Southwest Airlines - Using Human Resources for Competitive Advantage

648 Words Feb 10th, 2007 3 Pages
Assignment Questions

1. What is Southwest's competitive strategy? What are the sources of its success? How does it make money in this business?
2. What are the foundations of Southwest's competitive advantage?

Southwest Airlines' successful and profitable business model has been driven by several strategies: high aircraft utilization; standard fleet; charismatic leadership; low fare carrier; excellent customer service practice; attractive frequent flier program; innovative and creative marketing program; performance focused organizational culture; strategic human resources management and a lean operations.

Southwest fleet is made up of mainly Boeing 737 fuel efficient airplanes which spent an average 11 hours in the air daily
…show more content…
The human resources practices have created shareholder value by means of low turnover, high productivity and excellent job satisfaction level. Southwest has designed cross function work coordination whereby once the airline reaches a destination, every member of the flight and ground crew does everything necessary to get the next flight out on time. Remarkably the airline achieved a turnaround rate of 70% of their flights had an average fifteen minutes ground time in 1991. This lessens labour costs, significant productivity advantage in terms of equipment utilization, avoidance of long delays and makes flying with Southwest attractive to the travelers.

Southwest has an organizational culture that emphasizes "LUV" and "FUN" which is aligned to the airlines business strategy creating an additional advantage. "LUV" refers to the company's core values of respect for individuality and genuine concern for others. "FUN" refers to the company's belief in employees enjoying themselves at work and creating an atmosphere, which allows customers to have fun. The word "Customer" is consistently capitalized in the company's corporate communications and practiced in its customer service performance.

Southwest business model have resulted in the achievement of consistent on-time performance, having the fewest lost
Open Document