Wednesday, April 8, 2015

A New Strategy

The case of Southwest Airlines reminds me of the Coke and Pepsi article and how industries have to  change and adjust their procedures when an economic change happens. Southwest has done a great job at staying true to their mission.

Southwest has set itself apart from other airlines and found a unique niche. Southwest prides itself on being different from the other airlines and being able to offer lower fares and on time arrivals. The culture of Southwest is meant to give their customers a different, fun experience. I have personally flown with Southwest a few times and find the experience just that, fun, easy, and hassle free. They receive thousands of applications each year of people looking to join their exciting culture. Southwest pays their employee less and works more hours than other airlines, but people are still willing to join just to apart of their culture. During the hiring process you are expected to show that you can fit in with the less serious, "fun-living attitude".

After 9/11 Southwest and the other airlines faced many challenges. Southwest was not afraid to transform their core strategy. Rising fuel costs and increased security meant that they had to find a way to keep their low fares and to reduce overall costs. Southwest avoided the 7 ways they could fail. They were not stubborn about staying on course. Southwest knew that they needed to make changes after 2001. This meant they adding new cities, new markets, and new route scheduling and introducing a "bags fly free" policy. They also revisited their current boarding process. They did not attempt pseudo-adjencies or bet on the wrong technology. Southwest simply revamped their current products, services, and policies. Their financial department helped to relieve some of the risk that comes with rising fuel costs by fuel hedging.

This company continues to live by their mission. Southwest is team or "family" oriented, with a low turn-over rate. They know how to handle challenges and transform their strategy to keep up with customer needs. There is a lot to be learned from Southwest. They continue to make improvements and notice what they are doing right and what needs changed. This is a great example of how to avoid ways to fail big.

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