Southwest Airlines Competitive Advantages Case Study Examples

1. The company adds value through its simple, excellent, and low cost approaches in service delivery to the customers. It purchases only one type of plane, Boeing 737 series. This reduces the repair costs and ensures the company gets bulk discounts during purchase. The credit it offers is based on the trips and not the miles covered, thus, attractive to more customers. The company relates excellently with the employees thus team work is encouraged, employee productivity improved, and ticket sale maximized thus higher revenues. Southwest Airlines also adds value through the use of interest rate hedge which has reduced the instability of net income through better matching of the assets and liabilities. The effect of fuel prices is not felt by the company and its fuel expenses are low. The company maintains the hedging on both the oil and gas pricing which in turn maintains the cost of increases due to uncertainties.
2. The competitive priorities of Southwest are its people - both the employees and the customers. The company cares deeply about it people and tries to match its people and the culture.
3. Southwest is not for all traveling customers. Business travelers do not love its simple and basic services. It has only one class of service and no meals, except beverages and snacks.
4.
5. The culture of humor has made the airline fun for both the passengers and the employees. The fun makes the company very attractive for employees and passengers, thus, Southwest needs to maintain its culture of humor in order to be more attractive.
6. By not charging for luggage, Southwest does not miss out on easy money. This is part of its low cost approach that has made it popular within the industry.
7. The success of Southwest airlines is attributed to its strong management and the happy workforce. The management has always avoided anything that would increase the costs or complicate its basic travel position. The company’s workers are highly unionized. They have never had strikes, and are the highest paid in the air travel industry.
8. The company doesn’t offer international flights. It’s localized within USA and only operates in 37 states with 72 destinations. There is also lack of segmented sitting options. Besides, its cargo and freight services are limited. The company’s dependant on only one producer bars it from enjoying the services of other producers. In future, the company can broaden its operations (increase the destinations and operate internationally) and provide segmented sitting options.