- Why has Southwest been so much more successful than its competitors?
Southwest’s entrance on the air carrier market signified a new trend in the airline industry, as the company introduced the low fare rates, targeting as its competition the automobiles and their transportation prices on relatively short distances. Because the regular Southwest flights initially included solely short distances flights, which would last around one hour, the company did not served food on board, other than peanuts, but its cabin crews would entertain the customers by engaging them in various contests (such as “who’s hot the biggest hole in your sock contest”(Heskett & Sasser 6)). The closeness and friendliness shown to the customers, as well as the fun approach of the Southwest staff, permanently prepared to improvise, offering like this an original flying experience to their passengers, made Southwest more successful than its competitors. The organizational behavior, proposing fun-LUV-ing attitude (Haskett & Sasser 3) was an external expression of the company’s organizational values, as the company promoted a sense of fun and friendly working atmosphere, wherein the comradeship spirit dominated over the bureaucratic procedures that other flying companies valued.
This permitted and facilitated the homogenization of the flexible working rules, which allowed the company’s staff fair compensations and in the same time implied that they could be engaged in other activities that were not parts of their attributions (such as Pilots handling baggage, or team coordinating the gate operations), if situations demanded (Haskett & Sasser 4). These internal work processes define Southwest’s business philosophy, according to which a positive work environment generates good business. This working philosophy, alongside its staff’s outgoing personalities and the company’s low fares, plus its on-time operations and the “bags fly free” policy (Haskett & Sasser 5) (customers did not have to pay for up to two luggage) made Southwest more successful than its competitors.
- How has the original strategy been altered in recent years? How, if at all, have thesechanges affected Southwest’s key success factors?
Because the increase in the fuel prices also lead to increased operating expenses, Southwest had to adjust its operations and its business strategy in order to continue remaining competitive. As such, the company extended its operations to new destinations, having like this the opportunity to include meals on the board of its airlines, which proved to be very popular on distances longer than three hours. The company extended to new markets, where there was a need of a LUV culture, operating in an organized manner, reducing the delay-rate as much as possible. The entrance of new low-cost carriers on the market came with the emergence of the sophisticated Internet processes that allowed the shopping, the reservation or check-ins to be performed on-line. Southwest had to adjust to this technological advancement, which meant redesigning its “ancient” operations, developing supporting technology in order to allow various processes to be performed online (such as accommodating code sharing with other airlines, searching for new routes, boarding processes), remaining competitive on its niche market (Haskett & Sasser 7). Likewise, Southwest’s changed its original strategy that consisted in an open boarding procedure based on the principle of first come first served, allowing customers, through the implemented boarding change, to reserve places, through “Business Select” service, launched in November 2007. This service served the priority boarding needs of the passengers who considered annoying to wait in line for boarding (Haskett & Sasser 8). These changes contributed to the company’s key success factors, as it indicated that the company possessed the potential to innovate (answering the evolving needs of some of its customers), while preserving its LUV business identity.
- What kinds of things over which Southwest’s leadership has some control could gowrong? What should be done to make sure they don’t happen?
The business model developed by Southwest was copied by other airline companies activating in various corners of the world, such as Air Asia, Spice-jet, Ryanair, Easy-Jet, or Jet Blue (Haskett & Sasser 1) to name just a few. Precisely because its business model was a success story, being the skeleton of other businesses’ development might lead to allowing other companies to overcome its business strategy, challenging its authority in the low-fare airline market in United States. In order for this not to happen, the company must continue to innovate, addressing its customers’ increasing and evolving needs, while nevertheless, maintaining intact its original values that made Southwest famous for what it is today.
Another aspect over which Southwest leadership has some control, but could go wrong is represented by its operation activities, which have become challenging, mostly after its expansion into new regions and new airports. As such, its flights could be delayed, or cancelled, mostly due to external forces that might intervene in the company’s flights’ organization. For this not to occur, the company needs to adjust its operational plan in accordance with the activities of the airports in which it operates and to back up its services with additional planes, which are currently in the company’s possession. Likewise, the company needs to assign veteran employees in its new operation basis, in order to instruct the new employed staff on the formal and informal Southwest guidelines and business philosophy and to instill them the Southwest organizational culture, to which they need to adhere, transmitting the company’s values to Southwest’s customers in its new flights.
- Would you recommend that Southwest Airlines acquire the gates and slots available atLaGuardia Airport? Why?
Southwest’s entrance in LaGuardia Airport would imply significant shifts from its original business strategy, as operating on this airport would mean entering the New York destinations, compared to small distance destinations initially targeted by the company. In addition, operating in New York area implies more chaos at the control and boarding gates and increased concerns for the passenger transfer to other destinations, with flights operated by Southwest. Entering LaGuardia would also mean increased delays or congestions, which could impact the company’s overall operations due to planes’ delays in one of its basis.
Southwest’s entrance on LaGuardia would also translate into changing the company’s focus from its original vision of competing against the automobile fares to competing against the America’s top players in the airline industry. This comes with the challenge that the company would have to adjust its corporate values to meet the requirements of the LaGuardia passengers, focused both on business and on leisure traveling.
Although the company should be very careful at preserving its values, the entrance on LaGuardia airport would represent a huge opportunity for Southwest to grow its business, reaching another level and becoming a national competitor in the airline industry. Deciding to enter LaGuardia airport by acquiring the available gates and slots would take Southwest into a new business era, where its old business strategy should be adjusted to an increased competitive market. The company should acquire the gates and slots available at the LaGuardia airport because it would increase its business and in changing times the company needs to be present on new markets, making its presence sensed among the passengers and among the competitive airlines. Nonetheless, entering LaGuardia would represent a challenge for the company to improve its operations and customer services, increasing the value of its provided services.
Works Cited
Heskett, James, L. & Sasser, Earl W. Jr. “Sothwest Airlines: In a Different World” Harvard Business School. Vol. 9, pp. 1-16. 2013. Print.
