Question
Analyze the Southwest case study strategically.
Answer
Introduction
The Southwest Airlines case study report emphasizes methodologies and frameworks for improving organizational efficiency and performance through strategic management. This report analyses Southwest Airlines, America's first budget airline. This paper analyses the significant problems Southwest faced in adopting new leadership management by 2001. The stated difficulties would also affect the dynamic southwest culture and transportation costs due to salary and fuel increases. The Southwest Airlines case study paper will also cover the company's expansion efforts. The next debate will clarify Southwest's current status and facts. After giving in-depth information, the paper analyses Southwest Airlines' external environment and the tactics implemented to balance the accompanying dynamics. This research examines how Southwest Airlines has become one of the top five performing firms in the US. In the report's conclusion, Porter's Generic Strategies and Goolsby's Leadership Model are presented as academic foundations for the Southwest Airline's case study framework. Porter's Generic Strategies focus on operational market competition and cost-effective tactics, while The Goolsby Leadership Model emphasizes culture. After evaluating these two academic notions, the remaining theoretical concepts are added to the Southwest case study. In the report's last part, recommendations to increase corporate production are presented.
Problem-solving
This paper analyses Southwest Airlines' 2011 leadership shift situation. James F. Parker was elevated to CEO from General Counsel, while Herb Kelleher promoted Colleen C. Barette to COO from VP of customers. The company's unexpected leadership shift drastically altered its corporate culture (Milliman et al., 1999). Instead of working together to achieve the organization's aim, higher authorities, management bodies, and personnel grew apart. Before the leadership transition, the management team used to celebrate staff birthdays and other events.
The company's management faced a new problem with the emergence of new low-fare competitors. The biggest rivals imitated Southwest's business model, so the management team reformed and improved it. The corporation modified its business plan to attract more consumers. The corporation added entertainment systems and leather seats in this plan. The company's innovative business strategy made it one of the most successful in the US within a few years. The firm was unclear if existing customers would continue to favour its service if a new replacement at the same price provided better service. The Southwest Airlines case study paper examines how competition, culture, and cost parameters affect the firm. Should Kelleher's leaving have affected the company's business?
Southwest Airlines case study analysis
Southwest airlines went from a modest Texas carrier to the fourth-largest in 1971. Initial segment analyses strategic management before leadership transition. Before the leadership transition, the firm grew quickly. The higher-ups' expectations of subordinates were clearer, and the entire workforce worked enthusiastically to achieve the organization's purpose. Southwest's personnel make it one of America's top-grossing firms. Southwest airlines provided Americans affordable and leisurely travel. The firm focuses on short interstate journeys rather than competing with multinational airlines. The company's management has prioritised profit over market share (Bunz & Maes, 1998).
Cost-conscious
The organization provides high-quality services at competitive prices. The organisation also prioritises employee happiness. The organisation should reduce business expenses to deliver aviation services at the lowest cost. The company's management has established measures to boost efficiency and quality while reducing costs. The company's procedures and services have been updated throughout the years to increase cost savings. Southwest shareholders, suppliers, workers, and customers have observed the company's respect and trust. Employees are required to have ethical integrity, avoid personal concerns at work, and be anti-corruption. The company's suppliers must meet the same ethical requirements. Both workers and suppliers have diverse work cultures (Smith, 2004).
As noted previously in this Southwest airlines case study, decreasing expenditures through eliminating inefficient components has always been the management team's key goal. Business activities have been streamlined to cut costs. Southwest Airlines' management team suggested offline reservation systems, service without a meal, uniform aircraft, and tickets as cash register receipts to reduce production costs. Southwest employees know that planes only make income when used for flights. The company's point-to-point strategy follows this idea. Hub-and-spoke and greater average velocity theories minimise costs.
The airline ceased offering free meals and dishes on flights and instead offered drinks and small snacks, which let them provide cheap airfares. The corporation shortened workers' turnaround time to boost cost-saving efforts. Southwest pilots worked more hours than other carriers' pilots. Employees and management learned time management.
Internal Marketing
The employees' hearts are filled with Southwest spirit. The firm encourages treating every employee as a family member. The company's good culture assures that great communication and interpersonal skills won't deteriorate once Kelleher leaves. Even if he leaves southwest, his devotion and work ethic will remain (Czaplewski et al., 2001).
Southwest Airlines prioritises customer service and pleasure. Customers and workers are handled courteously to establish a high degree of satisfaction as part of corporate policy. Southwest Airlines is one of the friendliest and most exciting places to work because of this.
Southwest Airlines' work culture fosters inventive and enjoyable customer service. Profitability should not be ignored. Southwest Airlines' HR department, called The People Department, has its own set of beliefs and working culture. The company's HR department hires based on attitude and trains them to build abilities.
Southwest Airlines' practises put staff above consumers. The company's success is due to its strategy of not compromising employee pleasure. Southwest's organisational structure theoretically implies the Market-Focused Management Model. The company's culture requires that higher-ups trust subordinates' performance and choices as customers might be mistaken (Miles & Mangold, 2005).
