1.

Southwest’s Generic Competitive Strategy

Southwest Airlines applies the cost leadership generic strategy for competitive advantage, along with
intensive growth strategies to maximize market share and move toward its long-term goal and strategic
plan of becoming a global industry leader.

Cost management involves a diverse set of interrelated techniques including rapid development of
competitive facilities; successful pursuit of cost reductions based on experience; tight cost and overhead
control; avoidance of marginal customs. The intense strategy of market penetration provides support
for the standard cost leadership strategy of the airline company, and vice versa. The reason such low
costs and fares can be offered by the southwest is due to their operating costs. "Southwest pays its
pilots 20-40% more than the average salary of pilots flying larger aircraft on those other airlines."
Southwest wants its pilots to be more efficient than the average pilot with this pay increase. The pilots
fly shorter routes so that the pilots have an extra hour of flying each day compared to other
airlines.Such low operating costs reflect a competitive advantage that keeps the success of Southwest g
oing. Southwest has established a "cookie cutter approach to push into a new city, slash fares sharply an
d drive up traffic." Southwest is trying to stick with their low-cost plan and feel they can do so.
(Thompson Jr, Strickland III, Gamble, & Jain)

2. Southwest Airlines Company Strategy

Compared to its competitors, Southwest Airlines has a smaller regional business area. The company focu
ses primarily on the United States

It is also clear that the rivals will imitate the low-cost tactics Southwest Company uses to conduct their
business in the future. This can pose a significant threat to the company as it will be possible for the
rivals to offer the same lower prices as the southwest. In addition, the southwest airline is considered to
be the best customer service agency. It helps it to become more successful.

For example, with social media's ever-increasing position in advertising and customer relationship
growth, the business could tap into this tool to promote further interaction between the company and
customers. The business can get instant feedback and comments on its service delivery via social media
and can therefore get new strategies. (Thompson Jr, Strickland III, Gamble, & Jain)

Last but not least, the company relies primarily on Boeing as the sole supplier of aircraft and spare parts.
Therefore, this complete reliance on Boeing means that Boeing's lack of willingness to provide the
supplies needed could adversely affect the business.

They have wisely made each and every worker their own quality assessor with the creative profit-
sharing program, ensuring that no e
With the innovative profit-sharing plan, they have wittily made each and every employee his/her
own performance appraiser, ensuring that no employee falters behind the line. (Thompson Jr, Strickland
III, Gamble, & Jain)

Applying its Point-to-Point transit system, its admirable how SouthwestAirlines has avoided the
congested airports, thus not needing the dozens ofgates or thousands of employees to handle the banks
of the flights thatcome in and then disperse, leading to reducing a major fraction of theoperational
costs.

3. Key Elements of Southwest Airlines Culture

The organizational culture of Southwest Airlines Co. supports the well-being of workers, leading to the
underlying principle that employees who are properly cared for are those who provide the highest
production value. To maintain long-term sustainability, the corporate culture encourages the
achievement of high quality and success. The organizational culture of the enterprise encourages the
participation of workers. The organizational culture of the business encourages employee engagement,
satisfaction, productivity, and encouragement to strive for task and vision-related high performance.
The business thus demonstrates the importance of its corporate culture in making the airline industry
competitive. The commercial aviation industry includes aggressive rivals who strengthen their
competitive advantages by using various factors, such as price and pricing. In competing against other
airlines, such as United Airlines, Delta Air Lines, and American Airlines, Southwest Airlines Co. considers
its organizational culture as a strategic management tool for enhancing the business in terms of quality
of multinational operations and organizational efficiency. (Thompson Jr, Strickland III, Gamble, & Jain)

The organization approaches the competitive environment through this corporate culture by
concentrating on its human resource management and growth activities, such as the handling of
learning and motivational initiatives for flight operations employees. Southwest Airlines has a reputation
for the well-being of its workers. The leadership of the company in developing and maintaining its
corporate culture.
This cultural organizational dimension leads to a good performance of the worker, resulting in high busin
ess performance in the market for air travel. The following are the main features of the corporate cultur
e of Southwest Airlines Co.

 Employee-centered appreciation, recognition, celebration

 For employees: Living the Southwest Way
 For customers and other business stakeholders: Working the Southwest Way

As a result, Southwest Airlines culture address employees’ morale, motivation, and job satisfaction.

