¶ … viable alternatives to strategic decision making and discuss their consequences, defend one of them as the most appropriate for the company at the time of the case scenario.
Cost containment: Southwest has always marketed itself as a low-cost airline. By limiting its destinations, amenities and the types of planes it flies, has been able to keep operating costs low and pass on these savings to the customer. Customers are often very price-sensitive regarding airfares.
Employee commitment: Southwest hires for personality, above all, and strives to create a fun workplace environment for its employees. Through silly contests, socializing and wacky promotional initiatives that involve the employees, Southwest has created a company that is fun to work for, fosters employee loyalty, and thus reduces turnover. It has also branded the company as attractive to fly, because of its low-cost approach.
Conservative growth: A critical component of Southwest has been its willingness to 'stay small.' This strategy is partially necessitated by its commitment to cost containment. Southwest does not fly to a wide range of destinations and has limited its expansion to cities where it can fly more than 10-12 flights a day, not 4.
While continuing with all of these strategies is important for Southwest to some degree, employee commitment is by far the most important of the three. Other airlines offer low-cost fares and may even be able to offer lower fares; while conservative growth is wise, Southwest is still expanding, and may need to do so more aggressively in the future, depending upon the offerings of its competitors. What is unique about Southwest and cannot be duplicated is its attitude. While other airlines may be just as cheap to fly as Southwest, none are as fun. Southwest also offers a genuine commitment to being friendly and helpful to passengers, even though it does not offer amenities like meals.
Q5. Discuss implementation, evaluation, and control issues
The most serious issue facing Southwest at present is the revelations about the compromised safety of its aircrafts. Southwest branded itself as a low-cost airline with impeccable safety credentials and was proud of the fact that it had never had a fatality. In the future, Southwest may need to 'tweak' certain aspects of its offerings, such as allowing for some differentiation in terms of passengers and redefining its destination flights. But ultimately, its core brand image of customer service must remain unchanged, and safety is a critical component of that image.
Southwest must find a way to ensure that its aircrafts are safe, while still providing low-cost fares. Southwest's niche strategy is under attack, based upon a rise in low-cost competitors such as Jet Blue. But Southwest's branding was never merely about cost, it was also about its style and the quality of experience it was able to offer for its bargain-basement price. It may need to temporarily reign in its expansion and ensure that it can monitor the safety of its existing vehicles on current flights, without adding to the burden.
You’re 83% through this paper. Sign up to read the full paper.
Sign Up Now — Instant Access Already a member? Log inAlways verify citation format against your institution’s current style guide requirements.