Southwest Airlines' HR department accepts interns with no experience. The organisation gives extensive instruction and a good environment for learning different talents. New applicants would obtain exposure to experienced Southwest authorities, opening up prospects for them. The new method to educating new workers will enable them to assume responsibility and perform jobs when needed. Understanding the issues encountered by different departments in the company can help workers do their tasks effectively.
Southwest Airlines' policy is that the firm is a single-family. The company's profit-sharing plan exemplifies this principle. Management encourages employee celebrations. Authorities respect every corporate employee.
Southwest only hires creative applicants, therefore every employee is unique. Staff members' funny interactions, suitable attire, and interactive broadcasts create a comfortable environment for customers. The firm offers free entertainment to decrease traveller stress. Just focusing on passenger security may divide consumers and workers. When working professionally, displaying individuality might be tough (Ren, 2020).
When wearing their favourite outfit or uniform, people are more relaxed and efficient. The company's management has discovered various measures to make workers more comfortable. Southwest's competitors have imitated the business strategy to attract more customers. Most workers that are emotionally invested in the firm are more dedicated. These are the main reasons behind the company's success.
Analyse organisation
Southwest Airlines' business structure incorporates code of conduct and lean structure techniques. Lean structures enable cross-communication. Staff employees have great access to and flexibility to provide proposals to directors or presidents. Southwest's clear structure makes it easier for supervisors to supervise subordinates. The method helps managers communicate clearly and directly. The company's higher-ups are accessible to subordinates. Every employee can run for president. The company's leaders were connected with the baggage handling crew. The official atmosphere gives workers confidence and independence (Richards, 1996).
The organisation determined that the real factor of ownership is not the number of shares a business or individual owns. The amount of ownership is measured by the desire to improve the situation. Employees are encouraged to research solutions for growing issues rather than asking seniors for help. Whether a flight attendant or an engineer, the company's higher-ups will value their advice.
Southwest Airlines' management believes that the more an employee knows, the more they will care about and contribute to the organisation. Every employee would have access to important data. The company's earnings impact the employees' income stability and certainty. Every employee would contribute create money-saving techniques that would help the firm generate a high profit.
Marketing tactics externally
As part of making passengers comfortable and happy, firms tell those stories and jokes. The strategy would make passengers choose the company's airline service again. Thus, the entertainment gap might be eliminated. Long flights make it difficult to keep people' interest. Southwest should focus on entertainment for long-haul flights. Stewards in every aircraft would take up too much passenger room. The option isn't feasible for all flights. Southwest Airlines should deploy innovative entertainment systems so that customers have a pleasant journey. The same measure would raise prices for normal travellers.
The corporation should provide cheaper aeroplane entertainment to do the assignment effectively. Though installing cheaper items may come out malfunctioning in the long run, and the corporation may lose more than employing expensive products. Southwest Airlines has 300 planes. Even inexpensive newspapers in every plane would strain company reserves. Providing newspapers may appear cheaper to the company's management, but improved technological gadgets would be cheaper in the long term. Adding entertainment to the company's long-haul planes would be costly (Hallowell, 1996).
Southwest's exterior environment
Many external variables affect Southwest's business. Even during a major economic crisis, the corporation would maintain its market dominance. Southwest Airlines is the top domestic U.S. airline business. The firm is brilliant at recruiting a wide range of clients and responding to their demands. Other airline firms are struggling due to rising fuel prices. Increasing ticket prices have cost most firms market shares (Heskett & Sasser, 2010).
According to the Southwest Airlines case study, inexpensive airfares also affected the business. In 2008, as oil prices hit historic highs, the firm faced a tremendous hurdle. Due to the worldwide gas price spike, aviation firms struggled to survive. Increasing gas prices and a stagnating economy led to dismal ticket sales and the bankruptcies of several aviation enterprises. Low-fare enterprises faced a financial problem. Southwest's low-cost offerings fall into the same group. The firm avoided this destiny.
The weak economy worried most travellers about fare increases. Southwest airlines were voted the best by US residents. Apart from financial issues, the firm faced cultural challenges since terrorist organisations targeted aviation. Fear pushed the people to pick other transportation. The 1978 Deregulation Act permitted aircraft heavyweights to join the local market. In the first 10 years after the transfer, 150 aviation-related enterprises filed bankruptcy. Despite surviving these obstacles, federal taxes still pose certain hazards to Southwest's business (Raynor, 2011).
Southwest has suggested many ways and technologies to enhance turnover and save costs. The corporation relies on cost-cutting measures rather than flexible approaches. Southwest airlines have set a baseline for technology developments before other airlines. Southwest created their own website and portals first.
Conclusion
The Southwest Airlines case study reveals strong business strategies in the aviation sector. Southwest Airlines demonstrates the need of ethics in international commerce. The company's staff must maintain their integrity to maximise production. The article 'Southwest airlines case study' highlights the importance of effective leadership and corporate culture. The higher authority should constantly adapting to client needs and concentrating on staff problems to eliminate internal disputes. The study suggests that, in addition to time management, energy management is crucial to the aviation industry's performance. In addition to implementing new ideas quickly, leaders need adapt to the customary framework staff have followed for years. By evaluating the dynamics and business processes in this Southwest airlines case study, the Goolsby leadership style is the best fit for the corporation. This leadership style emphasises Integrity, Courage, and Impact, which boosts aviation productivity.
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