Current State of Affairs inside the Firm Southwest Airlines - Essay Example

Current of Affairs inside the Firm Affiliation: Southwest Airlines is a Texas-based carrier, with its headquarters located in the city of Dallas. Dating its history to a humble beginning in the year 1967, the airline has experienced significant growth and development. In that pursuit, it has in the recent past become a low-cost carrier in the United States airline industry. The current name of the carrier was adopted in the year 1971, and since then, the airline has remained vibrant and outstanding in terms of operations and performance in domestic air travel services (Gittell, 2005). In fact, it is the largest domestic passenger carrier in the United States. This position in the airline’s context is determined by the number of domestic passengers served by the airline. The airline’s portfolio has been built by both strengths and weaknesses. While scenario is relatively a normal phenomenon to almost every business venture, the measures employed by Southwest Airlines in exploiting its strengths and addressing the underlying weaknesses are critical and unique its performance. The company primarily concentrates in domestic passenger travel services, giving it a local advantage. However, in international terms, its business performance is based on collaboration with international airlines. Prior to local, regional or international success, Southwest Airlines has outstanding strengths that maintain its top position in meeting air travel demands for the domestic market. Customer service is one of the critical areas that the airline roots its strengths in. The airline has in the past undertaken and continues to undertake service evaluation with regard to customer expectations. In this customer service practice, Southwest Airlines seeks to identify loopholes in its line of service. Customers are the primary determining factors of the success of a business venture. The management and the employees of the Southwest Airlines critically accounts for this fact by striving to meet customer satisfaction in air travel services. Customer feedbacks are presently used as a tool for designing, formulating and implementing customer service policies in the company. Employee base and the number of flights offered per day is an essential current strength. By close of business year 2011, Southwest Airlines had an employee base of 37,000, and offered up to 3,300 flights a day (Hill & Gareth, 2012). This has been realized to due to the ever rising customer volume especially in the last two years. The effectiveness, efficiency and commitment to duty by its workforce, Southwest Airlines has emerged as one of the most efficient domestic airlines in the United States and beyond (Lauer, 2010). The growth in its customer base has been pursued to match up the high demands for air travel services by the company’s clientele. The airline’s workforce and ability to handle that magnitude of flights in a single day is a critical strength, especially in comparison to rival firms. Market and industry advantage is another significant strength in the operations of Southwest Airlines. The airline dominates the United States market, meaning that it handles majority of domestic air travellers in the United States. In this regard, Southwest Airlines enjoys customer loyalty. Therefore, the company stands both market and industry advantage, thereby outperforming many other rivals in the same market and industry. Breaking the customer-company ties in this case is substantially difficult especially for competing firms. This allows the airline to enjoy an operational strength against rival airlines. This strength is complemented by low service pricing, making the airline one of the most affordable airlines in the United States airline industry. Amid the aforementioned strengths, weaknesses have also encompassed the company’s operations and performance. The airline’s pursuit to diversify its operations to the international market has relatively diverted the attention of top management to external and global issues. While the global pursuit is positively tailored to benefit Southwest Airlines in the long run, current domestic operations are negatively affected. Key personnel is in most cases out of office to oversee expansion pursuits, leaving emerging critical internal issues unattended to. Limited or no international presence is a major drawback to the operations and performance of Southwest Airlines. As earlier mentioned, Southwest Airlines primarily undertakes domestic air travels. The airline serves up to 42 states of the total states in the United States. There are at least 97 destinations that constitute the locales served by Southwest Airlines. In international operations, however, Southwest Airlines depends on collaborative practices with international airlines. Its limited or no international presence is a relatively critical drawback in terms of its international clientele. In most cases, the airline has link this international clientele with international airlines, a scenario that depicts an international-based weakness. Changes in the leadership and management of Southwest Airlines have been undertaken several times in a span of just a few years, especially between the years 2004 and 2008. While the influence of this action is relatively low, its impact on overall airline operations and performance cannot be ignored. Rapid changes in management and leadership interferes with long term planning, especially the time lag of actualizing the planned business pursuits and prospects. Basically, coherence of planned activities keep on being revisited every time the management and/or the leadership changes, so as to update everyone on board on the current state of affairs in short term and long term planning as well the desired courses of actions. The operations and performance of Southwest Airlines are informed by the underlying financial condition. In pursuit of expansion and portfolio diversity, Southwest Airlines acquired Air-Tran Holdings on May 2, 2011 (Kelly, 2012). The year 2014 is expected to be the time that full integration of the acquired firm into Southwest Airlines will be realized. Just like any other business venture, the airline is undertaking intensive expansion strategies, characterized by Air-Tran Holdings acquisition and quest for international presence. This process is being undertaken in a bid to better its current financial condition. Amid this pursuit, the financial condition of the company remains vibrant, allowing it to offer low-cost carrier services in the most diverse way in the United States. The airlines quest for international presence depicts an urge to improve its current financial position, which already outperforms that of rival firms. Southwest Airlines has already begun operations in Mexico City and Jose Cabo, Mexico as part of its go-international strategy (Southwest Airlines, 2012). This international business urge is backed up by improved financial performance in the last two years. Total revenue earnings by Southwest Airlines in the last two years have gone up. This is an indication that its customer base and total clientele continued to grow over the last one year. On the same note, high total earnings imply improved company stock performance, a scenario that consequently leads to improved stockholders’ wealth and welfare. References Gittell, J. (2005). The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance. New York: McGraw-Hill Professional. Hill, C. & Gareth, J. (2012). Strategic Management Theory: An Integrated Approach. New York: Cengage Learning. Kelly, G. Southwest one report. N.p., 2010. Web. 16 June 2012. Lauer, C. (2010). Southwest Airlines. Dallas: ABC-CLIO. Southwest Airlines. "Ten-Year Summary." Southwest. N.p., 2010. Web. 16 June 2012. Read More