Southwest Airlines' strategies for competitive advantage and growth

Southwest Airlines Case Study

Companies often desire to overcome any industrial storm and become successful when carrying out their day-to-day operations. The following study shows how Southwest Airlines has tried and adopted various strategies that have made it successful just like other players. Factors like geographical expansion automation, streamlining are identified in this study as some of the factors that led to its favorable competitive advantage. Even with the possibility and the high prospects of success, the study appreciates the competitive nature of this market niche characterized by players like Continental and American West Airlines. The frequent re-evaluation of the adopted strategies is helpful in countering any unfavorable industry changes.

Question 1

In the airline industry, Southwest continued to be successful due to its low-cost position regarding flying and their brand association. The 9/11 terror attack in the U.S. affected the airline industry because the terrorist used an airplane to perform their attack. In essence, many consumers' feared air transportation and Southwest tried to gain their trust by lowering airfare. Moreover, the airline had frequent flights as they tried to maintain their full schedule to stimulate travel, demands, and looked at redistributing expenses through other areas in the airline.

Southwest also continued streamlining and automation. This helped in cost cutting and maintaining its competitive advantage based on the established brand. For Southwest, ticket counters and security checkpoints were expanded, and workforce at the airport was increased. At the boarding process, the airline used a traditional plastic board that they replaced and streamlined with an automated system. The previous card system at the boarding process was tedious for the workforce and entailed many processes for the consumer. The airline also intends to embrace the technology advancement fully by rolling out self-checks that will also affect the carrier section. Hence, boarding time reduced and the extensive queuing for carriers was managed (Hauck, 2004).

The geographical expansion also led to the success of the airlines especially after 9/11 where 55% of the core market is under Southwest's control. From the urbanization and networks linked to the Southwest, its target market diverted to large city markets. Its brand name also helped the airline industry cut on its PR costs and marketing. The timing of this geographical feature led Southwest airlines to capitalize on the pressure faced by its competitors.

Mergers and favorable acquisition also strengthen the airline's position. It is evident that many airline industries faced financial problems that forced them to reduce their share price. However, by using mergers and or acquisitions, Southwest Airlines gained access to major hubs by using the easier routes. Besides, the mergers removed associated challenges encountered when entering new markets.

Question 2

The expansion strategy employed by Southwest Airlines helped it not to strain the balance sheet. Additionally, its national presence saw it fly through 59 airports in 58 cities and hence, its strategic expansion has made it be a national airline. The strategic expansion of the airline faced less competition, for instance, by opening a major operation at Baltimore-Washington International; it avoided major airlines presence at Dulles and Reagan National. Southwest airline is known to be a leader in its line of business and leads to its curve due to its low costs and standardized traveling options. As such, it did not change its strategy, which saved on its costs of restructuring (Hauck, 2004).

Question 4

In the face of competition, Southwest Airlines must pursue Internet marketing aggressively as opportunities that will expand the market segment and persuade more customers to fly. More so, the Internet as a tool for communication is a method fully embraced by most businesses, and they are performing very well because it reaches a vast number of people in a short time. The costs associated with Internet marketing are minimal compared to other forms of promotions and advertising. The other promotional strategy that can work for the airline is using campaign strategies that advocate for "buy one, get one free" ticket that will offer the customers a one-way return ticket for flights operating during off-peak seasons. After the 9/11 attacks, the market decline and this was the best time for the industry to pursue its market growth by identifying those opportunities not present in competitor's environment.

Economically, the airline needs to ensure that it retains its current employees. Hence, the company should introduce structures that are continuous learning programs. Through these programs, employees are given up-to-date information about current information affecting the airline industry. Additionally, negotiations also affect the economic factor of business operations. As such, the company needs to improve the relations between employees and management to avoid the disruptive contracts that hamper the smooth running of business activities. The Company can also increase its market share by adapting services and specials that cater to the population basing on geographical demographics. Through this, the economic factor will be enhanced and both employee and company goals and objectives will be met (Hauck, 2004).

Conclusion

It is conclusive that Southwest Airlines can succeed in the industry despite the challenges it has faced previously like terror attacks or the growing strength of the competitors. The competitive nature of the American airline industry has been shown as a limiting factor to the possible strategic development of the company. Nonetheless, aggressive Internet marketing and employee retention are shown as the viable alternatives for Southwest presently.

Reference List:

Hauck, T. A. (2004). Southwest Case Study. Electronic Source