Introduction
This paper presents a detailed analysis about Southwest Airlines starting from how they started and how they reached their current position. It describes their strategic planning, their sources of capital, their market growth, their marketing planning and many other things. It also gives a complete detailed note on their successes and failures and which factors have led to their failures and successes of Southwest Airlines. The culture and the behavior of their employees is an important factor. In short it covers all the factors that are important to the success of an organization will be discussed in detail.
Rolling King started this airline. King first owned a very small air service. King heard from people the problem of long distances and the time taken to cover those long distances. King started his business from a ship Le idea to provide people with the best service to travel from one place to another and to have a comfortable and safe journey; to be at their destination on time and the fares should be according to the automobile. In 1967, King submitted an application to the Texas Aeronautics Commission to start his new company. Then when the application of King was accepted, he started to gather people that were interested in doing motivating and creative things. It initiated its first flight in June 1971.
Strategic Planning
It decided to have its hostesses in attractive dresses which can attract the customers towards it. While it is recruitment, it said, “Job will be given to you if you can measure up.”
During day time as most of the passengers travel in the Southwest Airlines, so it decided to give alcohol-free beverages to its client because most of the people do not drink during day time because of their business meetings (Wagner and Schaltegger, 2004).
Southwest Airlines also made strategies to increase the number of their flights without increasing the number of their planes. They set up a ground crew to perform the activities in loading the passengers and maintenance of plain.
As there is two types of customers one that are price sensitive and one that are time sensitive. They tailored strategies according to the convenience of both the groups.
Sources of Capital
The sources of capital for Southwest Airlines are following:
Cash
Operating leases
Bank loans
Cash
It is the cheapest way of financing in an airline. For this, there is no need for any special requirements. It can be easily invested whenever needed without much hassle. However, one problem is that this source of finance is highly volatile. There are more chances of loss during the recession
Operating Leasing
In operating lease the aircraft are obtained for shorter span on a temporary basis. The businesses mostly give their aircraft in the lease when the season of traveling is on peak and most of the airlines want new aircraft.
Bank Loans
Banks give loans to the airlines which they use in their further investment. Banks can repossess the aircraft from the airlines if they do not return the loan back to them. Bank has to face some risk to giving its loan.
Ethics
Southwest Airlines along with its profit and success also keep in mind the ethics of treatment with their employees and their customers. One major and good thing in Southwest Airlines is that they give their employees more value than their customers. They used to say that our employees are first and then our customers. They provide their employees with the security of their jobs and a very well treatment inside the organization. They also keep in mind and give importance to the ethics with customers. They do not believe on the thing of earning profit first without keeping their customers in mind. They provide their customers with the best services (Freeman, 2010).
Marketing Research
Leadership
Leadership skills are very important for the success of any organization. Southwest Airlines are performing its leadership activities in a very best manner. They hire their employees after proper training and recruitment. Then after their recruitment they have established different training centers and academies for the education and training of their employees where they give them training and make them skillful. They also managed each and everything in such a manner that it attracts its customers towards them (Freeman, 2010).
Managing Growth
Southwest airlines are making growth day by day. They have made different strategies to increase their customer level.
Expansion in New Geographic Markets
They are expanding their offices in different areas of the world. It will result in their growth when more people will become aware of their services and their work and will result in their growth in international markets.
Increasing Flights in Areas Where Rivals Are Cutting Off
Southwest Airlines can also increase its growth in the market by increasing in flights in those areas where their rivals are not serving. They can attract the customers by offering low fares as compared to their rivals. It will attract more customers (Wagner and Schaltegger, 2004)
Shifting Planes to Routes with More Growth Opportunities
Southwest Airlines can also make growth by shifting its flights to the areas that are more profitable and having more customers. It will make them more successful and help them in achieving their goals.
Success of Southwest Airlines
Southwest airlines have achieved much success from its start. The reason for this success of Southwest Airlines is that they focus both on their tangibles as well as intangibles. With the quality of their planes, they also focus on the management, training and maintenance of their staff. They also focus on their treatment and relations with their customers. It is the most important factor that resulted in their success, and they are at heights (Freeman, 2010).
Conclusion
This report about Southwest Airlines has explained that they focused more on their quality than quantity from the start of their business which increased the number of customers and made them loyal to Southwest Airlines. The success cases of the business indicate that sustainable growth is only possible by following ethical responsibility guidelines. The capital alone is not possible for sustainability
References
Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge University Press.
Wagner, M., & Schaltegger, S. (2004). The effect of corporate environmental strategy choice and environmental performance on competitiveness and economic performance:: an empirical study of EU manufacturing. European Management Journal, 22(5), 557-572.
