Soutwest Airlines in 2010: Culture, Values, and Operating Practices - Case Study Example

Southwest Airlines: Culture, Values, and Operating Practices al Affiliation) South West Airlines is a very successful airline that deals with domestic air travel in the United States. It has various Strengths, Weaknesses, Opportunities, and Threats. Various strengths have enabled the company to be successful and productive. They include its market share, the capable employees and good employee relations, a good brand name that promotes family values and good principles. Moreover, its ability to act quickly in securing more markets and its loyal customer base, its ability to accommodate all types of people due to the low prices of some its flights, and offering redeemable credits have encouraged people to travel using their flights (Smith, 2006). Southwest Airlines has various weaknesses that include its high cost trends, inability to offer segmented seating preferences, and limited space to carry freight and cargo. Furthermore, it does not offer international flights, uses old planes, which have some defects, and the use of a single plane producer. Moreover, the short trips they provide do not achieve economies of scale; they choose employees based on their personality first and not the skill, laxity in inspecting its planes frequently, mishandling baggage, and its failure to meet the demand of increasing customers. These weaknesses make it vulnerable and may lead to losses and close of business. South Western’s opportunities are expansion into other national and international markets, new technologies that can make travel experiences more attractive, and expanding its services to include business class services. Finally, some of its threats include its competitors, for instance, JetBlue Airways; who may take its customers as it also offers low prices to its customers at low expenses. Moreover, the state of the economy that reduces the number of travelers, government regulations that add to cost of operation because of oil and gas prices, and terrorist threats, which reduces number of people willing to fly. An organization has no control over the threats it faces from the environment. The only solution is to maximize on its strengths fully, take advantage of the opportunities it has and to minimize its weaknesses. 1. Yes. Southwest Airlines was able to start operating even after major opposition from other air travel providers and long court procedures. Its management team made this possible by their relentless efforts to make their dream a reality. That attitude for fighting and not giving up despite the challenges is inspiring through its ability to offer services at a lower cost and not compromise the value of their services to its customers. They meet the demand of their customers and treat them with care and respect despite the low prices that the customers have paid. South West airlines culture of treating its employees respectfully and like customers is rare in many organizations. The employees in other places are undermined and work in demotivating condition. South West however invests in its employees, involves them in decision-making, listens to them, and takes it upon themselves to celebrate them and be updated about their lives a good example is Kelleher and Barrett. Other organizations should learn and adopt this culture. The way that South West employees treat their customers is commendable. They not only provide the routine services but also engage with them, crack jokes and lighten their customers’ days. The customer service that is provided by this airline is not scripted but human and natural. It makes the customers feel wanted and appreciated which makes them use their services repeatedly. Not only do South West airline meet their customers travel needs but it also satisfies them, which obtains their loyalty and retention to using only their airline (West, 2005). Finally, their marketing and promotional methods are cheerful especially their advertisements which are not too serious and which make people want to use their products. A good example is calling their planes lovebirds, drinks love portions, and peanuts love bites. Southwest mixes work with fun and has reaped many rewards from that. 2. I would give it an A. First, its mission and vision statements cover the employees, community, and the planet. The airline wants to develop its employees individually and intellectually, it wants to give back to the community for the support and loyalty it has shown by providing them with good service, care, and involvement. To the planet, it aims at conserving it and reducing pollution by using environmental conscious resources and by recycling its products. Second, its low fare policy accommodates everyone in the society. People can now use the airline to travel to other places in the US. The policy encourages elasticity in the price of travelling (Meyer, 2001). The airline can lower or raise fare according to the economy, peak hours and type of people for instance it started a business select fare to encourage economy minded travelers. In addition, the policy does not limit the amount that people can pay. South West airline came up with a strategy that enabled the business people to travel during the day at high prices since they did not mind then those who wanted to travel for pleasure travelled at low prices during the weekends. Third, their customer service is impeccable because they make the customers feel welcomed, appreciated and thought of. As a result, they retain most if not all of their customers. Finally, their marketing is vigorous and entertaining, which captures the attention of many motivating them to use their airline. South West winning strategy is the low fare strategy. The strategy has been functional since the airline started its operations in 1971. It has encouraged most of its customers to use the airline as opposed to other airlines as it is affordable. 