Southwest Airlines Case Study

This growth in combination with the growth from the acquisition of AirTran has put a strain on the airlines employees. This strain has had an effect on service “Southwest was last in on-time performance among major airlines and last among big airlines in baggage handling” (McCartney, 2014, p. 16). “Employees resist change for a variety of reason,” (Parnell, 2014, p.294). It has also had a negative impact on labor union contract negotiations (McCartney, 2014). “Southwest is 85% unionized,” (Parnell, 2014, p.389).

Do you think Jim Sinegal is an effective CEO? What grades would you give him in leading the process of crafting and executing Costco’s strategy? What support can you offer for these grades? Refer to Figure 2.1 in Chapter 2 in developing your answers.

10. What recommendations would you make to Jim Sinegal regarding the actions that Costco management needs to take to sustain the company’s growth and improve its financial performance?

What are the key success factors for Southwest airlines? What are the key things it does to keep its costs lower than competitors?

Southwest Airlines shot out of the gates, much to the chagrin of their competitors as a short haul, low fare, and high frequency carrier. As SWA expanded and deregulation occurred, they had to decide what kind of airline they wanted to be and how they would adapt to the changing environment. The FAA reports that passenger numbers are expected to reach a billion passengers in 2023 (FAA, 2011). Most Airlines are responding to the increased demand by centralizing and consolidating their assets. This in turn creates a situation where capacity is maximized in some airports and congestion increases causing significant delay. Demand will continue to rise over the next few decades and these airlines must rely on regulators and policy makers to upgrade the very necessary infrastructure and technology. Southwest’s strategy is to remain a point to point carrier instead of the traditional hub and spoke carrier, satisfying their customer demand with lower congestion at underutilized airports with more flights. However Southwest continues to remain flexible looking forward as it adopts hub and spoke techniques, coordinates with the FAA and governing bodies, and invests heavily in its most important airports to stay ahead of the pack.

Total Resource Network (TRN) congratulates Southwest Airlines for thirty-eight years of consecutive profitability. This is a major accomplishment that should be applauded especially during this economic recession and recovery period. Southwest’s success has been attributed to their core values and mission that begin with their employees and exceptional customer service. These two attributes along with low airfares have

Southwest’s management deserves a grade of A+, it is hard to see what Southwest could have done much better. The best examples being the company’s array of employee management practices and their strong commitment to identifying and implementing ways to keep its costs low. Southwest is a company with no glaring weaknesses or critical operating problems, but there are areas of concern. Southwest has lost some of its cost advantages in recent years, rival airlines have been slashing costs to survive, particularly in the areas of pilot salaries and employee salaries. Southwest has also been moving into airports with higher landing fees and more congestion.

How would you describe the competitive priorities of Southwest? How does this differ from other airlines?

In the opinion of Dr. Grace S. Thomson, “a heterogeneous mix of long and short-haul in very thing segments, passenger, density, and per capita income at end points gives [Southwest Airlines] competitive advantage. The way to establish a company in such a market as the airline industry would be to strategically expand in to airports with less competition. Southwest Airline capitalized on this fact to become a national airline (Keller 2008). Southwest Airlines satisfies what were once negligible markets. Southwest serves “64 cities in 411 non-stop city pairs” (Thompson 2008). Saturating these markets has allowed Southwest Airlines to expand without putting a strain on its pocket book (Keller

The CEO is recognized as the principal leader of an organization and the ideas and philosophies are unquestionably organized by this individual (Parnell, 2014). While the CEO typically harnesses this power at all operations, it is positively stouter at Southwest Airlines due the two aspects. One Herb Keller is not only the CEO but also founder and part owner of the corporation, therefore, he is respected and known throughout the entire organization. Additionally, Herb has been engrained into the Southwest Airlines operations for numerous years, therefore almost all procedures of the company have been developed by him.

I believe that Southwest’s culture is critical to its success. Their can do attitude has helped them survive through rough times. Their out of the box and thinking and punchy advertising have helped them gain traction. Probably the most important aspect is their thought process that the employee should love to work there. After all, a happy motivated employee works better, faster, smarter, and is more pleasant to customers than an unhappy one. The loss of a great leader is always hard on an organization. I think that the most important point that a new leader can do is to not try and replace them, and not try to mimic them, but to channel that energy and add to it. Although Kelly did make a revision to the mission statement he left most of what existed alone and didn’t try to make a personal mark, but to continue in the tradition of the company.

In this paper I have researched in to Southwest Airline, I have focused to write a three to four (3-4) page paper in which I will, determine how Southwest Airlines’ corporate culture differs from other airlines. I will then analyze three (3) ways that Southwest’s unique culture has benefited the airline and its employees and eventually I will speculate how Southwest Airlines would continue to thrive as a company if its current corporate culture would need to change in the near future.

This proposal addresses the needed steps to be taken in order for Southwest Airlines to see continued growth in the airline industry. Southwest Airlines has been able to remain one of the most profitable airlines in the industry for an extended period of time. Even with the hindrance of the 2001 terrorist attacks involving airplanes and the U.S recession of 2008, Southwest has continued to see strong revenue growth. Meanwhile, other companies were experiencing major losses and in some cases folding. Southwest Airlines has capitalized on the company’s strength of being the top low cost

Based on the case study, and on online and offline research into Southwest Airline’s current state, complete the following Tasks:

When one guises at organizational culture, one should correspondingly look at the principles, beliefs, and the vision of the Company. Southwest Airlines’ CEO, Herb Kelleher, is a man whose approach of treating all individuals with dignity and admiration helped the Company gain a competitive advantage over major airlines. The responsive customer service, reliability,