Southwest Airlines Strategic Management - Essay Example

MGT599 - Strategic Management, Mod 5 Case Assignment Executive Summary This essay describes about the strategic management initiatives taken by Southwest Airlines. The discussion explains about the history of the company along with its organizational values in terms of its mission and vision. Moreover, a SWOT analysis of Southwest Airlines has been performed in the discussion to assess its competitive presence in the global market scenario. Furthermore, the discussion also tends to analyze the strategic fit of the organization representing the relationship between the organizational mission, its values and its strategies. Based on the key findings, the discussion also intends to recommend certain strategies for Southwest Airlines in order to capture the opportunities present in the market scenario. Introduction Southwest Airlines is an US based airline company, established in the year1971 by Rollin King and Herb Kelleher in Texas City. The primary vision of the business had been to serve people with travel assistance through airways in a cost-efficient way offering cheaper ticket fairs or other related services along with a higher degree of quality assurance. In the current day context, Southwest Airlines serves both national and international customers. (Southwest Airlines Co., 2012). Thesis Statement The purpose of this essay is to evaluate the performances of Southwest Airlines from a critical point of view, taking into concern its mission & vision statements. In the discussion henceforth, a SWOT analysis will be performed in order to analyze the appropriateness of the strategies implemented by the organization. Strategic Analysis of Southwest Airlines The mission statement of Southwest Airlines apparently affirms that the airline company is strategically concentrated to serve its international customer base with the highest degree of quality assurance with a sense of warmth, company spirit and friendliness along with individual pride. Moreover, the vision of Southwest Airlines indicates that the company desires to become a famous airline company by providing inexpensive, reliable and comfortable flight transportation facility, both in the national and international contexts (Southwest Airlines Co, 2012). Strengths The strengths of Southwest Airlines can be identified as its capability to serve its worldwide customers with low prices and higher quality services. Moreover, the organizational structure of Southwest Airlines is identified to be flexible which in turn rewards a competitive advantage for the company. Additionally, the airlines company helps its customers to book tickets mostly through online sources. Generally, the most apparent strength of Southwest Airlines is the working environment of the company which is built on an effective relationship among the staffs (Hawkins, Misra & Tang, 2012). Weaknesses Southwest Airlines does not pursue any partnership or membership with unions. Generally, the organizational operations are examined to indicate the nature of a follower rather than a leader in the global marketplace. Furthermore, it is also observed that Southwest Airlines lacks in terms of continuous innovation, which is often perceived as quite essential when aiming at the accomplishment of customer loyalty owing to the incessantly varying customer demand and technology (Hawkins, Misra & Tang, 2012). Opportunities The opportunities that shall facilitate the business growth of Southwest Airline in the international aviation industry can be identified in terms of its growing demand and continuously expanding market, where the company has certain chances to expand its business internationally along with other cities. Southwest Airline has the potential to serve its customer with live programs in the flight through WIFI. Furthermore, it is also observed that the company enjoyed a positive growth from AirTran (Hawkins, Misra & Tang, 2012). Threats The threats that Southwest Airlines is likely to face while operating and expanding its businesses can be identified in relation to the macro-economic factors such as the rising chances of recession in the national market along with frequent fluctuations of fuel prices. Contextually, the competitive requirement of offering high quality services with low cost advantages can also emerge as a crucial challenge for Southwest Airlines in profit maximization (Hawkins, Misra & Tang, 2012). Evaluating the Strategic Fit of Southwest Airlines The key strategies of Southwest Airlines can be identified as the low cost strategy through which it tends to serve its customers with discounted pricing services targeting a greater customer base. Furthermore, Southwest Airlines has also undertaken certain practices related to strengthening the relationship among managers and frontline employees implementing strategies which emphasizes especially on sharing goals and knowledge along with mutual respect within the workforce. Additionally, the strategies of Southwest Airlines focus on communication techniques which help in solving various operational problems greater efficiency (Gittell, 2003). With the help of this measure, Southwest Airlines has been able to emphasize more on strategic control systems, human resource competencies and its