Southwest Airlines Case Study

Southwest Airlines

In 1971 a new airline company was born not knowing what the future had in store for them. Now 35 years later that same airline company is one of the most profitable in the business, 31 consecutive years of profitability at that. What started out as an airline that only flew to three different cities and everybody body thought wouldn’t last is now serving over 58 cities in 30 states.

Southwest Airlines places a big emphasis on customer satisfaction, which is what their mission statement is built around. They want to provide the highest level of customer service, pride, and company spirit. The company’s customer service is put into place the moment an employee is hired. There is a certain level of discipline employees must have and at the same are provided with the support that they need to succeed. The customer service that Southwest Airlines provides has been recognized by numerous departments and organizations in the past years and strives to keep this trend alive.

Among the different recognitions of customer service awards, Southwest Airlines has also received many awards from a variety of magazines. Some examples include: named Airline of the Year by Air Transport World magazine, one of the 100 Best Corporate Citizens in America by Business Ethics magazine, and the Best Low Cost Airline in the Official Airline Guide Airline of the Year awards. Not only are there many accomplishments that have been rendered by this airline company, but it also took a lot effort to get where they are now.

Whenever this company was born there was obviously a strategic plan in place. There was a need to know what they were going to offer, how they were going to offer it, and where they were going to offer it. What was their overall competitive strategy? Coming into this business was a big step as the investment is not cheap and once you’re in, it isn’t easy to exit. The public already had a negative opinion of the airline industry and it was up to the master minds of Southwest Airlines to overturn those opinions. They devised a simple plan of getting their passengers to their destinations on time, at the lowest possible fares, and ensure that the flight is enjoyable. As the company grew over the years they also had to keep up with the growing economy and the newly arising demand of transportation in the sky.

Since the wake of financial scandals companies are well aware of the new guidelines set forth by the Securities and Exchange Commission. Southwest Airlines has clearly stated their Corporate Governance guidelines which includes the qualifications of directors, board meeting, director responsibilities, size of board and selection process, and more importantly ethics just to name a few topics. As mentioned above, the director of Southwest Airlines have several responsibilities. The fundamentals are to promote the best interests of the company and its shareholders by overseeing the management of the company’s business. They also have two basis legal obligations which include the duty of care and the duty of loyalty.

Southwest Airlines has done a great job in keeping their competitive advantage for the past 30 plus years. In the Industrial Organization view they have had to position themselves in the industry in such a way to succeed. Some of the ideas that may have helped them would be the low-cost air fare or the possible the short flight times that are offered since they have positioned their locations in such a way. Since the company has displayed a strong position within the industry and characterized by significant opportunities they have been able to take advantage of above average profits.

Technology has always been a developing idea. Being in the airline business definitely has its times as well. Take for instance when Southwest Airlines introduced the ticketless travel in 1994. This was a definite change in technology that allowed to lower costs in processing as well as the use of paper. The ticketless travel allows customers to acquire boarding passes in numerous ways and not