3. South west’s policies are to offer low prices to customers and to provide value for their money. As opposed to the common practice, which is serving customers according to the money, they have provided. It is able to implement the low fare strategy by using one provider to meet its aircraft needs, e-ticketing, avoiding high traffic cities thus saving time and fuel, using the point to point scheduling, reducing the time taken to check in passengers and using flight attendants to clean up trash instead of hiring cleaning crews. Southwest provides quality service to all its customers. Its airplanes are usually in good condition and the employees cheerful to the customers despite the amount of money they charge. Their planes are very safe and had a nearly perfect record before 2005s crush. 4. The key elements are a warrior spirit, servant heart and fun-Luving attitude. Yes, it is a strong-culture company. From the beginning, the pioneers fought to see the airline become a reality. They did not give up despite the opposition and challenges. The same happens today. The management and employees work hard and fast to obtain new markets and cover areas that other airlines have defected. They make strategies on the way forward in case the oil prices rise and they make contracts to protect the airline from huge losses that come from oil and gas inflation. They have also kept the culture of keeping the employee first by caring for them and developing them via various training programs (Gittell, 2003). One of the problems that Kelly faces in safeguarding the culture is protecting it from contamination and erosion once Southwest has fully acquired AirTran. It shall be really challenging to safeguard the culture of Southwest once they start operating two airlines as one. 5. Southwest has an ‘A’ grade for executing their strategies. The operating practices that have led its success in executing its strategies include the ability to keep their employees first and fostering a family spirit motivates them to give their customers the best treatment. Moreover, the step the company has taken to lower operation costs has enabled it to provide low fare charges. Furthermore, acting fast in areas where other airlines have cut back service has expanded their market share, and signing contracts to hedge against the uncertainty in oil prices (Murakami, 2013). However, the lack of a first-class section in their airplanes discourages certain people from travelling with the airline. Some rich people prefer sitting with other rich people in the airplane. However, Southwest’s policy does not accommodate these people and do not have fancy flyers clubs at its terminal. As a result, these people prefer booking and boarding other major airlines that have first class sections and flyer clubs. Another operation is hiring people based on their personalities first as opposed to their skills. Many resources are spent teaching people who have not had prior experience in flight attending. Finally, although they host parties and events to garner the family spirit, the airline may be losing a lot of money preparing and holding these events. It should look for other cost-effective ways to foster the family spirit. 6. It shall be challenging to manage two airlines that have been ran very differently in the past. Southwest airline shall not be able to handle the customers for both Southwest and AirTran and this shall affect their sales. It shall be confusing for the employees since they will be confused as to which ideologies they should use. It shall also be hard to stay as a close-knit family due to the interruptions that shall result from assimilating AirTran to their ideologies and values. 7. Strategy wise the acquisition was a good strategy. Southwest shall increase their customer base and may learn some practices from AirTran that may be beneficial to them in the long term. It shall also reduce the number of competitors because AirTran was their competitor before they acquired it. 8. First, they should decide how AirTran should be managed during the two years that they should be teaching it the Southwest culture. Whether it shall stick with its culture and continue its operations before it is fully assimilated. Second, if it shall keep all of AirTran employees or if it shall lay off. Third, how the executive team shall manage to run both airlines yet they are both time consuming and require all the time and attention. Fourth, whether Southwest airline shall keep all the stations that AirTran was operating. Lastly, it should decide which ideologies it should adopt from AirTran. 9. It shall be a handful to manage two airlines that both had a large number of customers, employees, and fleets. Management should therefore ensure that they are not overwhelmed by the transition and should formulate strategies on how they shall operate before AirTran is assimilated to the Southwest culture. Kelly and his team should not forget the ideologies that have been in Southwest for years and should continue treating its employees with the same respect as it has in all the years. In addition, they should ensure that customers should obtain the same treatment that they have had or even better and that customer service shall not deteriorate (Wiersema, 2006). Lastly, it would be better to integrate some of AirTran ideologies with those of Southwest and come up with a new and better brand. As a result, Southwest shall become improved from the acquisition. References Gittell, J. (2003). The Southwest Airlines way: Using the power of relationships to achieve high performance. New York: McGraw-Hill. Meyer, B. (2001, May 11). Southwest Airlines Reputation, Low Fares Would Mean A Lot in Buffalo, N.Y.. Knight Ridder/Tribune Business News. Retrieved March 18, 2015 Murakami, H. (2013). Dynamic Effect of Low-Cost Entry on the Conduct Parameter: An Early-Stage Analysis of Southwest Airlines and America West Airlines. Modern Economy, 281-292. Smith, H. (2006, May 1). Southwest Airlines SWOT Analysis - Business Assessments. Retrieved March 18, 2015, from http://www.businesstune-ups.com/Southwest-Airlines-SWOT-Analysis.html West, L. (2005). Lessons in loyalty: How Southwest Airlines does it : An insiders view. Dallas: CornerStone Leadership Institute. Wiersema, F. (2008). Customer service: Extraordinary results at Southwest Airlines, Charles Schwab, Lands End, American Express, Staples, and USAA. New York, N.Y.: HarperBusiness. Read More