organizational culture. It is in this context that strategic control system states about the process of controlling the implemented strategies in a systematic way. It is also observed in this context that Southwest Airlines tends to focus on its human resource efficiency so as to ensure the proper functioning and implementation of the planned strategies into the business process. Additionally, the cultural factors of Southwest Airlines reveal that the company is highly concerned about the safety of the customers while serving them with quality along with innovative services (Griffin, 2008). With reference to the overview of mission statement, strategy and the operational process of Southwest Airlines, it can be affirmed that the factors have certain relations with each other. Taking the determined mission statement into account, the company intends to formulate its strategies, according to which the planning is processed systematically towards the ultimate accomplishment of the desired outcomes. Correspondingly, in accordance with its mission statement, Southwest Airlines attempted to consider certain strategies which include cost leadership. With the help of this strategy, the formulated mission can be achieved effectively as the strategy aims to facilitate cost-effectiveness and reliability of services, thereby yielding a greater degree of customer satisfaction along with competitive advantages. With its competitive virtues of serving the customer through quality assured cheaper services, the company has been able to acquire a larger market share in the international airlines industry. With reference to the context, it can be stated that the mission statement, its strategies and its operational components have a positive relationship which accumulatively contributes to the overall business success of Southwest Airlines (Garrow, & Hirsh, 2008). Hence, it can be stated that the company enjoys a substantial degree of strategic fit in the international aviation industry. Emphasizing on the strategies and business operations of Southwest Airlines, it can be stated that the company has ample scope to expand its business to overseas. In doing so, it shall be beneficial for Southwest Airlines to continue with its low cost strategy which can likely offer greater competitive advantages in the long run assisting it to attain a cost leadership position within the market structure. Furthermore, Southwest Airlines should be involved with unions in order to get better support from the community and also to ensure transparency as well as sustainability in its business procedures. This would in turn facilitate its brand image, thereby contributing to its overall profitability and competency. Additionally, the airline company should also attempt to introduce continuous innovations in its services to enhance customer loyalty. It is in this context that implementation of modern technology in Southwest Airlines’ operational process shall help it to provide faster and on time services in an environmental friendly and sustainable way (Pryor, Singleton, Taneja and Toombs, 2009). Conclusion Since its instigation in the year 1971 by Rollin King and Herb Kelleher, Southwest Airlines has been able to achieve most of its determined objectives which has further contributed to its international presence over a competitive edge. One of the fundamental reasons behind the company’s achievements can be identified by assessing its strategic fitness. It is in this context that the strategies implemented by the airlines company is learnt to be intensely related with its mission and vision. Moreover, the strategies are developed with due concern to the external environmental factors along with the various influencing elements present within the organizational environment including its culture and employee requirements which further enhances the strategic management efficiencies of the company. However, the strategic management initiatives implemented by Southwest Airlines have also been learnt to possess certain weaknesses such as complexities and time as well as cost consuming traits which should be taken into concern by the company in its future endeavors to augment its industrial position. References Garrow, V., & Hirsh, W. (2008). Talent management: Issues of focus and fit. Public Personnel Management, 37(4), pp. 389-402. Griffin, R. W. (2008). Management. US: Cengage Learning. Gittell, J. (2003). The Southwest Airlines way. Retrieved from http://www.theclci.com/resources/TheSouthwestAirlinesWay.PDF Hawkins, O., Misra, R., & Tang, H. (2012). Southwest Airlines Co. Panoma College. Pryor, M. G., Singleton, L. P., Taneja, S. and Toombs, L. A., (2009). Teaming as a Strategic and Tactical Tool: An Analysis with Recommendations. International Journal of Management, 26(2), pp. 320-333. Southwest Airlines Co. (2012). History. Retrieved from http://www.southwest.com/html/about-southwest/index.html?int=GFOOTER-ABOUT-ABOUT Southwest Airlines Co. (2012). The mission of Southwest Airlines. Retrieved from http://www.southwest.com/html/about-southwest/index.html?int=GFOOTER-ABOUT-ABOUT Bibliography Heneman, R. L., Fisher, M. M., and Dixon, K. E. (2001). Reward and organizational systems alignment: An expert system. Compensation and Benefits Review, 33(6), pp. 18-29. Read More