MGMT 3110 Case – Southwest Airlines FUNG Ngan Ling 2010 0064
What is SWA’s competitive strategy? What does it take to execute the competitive strategy? From the case, we can notify that Southwest Airlines is generally using two competitive strategies. They apply not only the strategy of low costs, low fares and frequent flights to form their cost structure, but also the “People” strategy, Southwest Airlines differentiate themselves by offering affordable journey with the valuable customer services. Southwest services involves frequent on time departures as well as low cost fares. SWA execute this strategy by flying the fuel efficient 737s. They also emphasize point-to-point routes, with no central hub and an average flight time of 65 minutes. By avoiding the hub and spoke system, Southwest is able to avoid the delays often associated with connecting flights. It pays off in shorter turnaround times and higher equipment use too. By executing these low fares and frequent flights scheme, Southwest successfully increases passenger volume two to three times. Consistent with the cost strategy, Southwest keep simplifying it operation in order to lower the cost. It typically offers only two fares on a route, a regular coach fare and an off-peak fare. It also tries to prices all fare the same within state. It has been never sold interline connections to other carriers and has been unwilling to pay to be part of other airlines’ reservations system. It has never offered meal service on its flights; meals are served when paying extra cost. There is no assigned seating too. Another competitive strategy is the qualitative customers services, it is not just a low cost or low fare carrier. It emphasizes customer services by having selective staff recruitment scheme and effective training course provided by the human resource management system. The result is undeniable, as it has the on-time performance, the fewest lost bags, the...
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