4. Southwest strategy execution approaches and operating practices

  One Plane Fits Everything Like network carriers and their commuter surrogates operating
everything manner of regional jets, turboprops, and narrow-body and wide-body aircraft,
Southwest is flying only one type of aircraft, the Boeing 737 series. That saves millions in
maintenance costs for Southwest — inventories of spare parts, technical practice, and other
airline issues related to nuts and bolts. It is also special for the airline.
 Point-to-point travel Some traveling schedules in the Southwest are among two points nonstop.
It minimizes the time that aircraft sit in busy, delay-prone hubs on the ground and helps the
average Southwest plane to be in the air for more than an hour longer each day than a similarly
sized jet flew by a network carrier. (Thompson Jr, Strickland III, Gamble, & Jain)

 Easy in-flight service Business travelers haven't always appreciated the over-simple service from
Southwest, but as rivals cut back, it looks better and better. There's only one service class, a
good coach cabin that's slightly larger than the competitors of Southwest. No seats are reserved.
There was never any food, just drinks and snacks.
 No Frills, No Fees Southwest has kept its consumer plan streamlined and straightforward as
other carriers have scrambled to strip benefits and heap on fees and limitations. The airline
offers only one-way tickets and only a few "buckets" prices. That not only keeps costs down—
complex travel systems are difficult to manage — it convinces fliers that they get value for
money.
 Good management Southwest Airlines' public face for a generation, hard-drinking, chain-
smoking, eventually stepped back earlier this year from the carrier. The bonhomie of Kelleher
obscured Southwest's isolation throughout its history. The airline has always avoided fads and
avoided anything that increased costs or made the simple journey more difficult.
 A Relatively Happy Workforce (Gittell)
 Aggressive Fuel Hedging Southwest Airlines has a tested and easily adaptable service model
sitting on a pile of cash and fuel hedges. Yet history shows that Southwest survived any
recession in the airline industry comfortably, then expanded rapidly yet earned enormous
profits when the business cycle turned.

5. Weaknesses, Problems or Strategic Issues of Southwest Airlines

To maximize the benefits of its company assets, Southwest Airlines needs to address its limitations. One
of the most noticeable shortcomings in the commercial aviation business is the following:

• Poor presence on the global commercial aviation market

• Small profit margins due to price competitiveness
• No flights to international destinations
• Single seating class (not first-class)
• American market dependency.

Most of Southwest Airlines operates in the U.S. Such a situation is a weakness in this SWOT analysis,
which correlates to restricting the revenue sources of the organization to its current air travel markets,
especially the United States. In addition, Southwest's thin profit margins are a weakness based on its use
of the cost leadership generic strategy for competitive advantage. (Thompson Jr, Strickland III, Gamble,
& Jain)
 6. Recommendations to Gary Kelly
Kelly and Southwest executives need some aggressive activities to successfully integrate the new
company into Southwest service for the acquisition of AirTran. First of all, by purchasing AirTran, it also
means that more than eight thousand staff must be taken over by Southwest. For a while, these workers
had worked for AirTran.

As a result, Kelly has to provide lessons on Southwest culture to all AirTran’s staff, from pilot and
attendants to mechanics and luggage transporters. For example, the airline does not have fancy
frequent flyer clubs or baggage transfer services to other airlines, but the number of passengers jumped
by 50 percent when it introduced a $17 fare from Tampa to Fort Lauderdale.

This airline can conduct operating activities more effectively than such a high-cost, high-quality
approach of rivals, according to the indication of experience and learning curve.

Airline has succeeded in reinvesting in the company thus returning to investors most of its free cash flow
in the form of share repurchases and dividends. The corporation has just raised the quarterly dividend
by 12.5%, taking forward dividend yield to 1.43%. The combination of international expansion and
inexpensive price makes Southwest Airlines a compelling stock to buy and hold. (Gittell)

Bibliography
Flouris, T. G., & Oswald, S. L. (n.d.). Designing and Executing Strategy In Aviation Management.

Gittell, J. H. (n.d.). The Southwest Airline Ways.

Thompson Jr, A. A., Strickland III, A. J., Gamble, J. E., & Jain, A. K. (n.d.). Crafting And Executing Strategy.

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