Southwest Airlines’ Competitive Strategy and Future Case Study
Southwest Airlines uses various approaches to achieve its competitive advantage. The airline’s current strategy focuses on reducing costs to attract and retain more passengers. This firm has gained a cost advantage by using its low-cost model. It has been charging reduced fares to become the leading player in the industry. The firm has also fitted its planes with comfortable seats. It has also acquired cost-efficient crafts to reduce costs.
These approaches have made it possible for Southwest Airlines to remain competitive. The firm has also gained a differentiation advantage by maintaining low costs for its passengers. The 15-minutes turnaround approach has been used to minimize costs. This strategy reduces operational costs because different individuals work as teams. The differentiation strategy has increased the company’s brand loyalty.
The company should identify new competitive strategies to gain a future cost advantage. For instance, the firm can offer reduced prices to its customers. This can be achieved by purchasing large aircraft. Discounts should also be offered on specific occasions to attract more clients. The firm can use alternatives to produce a new differentiation advantage. The airline company can have different aircraft especially after acquiring AirTran. The firm can offer free internet services and better loyalty programs for its customers. The targeted passengers should be equipped with new resources such as free internet (Wi-Fi), proper customer support, comfortable seats, and loyalty programs. Such strategies will eventually make the firm more profitable.
Several competitive strategies can be used to support Southwest’s future goals. The first strategy should focus on the weaknesses and opportunities identified in the SWOT analysis. To begin with, the firm can purchase large aircraft. Such aircraft should also be fuel-efficient. More people are willing to use air transport. The firm can target such individuals using quality services. Many students are getting new skills in business management. The company should hire such graduates to deliver quality services to targeted passengers. The company can also improve the level of security. The firm can also improve its services by offering free meals and by using Online Reservation Systems (ORS). Proper leadership practices will also be required to deliver the best services.
Hitt, M., Ireland, R., & Hoskisson, R. (2010). Strategic Management: Concepts and Cases. Boston, MA: Cengage Learning.