Southwest Airlines Harvard Case Solution & Analysis

Southwest Airlines Case Study Solution

VRIN Analysis

VRIN analysis is an analytical technique for the evaluation of the company’s resources. It is a perfect analysis of the firm’s resources’ position in the market. It is about how expensive the firm’s resources in the market are, where the business operates and how easy it to obtain these resources in the market. A rarity in VRIN defines that how unique your product or service is. It can be a temporary competitive advantage for the business. The situation when more than a few companies have the same resources or use the capacity similarly; it leads towards competitive parity. It is about imitation. It means that how much your products and services are imitable and can be used by the competitors. As airline investments and other costs are higher; the business cannot be that much easy to be created by other competitors.It is about the existing resources supported by arrangements and the organization capability or incapability to use it properly. The firm must organize its management system, policies, organizational structure, processes, and culture to analyze the value, rarity and imitability of resources. Non-substitutableis an ideal resourceSouthwest can have, which cannot be copied by its competitors.

Strengths and Weaknesses from Internal Analysis


Strong Corporate Culture and Employment Model

The company’s employment model is one of the core reasons behind its success as high labor productivity and friendly interaction between the customers and the staff are experienced. The company’s no lay off policy, attractive compensations and rigorous training and screening process differentiates the company from its competitors, which has resulted in high labor productivity, customer satisfaction and low operating cost for the company as compared to its rivals.

Different offerings

As the company introduced two types of passengers. It also discovered many other offerings that aren’t offered by the other airlines operating in the US. Southwest introduced a pricing technique by charging $20for flying in Dallas, San Antonio, or Houston as the competitors charge $28. Free liquor bottle is also an offer by Southwest if travelers pay $13 to $26. The promotions given by the company were not for initial stages but these are the regular services from the company. The online reservation of seats was also introduced by Southwest so the customers could also visit the website to check and book seats online.

Business Strategy

The no-frill strategy employed by the organizationis the core reason behind its success in the airline industry as none of its rivals offer their services at low fares. Also, the company strongly emphasizes on improving the customer experience and has taken many initiatives to satisfy itscustomers. These initiatives include providing internet connectivity to its customers, online booking facility, offering rapid rewards frequent program, implying no additional fee or charges when customers change their flight schedule or seat selection.


Financial Position

The association’s monetary methodology depends on moderate methodology as it has confidence in keeping up low degrees of obligation.Nonetheless, this system probably won't be bolstered by the investors to develop and grow the business, and the organization would require hugeassets. The investors would favor financing the extension and development through an obligation as raising the assets through the value sources includes significant expenses, which mightweaken the shareholding control.

First Class Section or Fancy Clubs

The company does not provide any fancy clubs or first class section in any of its planes, which is offered by its competitors; therefore, the organization might face reduction in sales as a result of customers switching to the rival airlines. Fancy clubs and first class sections in planes enable the customers to relax and improve their travel experience; therefore, Southwest Airlines might face reduction in sales as a result of not offering these services to the customers.....................................


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