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Diversification Strategies Southwest Airlines - Assignment Example

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Diversification Strategies: Southwest Airlines (Add (Add (Add Date) Diversification Strategies: Southwest Airlines Introduction Southwest Airlines is a US based low cost carrier headquartered in Dallas, Texas. The company was co-founded by Rollin King and Herb Kelleher…
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Diversification Strategies Southwest Airlines
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Download file to see previous pages Corporate Culture The case study clearly indicates that Southwest Airlines’ corporate culture greatly differs from that of other airlines. As Bermont (2004, p. 101) points out, when other airlines focus on profit maximization, the Southwest Airlines specifically tries to provide its customers with funny flight experiences at affordable rates. Since the company prioritizes customer satisfaction, it provides passengers with several financial benefits that other competing airlines hesitate to offer. To illustrate, when other airlines began to charge for customers’ checked baggage, Southwest Airlines stood firmly against those kinds of additional charges. Instead of charging customers’ baggage, the firm integrated taglines saying ‘We Love Your Bags’ into its advertising campaigns (Boone & Kurtz, 2011, p. 237). These operational policies of the organization greatly impressed customers and, therefore, contributed to customer loyalty. The most distinguishing feature of Southwest Airlines’ corporate culture is that it attaches specific importance to humor and energy from the time of its founder Herb Kelleher. The company management holds the view that if it can keep its employees happy, they, in turn, will ensure high quality services to their customers. According to the president Colleen Barrett, “Southwest likes to think of itself as a customer service organization that happens to fly airplanes”; and as per the company’s corporate culture, “servant’s heart” must be a necessary characteristic that every employee must possess (as cited in Boone & Kurtz, 2011, p. 237). The company management conducts group interviews to evaluate how their employees would interact with a customer. In contrast to other airlines, Southwest Airlines provides its employees with a common platform so as to express their opinions, attain education and training, and ultimately improve their performance. Thus the organization greatly fosters employee creativity. The Southwest management encourages its employees to be proactive and take decisions from the heart. As Southwest’s middle level managers, supervisors, and frontline employees are allowed to take decisions, passengers would not face any difficulty in obtaining timely and quality services. According to employees and passengers, a key factor that distinguishes Southwest’s corporate culture from others is that the organization holds a ‘heart’ (Boone & Kurtz, 2011, p. 238). How the Southwest’s Culture has benefited its Growth? While analyzing the company’s extensive corporate history, it is clear that the firm’s unique culture has benefited the airlines and its employees. High level customer loyalty, low cost, and employee empowerment are the major three ways that aided the organization and its employees. Firstly, strong customer loyalty helped the company to survive market difficulties including global financial recession of 2008. The case study clearly reflects that the company offers only reasonable fares to its customers and refuses to charge for additional services such as baggage. As Lovelock, Wirtz, and Chatterjee (2004) point out, Southwest’s convenient flight schedules are really helpful for passengers, because most of other airlines do not provide such flexible time schedules. Furthermore, the organization always strives to maintain cheerful services and a genuine interest in its passengers. Such positive ...Download file to see next pagesRead More
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