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Financial Analysis - Southwest Airlines - Case Study Example

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This work called "Financial Analysis - Southwest Airlines Case" describes the examination of the firm’s financial performance. The author takes into account Southwest Airlines – corporate culture, characteristics, and role in the firm’s competitiveness – employee satisfaction, innovation, and risk, its financial performance. …
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Financial Analysis - Southwest Airlines Case
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Download file to see previous pages It seems that the firm’s strategic choices have to be reviewed – its culture and its leadership should be also examined – and appropriate changes need to be made. The examination of the firm’s financial performance – through the calculation of specific profitability ratios has led to contradictory assumptions; the firm has many prospects to recover soon but radical changes should be made on its culture and its governance.
Southwest Airlines was first established in 1966; its owner, Rollin King, had a specific vision: to create a low-fare airline that would serve people in three particular cities: Houston, Dallas, and San Antonio. The firm had a significant difference from other firms: in Southwest Airlines employees have been considered as the most important part of the organization – customers are at the second level of the hierarchy; in most firms internationally this is not the case: the service of customers is considered as a priority for firms in most industrial sectors. The specific characteristic of the firm’s culture has been proved to be one of its most important advantages – in fact, this policy has been considered by the firm’s managers to be a competitive advantage – it is for this reason that a rule implemented in the firm by Barrett – Southwest’s President for the years 2001 up to 2008 – the employee can use his/ her own judgment regarding the service provided to a customer; in the past though, i.e. in 1971 the dressing of the firm’s flight hostesses have been used by the firm’s managers to attract customers. Innovation in the firm’s advertising has been another characteristic of the firm’s culture; by using customers – and to increase the firm’s customer base. Innovation is also involved in other firm’s initiatives: the offer to the customers of free drinks – an offer not provided in all the firm’s flights – and the introduction of the 10-minute turn scheme – a really impressive project giving to the firm the chance to increase the number of its flights and keep the number of its planes stable. The 10-minute scheme has been one of the most important parts of the firm’s strategic planning – showing the ability of managers to develop effective HR plans – the success of this scheme requires that all tasks are appropriately distributed among the employees participating in the specific scheme. ...Download file to see next pagesRead More
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