Southwest Airlines Harvard Case Solution & Analysis

Introduction

Southwest Airlines was established in 1971 in Texas and it is presently the market share leader in domestic air travel in the United States and has transported most passengers than any other airline. It also offers scheduled flights more regularly than any other airline. Southwest also has enviable distinction of being the only major U.S. air career that was consistently profitable since 1973 because of its zealous pursuit of low operating costs, low fares and customer-pleasing service.

            Southwest has fought many legal, regulatory and competitive battles that have produced a strong esprit de corps among the personnel of southwest and a drive to endure and flourish regardless of the odds. The corporation built its preliminary advertising campaigns around a major issue of the time as well as its airport location. Therefore, airline's theme became "Make Love, Not War", and the company became the "Love" airline.  Southwest happened to see fruitful development through three distinct periods.

            In September 2010, Southwest has taken a shift in strategy and had entered into Atlanta market by acquiring all the outstanding shares of AirTran holdings. AirTran was also a no-frill airline and served 70 airports in United States, Mexico and the Caribbean. Analysts believed that Southwest’s entry into Atlanta market alone could translate into 2 million additional passengers annually. This merger deal will close in early 2011 and then integration of brand will begin and will take 2 years in order to maintain Southwest’s standards for customer service.

1. Analysis of Strategy Implementation at Southwest Airline

Mckinsey 7s model

The Mckinsey 7s model includes seven related elements, which are arranged as either "hard" or "soft" components. "Hard" components include Strategy, Structure and Systems, which are less demanding to characterize or distinguish and administration can straightforwardly impact them. "Soft" components include Shared Values, Skills, Style and Staff, which can be harder to depict, and are less substantial and more affected by society. On the other hand, these soft components are as essential as the hard components if the association is going to be effective.

Structure

Southwest Airlines’ organizational structure is known for being functional. There are just four layers of management between a forefront chief and the C.E.O. This structure goes for serving in a productive manner through their qualities, which are viewed as the center of their association that include: movement, unwavering quality, quality, casual correspondence and input. As per Arthur A. Thompson and John E. Bet, this closeness and adaptability in the middle of employees and top management significantly supports employee-headed activities: "Instead of purchase 800 workstations for another reservations focus in Albuquerque, organization employees discovered that they could purchase the parts and gather the machines themselves for a large portion of the price of new ones, sparing the organization $1 million."

Strategy

Southwest Airlines is following no-frill or cost leadership strategy. To keep its prices as low as possible, it can be actualized by a few practices previously:

  • A serious utilization of its fleet with normal aircraft use of 6.5 flights for every day and 12 hours and 15 minutes of flight time.
  • The fleet is only made out of Boeing 737; which impressively decreases the extra parts inventories, support and preparing cost.
  • Implementation of a ticketless procedure decreases cost on printing and handling paper tickets.
  • A point-to-point routes method is extremely productive in terms of workforce, workloads and gateway use.
  • Smooth management of workload because of the enduring stream of arriving and leaving flights.
  • Minimum services: no first, no dinners served ready for (snacks and refreshments)
  • No baggage exchange administration to different carriers.

Southwest has also taken a shift in strategy in September 2010 by entering into the Atlanta markets by acquiring all of the outstanding shares of AirTran, which will help to translate 2 million additional passengers annually.

Systems

Southwest began putting resources into new data frameworks to substitute to its ticketless framework, back-office bookkeeping, payroll, human resources with a specific end goal to enhance information stream and profit from higher operational productivity and client administration capacity. Actualizing practices and Information Systems to back operational greatness was a convention under Herb Kelleher with no doubt carried on by present C.E.O. Being persuaded that clients are more inclined to go with Southwest in the event that its flights are solid and on time, administrators give careful consideration to on-time landings and take-offs. For this reason, Southwest administrators and employees are all proactive with regards to recommendations for enhancing practices and methodology.

Style

            The management style of Southwest airlines is portrayed by how significantly it deals with its employees' prosperity. The management considers it to attain higher client fulfillment: "Keep employees happy, then they will keep customers happy". Management profoundly accepts that treating their employees well and making them cherish their job will commonly lead them to treat clients warmly and respectfully in exchange..........................

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