Southwest
Essay by 24 • January 13, 2011 • 516 Words (3 Pages) • 1,130 Views
- Southwest implemented unique approach: instead of “hub-and-spoke” used by other airlines, it applied short haul, medium haul, and point to point.
- It has the lowest operating cost structure in the domestic airline industry.
- In 2004, the company made $6.5 billion in operating revenue.
- 60% of passenger revenue comes from online booking.
- Southwest was able to hedge 85% of its needs of fuel and oil, which saves it about $455 million.
- It is known as the Nation’s low fare, and high customer satisfaction airline.
- In 2005, Fortune magazine named southwest the most admired airline in the world.
- It was the industry leader in customer satisfaction, customer service, and in the bounce promotions given to their employee.
- It employed more than 1000 married couples, and its employees are one of the highest paid in the industry.
- It implemented a hiring process that’s interviews the employee to find out top qualities and common strengths. Moreover, it is applied peers screen candidates and conduct interviews, where pilots hired a pilots, and gate agent hired gate agent…etc.
- It is consistently seeking ways to improve efficiencies and pass cost saving to passengers.
- In 1974, it implemented its first profit sharing plan, which was the first in the airline industry too. Now the employees own about 10% of the company’s stock.
QUESTIONS:
1-What is Southwest’s strategy? What is the basis on which Southwest builds its competitive advantage?
Southwest’s strategy is to improve efficiency and pass cost saving to its passengers by offering them low prices.
- The bases on which Southwest builds its competitive advantage is putting employees first, this will make them take real care of customers.
2- How does Southwest’s control system help execute the firm’s strategy?
Southwest’s control system help execute the firm’s strategy by:
- Implementing short haul and medium haul, on-line booking, less time at the gate, hedged fuel and oil, less people on the ground, the use of less congested airport, non-union pilots, and reducing
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