation they say:”employees come first and customers second”. The principle behind the statement is interesting because it implies that delivering superior

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