With the saturation of discount websites, however, Southwest Airlines is losing the grip it held advertising on the internet. The discussion of how these factors influence each force means that your answer will go beyond the description of each force. Terrorism is one of the greatest threats for people to lose faith on the airline industry. The company rightly believes that superior service is more likely to occur if the staff are happy, since their moods will often carry through to their work. Growth with consistency: When they enter a new city they want to make sure that they do the business which is consistent throughout the system. The Company amended its profit-sharing plan during second quarter 2011 to defer the profit-sharing impact of acquisition and integration costs incurred from April 1, 2011 through December 31, 2013.
In this case, they are more eager to suggest solutions for reducing cost and the front-line service providers can be in a better position to provide better services. These solid earnings were achieved despite significant efforts and costs related to critical strategic initiatives. The author of this theory suggests that firm must be valuable, rare, imperfectly imitable and perfectly non sustainable. Also, manipulating different data and combining with other information available will give a new insight. Is these conditions are not met, company may lead to competitive disadvantage.
This is evident by their no-frills, low-cost model: their goal is to provide the cheapest form of short air travel between two cities; providing the bare necessities. The policies she implements contribute to the airline's success because she looks beyond a particular functional area to see how each component of the organization can and should work together for the overall good of the company. Then, a very careful reading should be done at second time reading of the case. You are not required to go beyond the case end date since your analysis and judgement are being assessed at this point, not in the light of subsequent events. Southwest buys or leases gates at airports instead of renting the gates of different airlines, which empowers the airline to utilize it ground groups.
Firms earn only a normal profit and in the event firms started to earn more than that, other firms will enter the market and drive the price level down until only a normal profit could be made. Southwest Airlines has weathered through several crises and has proven itself to have potential for to be a leader of its industry. Answer 4: Southwest Airlines should acquire the gates and the available slots at the LaGuardia Airport because it would be a beneficial move in the long run. In picking the fuel effective 737, Southwest created a nearby association with Boeing that empowered it to create relatively good buy terms. While the company was able to enjoy their success in the earlier years, recent events and poor economic conditions have made competition fierce.
In addition, it also helps to avoid activities and actions that will be harmful for the company in future, including projects and strategies. The purpose of the Five Forces Model is to gain a deeper understanding of the intensity of competition in the industry and which forces are the key influencers. Even though Southwest offers no-frills, there is still a high degree of customer satisfaction that continuously builds customer loyalty for the company. Initially Southwest is operating service to Baltimore, Denver, Las Vegas, Orlando and Chicago Midway. They may now focus more on their current competitors for market share rather than worrying much about others entering the industry. As mentioned, Southwest offers low prices on their airplane tickets. Best alternative should be selected must be the best when evaluating it on the decision criteria.
As far as the employee training is concerned, the employees are extensively trained so as such…. Southwest acquired an additional airline allowing them to offer more departure times. A security code is added protection against credit card fraud. It is not necessary to include a history of Southwest Airlines. Once the alternatives have been generated, student should evaluate the options and select the appropriate and viable solution for the company. Employ for attitude — provide training for skills: Engage them quickly into the corporate culture. This value may create by increasing differentiation in existing product or decrease its price.
Southwest does not offer associations with different airlines, which streamlines its ground operations. This methodology to administration powers off Southwest's exceptional association with its employees. The organization just flies Boeing 737 planes and has resolved to fly the 737 only through 2004. The public lost faith in the airline industry immediately following September 11th, and for many airline companies this meant going into severe debt or even declaring bankruptcy. AirTran served 70 airports in the United States, Mexico, and the Caribbean; nineteen of these coincided with airports already served by Southwest.
Possible reasons for this move would be to eliminate the weakest competitor in the industry, which would free up the market held by that company. Due to rising oil costs, and other factors such as a weak economy leading to poor ticket sales , many different airlines went bankrupt and were subsequently absorbed by other airlines. Moreover, it is also called Internal-External Analysis. Publication Date: January 01, 1995 In 1994, both United Airlines and Continental Airlines launched low-cost airlines-within-an-airline to compete with Southwest Airlines. The medium of choice for customer referral is the internet.
AirTran had 8,033 employees, 138 aircraft, and 177 nonstop routes; in 2009 AirTran transported 24. The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit. It is typical for its crews to joke with the customers, and be friendly to make a cheap flight more palatable. The company should try to retain its staff and continue with its recruitment and should hire the right people. Since the success of Southwest Airlines is already well-known, this could entice competitors to emulate their strategies. Southwest Airlines is a rag to riches story that has had to fight for everything it has become. Management is very centralized through the board of directors elected by the shareholders and the officers elected by the directors.
Southwest Airlines, however, is not without weaknesses. For example, they use leather seats and in-flight entertainment system for almost the same fare. At the point when competitors and outside observers portray Southwest, they have a tendency to concentrate on its cultural attributes. Any direct quotations from the text should be used sparingly — these must be placed in quotation marks and referenced in the same way. And the buyer power is low if there are lesser options of alternatives and switching.