Southwest Initial Strategy
Southwest’s initial strategy was to avail low fares, especially low unrestricted fares, to business and leisure travels to allow them to fly between short-haul city pairs (departure and destination points) instead of having to drive the distance between the two cities as was previously the case.
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Southwest Unique Capabilities & the Resources Supporting these Capabilities
Southwest’s unique capabilities included: the capability to provide quality service (no delays); capability to provide extremely low fares while maintaining quality (prices were at least 60% below those offered by competitors and sometimes 75% or 80% below); frequent and on-time departures, and; capacity to maintain low operating costs. The resources that supported these capabilities included: unique members of staff – both frontline and managerial (airline had the expertise to hire Southwest-type employees), and; an aggressive marketing strategy.
Southwest’s Competitive Advantage
Southwest has been able to derive its competitive advantage through comprehensively focusing on the provision of quality service, lean and efficient operations, effective cost control mechanisms, aggressive marketing strategies, its people (employees), and the corporate culture. For example, its service is distinguished as “family fun”, where passengers are not only allowed to play games onboard the aircraft, but employees are allowed to join in the fun to satisfy the customer and also for their satisfaction and motivation.
Improving Southwest’s Overall Strategy
Expansion into new cities and previously untapped areas seem the best way to go for Southwest Airlines. Consequently, the airline should assume an expansionist strategy, but make sure it undertakes comprehensive market research, continue improvements on service quality, ensure the continuation of vibrant corporate culture, and also ensure the continuation of its human capital development.