Trident University Scott L. Grigg Module 1 Case Assignment MGT 599: Strategic Management Dr.

Margaret Sabe 30 May 2011

the focus placed on this strategy is what helped Southwest weather the most recent economic recession that saw fuel prices soar and customer demand diminish. but rather the strategy that ties everything together. nd) A mission statement answers the question. (Ward. as well as the stated values and goals. serving as a moral and corporate compass. ³Why do we exist?´ and articulates the company¶s purpose for those within the organization and the public. and ensures that the focus remains on providing customers with a level of service that other airlines do not. individual pride. and Company Spirit. nd) ³The mission statement of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth. ³What makes Southwest Airlines so successful is not a bunch of separate things. such as United and American. Southwest maintained its focus and posted its 37th year of consecutive profitability in 2009. 2007) In fact.´ (Southwest Airlines. 2010) This statement does an outstanding job of summarizing Southwest¶s purpose.´ (Hammonds. While other airline giants.Introduction The overall business strategy of Southwest Airlines is clearly and definitively articulated through the mission and vision statements. 2010) Mission Statement Nearly all business planning and strategic experts agree that a mission statement is mandatory for the company¶s direction. It supports two of the primary stakeholders²customers and employees² 1 . (Southwest Airlines. were in financial disarray. friendliness. This strategy²to offer affordable airfare with top-notch customer service²is what distinguishes Southwest Airlines from its competitors. (Zahorsky. nearly crippling the airline industry.

To Our Planet We strive to be a good environmental steward across our system in all of our hometowns. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. (Ward. and caring attitude within the organization that they are expected to share externally with every Southwest Customer. nd) Southwest Airlines has chosen a collection of statements to provide a framework for its strategic planning: To Our Employees We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth. respect. To Our Communities Our goal is to be the hometown airline of every community we serve. it is vital that we. and one component of our stewardship is efficiency. Southwest is assured to always be working in the proper direction. Employees will be provided the same concern. and because those communities sustain and nurture us with their support and loyalty. a vision statement focuses on a company¶s future. which by its very 2 . By building the mission statement around these two groups. and caring to make those communities better places to live and work.that are critical to the survival of the company. Vision Statement No less important than a mission statement that focuses on a company¶s present state. Above all. as individuals and in groups. (Ward. nd) This statement may apply to the entire company or to a single division or part of the organization. embrace each community with the SOUTHWEST SPIRIT of involvement. service.

and Stakeholders. Using cost-effective and environmentally beneficial operating procedures (including facilities and equipment). the Environment. allows us to reduce the amount of materials we use and. while meeting our commitments to our Employees. translates to eliminating waste and conserving resources. Customer. (QuickMBA. and our Financial Viability. both internally and externally. These values are independent of the current industry environment and will not change²or be compromised² even if the industry in which the company operates changes. preserves these environmental resources. Values The core values a company chooses not only define the strategic direction that it will take. 2010) Southwest Airlines has committed itself to the following core values: Customer Service ± placing the customer¶s needs first and foremost separates Southwest from its competition 3 . when combined with our ability to reuse and recycle material. we will strive to lead our industry in innovative efficiency that conserves natural resources. To Our Stakeholders Southwest¶s vision for a sustainable future is one where there will be a balance in our business model between Employees and Community. and gives back to the Communities in which we live and work. but also convey its priorities to stakeholders. maintains a creative and innovative workforce. In order to protect our world for future generations.nature.

Responsible Growth ± avoiding rapid expansion of fleet or service will ensure that customer service is not compromised Environmentally Conscious Operations ± Southwest has a responsibility to the environment and will ensure its aircraft and operations avoid unnecessary waste or pollution These values do an excellent job of informing employees. (Southwest Airlines. and shareholders of the fundamental basis for Southwest Airline¶s business strategy. 2010) Unlike the mission.´ (Hammonds. They place an importance on the three things Southwest centers its operations on²People. According to experts. 2007) The goals a company establishes are an important part of the strategic plan because they motivate employees to work towards a common purpose. Planet. On the 2010 One Report. 2010) Goals ³Sound strategy starts with having the right goal. Performance. customers. vision. Southwest Airlines has done a poor job of publishing clear and focused goals for either the near or long term. (QuickMBA. the financial goal of a ³15% pretax return on invested 4 . and value statements.Low-priced Airfare ± reducing costs by eliminating unnecessary expenses and passing the savings onto the customer Employee Satisfaction ± keeping employees satisfied will create a more productive work environment and will result in better customer service Conservative. ³these goals should be challenging enough so that people nearly gasp when they learn of them and realize the effort that will be required to reach them.

Conclusion There is no question that a clearly defined and closely followed business strategy is crucial to the success and survivability of any company.´ Both of these goals are lofty. trade-offs. 2007) Right now. 2007) This strategy is supported by clearly articulated mission and vision statements. As part of the overall business strategy. ³Strategy is about making choices. However. frequently offered flights without much service. Some examples of possible goals for Southwest Airlines could be ³number one domestic air carrier in sales´ or ³reduce pollution emissions by 50%. While Southwest¶s management could do a better job establishing and publishing their visionary goals for the company¶s future. they have thoroughly demonstrated that they understand what strategy is truly about. Southwest¶s choices have resulted in them being one of the few profitable airlines coming out of the recession. however this is the only well-defined goal that was released for their stakeholders to understand. and require employees to work together to achieve. it's about deliberately choosing to be different. many managers fail to understand just how important it is to carefully select a strategy and build around´ is listed. in-line with the overall strategy.´ (Hammonds. giving them a bottom line that is ³deliberately different´ from their competition.´ (Hammonds. it is very important for Southwest¶s management to not only establish some visionary goals for the company to reach for. as well as values and goals that ensure all stakeholders are keenly aware of the direction the company is headed. but also to publish them so that they are well-known. 5 . ³Southwest Airlines has focused on a strategy of serving price-minded customers who want to go from place to place on relatively short. 6 . Retrieved May Guide. Vision..´ Strategic Management.about.about. 2007.´ Small Business Information About. 2011 from: http://www. (2007). D. Retrieved May (nd). S.´ Fast Company.htm Ward. (nd). ³Build a Strategic Framework: Mission Statement. S. Retrieved May 29. ³Mission (nd). 2011 from: http://humanresources. K. 2011 from: http://sbinformation. ³Writing a Meaningful Mission Guide. Retrieved May 29. Retrieved May 29. December 19.about. Retrieved May 29.about.References Hammonds.htm Ward. (2010) ³The Business Vision and Company Mission Statement. Retrieved May 29.´ Human Resources About.´ Small Business: Canada About. 2011 from: http://sbinformation. 2011 from: http://www. ³Michael Porter¶s Big Ideas. 2011 from: http://sbinformation.htm Zahorsky. Guide. (nd).com Southwest Airlines 2010 One Report.html Heathfield. 2011 from: ³Vision´ Small Business: Canada About.htm QuickMBA.

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