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    Ashish Verma
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    Southwest Airlines has gained a competitive advantage by focusing on low-cost, convenient short-haul flights that meet customer needs. Key factors contributing to Southwest's low costs include operating from secondary airports, quick 15-minute turnarounds, a single aircraft type (Boeing 737), and maintaining a culture of high productivity and efficiency. However, increased competition from other carriers adopting Southwest's low-cost business model and rising costs threaten its advantage. To maintain its advantage, Southwest should continue focusing on short-haul routes, keeping labor costs low through good employee relations, and modernizing operations through technology upgrades while holding to its low-cost business model.

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    Southwest Airlines has gained a competitive advantage by focusing on low-cost, convenient short-haul flights that meet customer needs. Key factors contributing to Southwest's low costs include operating from secondary airports, quick 15-minute turnarounds, a single aircraft type (Boeing 737), and maintaining a culture of high productivity and efficiency. However, increased competition from other carriers adopting Southwest's low-cost business model and rising costs threaten its advantage. To maintain its advantage, Southwest should continue focusing on short-haul routes, keeping labor costs low through good employee relations, and modernizing operations through technology upgrades while holding to its low-cost business model.

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    63 views6 pages

    SouthwestAirlines Group10

    Uploaded by

    Ashish Verma
    Southwest Airlines has gained a competitive advantage by focusing on low-cost, convenient short-haul flights that meet customer needs. Key factors contributing to Southwest's low costs include operating from secondary airports, quick 15-minute turnarounds, a single aircraft type (Boeing 737), and maintaining a culture of high productivity and efficiency. However, increased competition from other carriers adopting Southwest's low-cost business model and rising costs threaten its advantage. To maintain its advantage, Southwest should continue focusing on short-haul routes, keeping labor costs low through good employee relations, and modernizing operations through technology upgrades while holding to its low-cost business model.

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    of 6

    CASE: SOUTHWEST AIRLINES (A)

    Submitted by:
    Abhinit Kulkarni 2010061 Abhra Majumdar 2010063 Anand Seetharaman 2010065 Devashsish Goel 2010076 Isha Arora 2010083 Kalpak Iyer 2010085 Kaustav Ganguly 2010087 Lara Pinto 2010090 Sarika Sinha 2010107

    THE COMPETITIVE ADVANTAGE OF SOUTHWEST AIRLINES

    Southwest Airlines has gained competitive advantage by creating value for customers in a niche market segment.

    Cost leadership strategy of low price through low cost The airlines serves a market in which low-cost, convenient point-to-point travel is desired

    The company fulfills the customer needs by operating short-haul, high frequency schedules characterized by low fares.

    The competitive advantage is based on responsiveness to customer needs, quality, efficiency, innovation, and addressing employee needs.

    THE SOURCE OF COMPETITIVE ADVANTAGE- FACTORS AND ACTIVITIES/FEATURES OF THE COMPANY AND ITS ENVIRONMENT THAT GENERATE THE ADVANTAGE
    Features of the Company Activities/ Features of its Environment

    2nd tier airports 15 min turnaround Low Cost 737 only

    No amenities
    High productivity Short haul / point to point Culture/ HR Policies

    Internal Environment - Managed Conservatively- Expansion when enough funds - Enters when competitors withdraw- gain market share - Cost kept low- low price of fares- steady demand -Employees work hard- driven by loyalty - Innovation oriented & aggressive leadership The Value Proposition- Customer Perspective - Convenience (vs. buses / trains) - Low price

    Focus

    Underserved market Treating employees as family

    WHAT ARE THE THREATS TO ITS COMPETITIVE ADVANTAGE?


    The current strategy of SWA will ensure sustainable competitive advantage to it:

    Extra costs are maintained low- no baggage transfers, standardizing equipment and maintenance at small airports SWA enters the market with low prices- without giving attention to price wars started by competitors and then when competitors finally make way, SWA benefits with increased market share. Simplistic model for all operations SWA has exclusively focused on short distance flying- increases revenue by carrying more passengers per day More players in the short route market at lower cost by imitating Southwests model

    Increased cost
    Poor labor relations prevalent in the industry.

    WHAT SHOULD THE COMPANY DO TO MAINTAIN/STRENGTHEN ITS ADVANTAGE?

    Remain focused in short segment travel

    Keep support of its work force


    Maintain the simplistic model of operations(ex: reusable cards for boarding, Frequent flyer program based on number of trips, etc.)

    Maintain good labor relations to avoid troubles of work halts, strikes.


    Revamping IT base to support increasing operations and thereby reducing the time on manual operations.

    THANK YOU

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