Strategy Management Of Southwest Airline Management
From September 11 bombing, Southwest Airlines went through hard time. However, several strengths and advantages that Southwest had helped them to survive in facing the crisis. Through strengths from their strategies, Southwest Airlines can be represented as one of the most respected airlines in the world. The strategy management of the Southwest Airlines has the significant features that help to have proficient and effective application of strategic management. In their strategy management, they focus on some particular aspects such as leadership, allocation of resources, worker satisfaction, and customer value.
Southwest tries to keep differences with other competitive airlines. One of the strategies is "Bags Fly Free". Passengers do not need to charge for checked bags. As decreasing annoyance of paying additional fee, Southwest market itself as a unique airline among airlines in the United States. Some of management strategy from Southwest helps to make money and keep highly profitable business.
Unlike other airlines, Southwest airline tries to keep its service as simple. It removed the meal service that can disturb service in flight. Instead of it, flight attendants serve a simple drink and snack in flight. As providing "no frills" service, Southwest is able to keep cheaper cost. Therefore, it collects customer who desires to trip with cheaper tickets.
In addition, Southwest airline has its own special seating service which calls "fist come, first serve". It does not provide seat number and seating differences such as first, business, and economic class. This boarding procedure offered equal opportunities for passengers. Instead of having few people willing to pay for expensive ticks, Southwest airline focus on majority of passengers by providing more seats with cheaper tickets.SWOT Analysis of Southwest AirlineStrength
During past two decades, Southwest Airlines have worked on reducing no flights, laying off no employees in comparison with the other airlines' competitors. This management helped them both company and employees to prosper through bad times. Among the US Airlines, Southwest Airiness had the lowest operating costs, well-balanced financial statement and higher credit rating.
The former CEO of Southwest Airiness, Herb Kelleher, implemented the efficient and effective inter relationship within the airlines company. Instead staying in the office, he tried to visit maintenance employees to see the processes how airplanes were working, and talk with fight attendants. He preferred to become more involved in the operation of his employees. Therefore, it creates more communicating and more private relationships with them. From this strategy, the Southwest airline was able to overcome from suffering of bankruptcy during the September 11 crisis.
At the end of 2011, the company operated in 72 cities in 37 cities. Its service has been stretching out in the entire of United States. From Mexico and Caribbean islands, Southwest now extends into international areas. Therefore, this company has potential ability to expand their services more than now.
From continuous development of Southwest Airline, this company has been increasing in revenue and income. After more and more people start to use this airline, the reputation of southwest became a remarkable in airline industry. With its outstanding capability usage and extent of operations, Southwest airline are now famous as a lost cost airline.Weaknesses
Even if company has strong part of their management, it also has weaknesses part in it. Southwest Airlines does not provide a first class service on its airplanes and had no expensive class for its regular flying at terminals. This causes to have cheaper price for passenger by reducing advanced services. As a result, it can reduce the desires of using the Southwest Airlines for customers who already experienced several flights with competitor airlines.
In addition, Southwest Airlines has only one type of aircraft. Operating and Flying with only one type of aircraft can be easier for pilot and flight attendants to operate, but it can be boring for passengers. During long time flight, passenger may desire to have variety systems to spend their time in the airplane such as movies, music or games. Therefore, passengers can look for other aircraft types that can provide special feature and services to enjoy their flights.Opportunities
More and more people continue to look for convenience and time savings. As appearing these trends, a number of airlines focus on price and reliability. People's preferences are flying rather than drive. This will be able to meet the needs if the price is proper and the airlines are reliable. For example, the aging of the US populations cause increasing in leisure travel. Southwest can find better management strategy in accordance with their preferences.
As globalization, many airlines have been increasing international flight. In addition, government tends to decrease control in Europe and Asia by increasing the number of international travels. It causes expand the market area for airlines. Therefore, increasing international flight can be a growing opportunities to compete with other airlines.
Advanced computer technology can reduce time of ticketing transactions and reservations. As reducing time, and increasing convenience, Southwest Airline is able to collect more passengers. Some percent of investment on technology is needed to compete with other airlines. Southwest airline needs to improve their service by increasing effect of technology in response to new competitors.Threats
Such snow, rainy and hurricane, natural disaster can be an obstacle during aircraft operation. It can cause losses of aircraft, delay the flight time, and safety problem. Natural phenomenon is not easy to predict, and many airlines are having hard time to prevent dangers which can occur during irregular situations.
Fuel cost can occupy large percent of spending when the airline operates its company. Depends on economic or political event, fuel cost can be changed. When fuel prices rise, the airline possibly will increase their ticket price. As decreasing of customer, company will face to run out of its margins and lose its business.
In addition, during economic slump, the number of people, who desires to use airline, will decrease. They may select to use other alternative transportations which are cheaper than flying such as car, train, and ship. Apparently, Southwest airline mainly operate in the United State of America. Therefore, economic recession can hurt Southwest's business.Discussion
The leadership style of Kelleher involves his engagement with the airline procedures, as well as his effective interrelationship with his employees. As a result, this leads to build cooperation and inspiration of employees. This could easier to communicate and solve its issues and problems between employees and managers. From this management, Southwest airline creates active connection among employees. Their strategy management helps to carry on competition with other competitor airlines through its effective and low cost prices and services. Furthermore, with these strategies, the performance of airline will be able to be improved. Therefore, Southwest airline's strategy management will be helpful to achieve its goal.
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