Wednesday, April 6, 2016

What Southwest did not do to fail.

Evaluating the Southwest Airline in the light the coherence article. Consistently, Southwest Airlines stick to the strategy and their core competence whenever they faced a challenge. Generally, companies fall prey easily to the changing market conditions trying to cope with the situation i.e. a reactionary response. 

The strategy is not created to be kept in shelf and never to be used. Rather daily company activities must align with its strategy that allows companies to integrate their business functions, operate on a goal based approach and grow the business on opportunities that arise along the way. Southwest Airline used coherence strategy to its advantage by understanding market dynamics and Southwest’s capabilities to address those dynamics, also capabilities that Southwest should build on and who are their customers and what value Southwest is creating for them.

The coherence test is a good litmus test for a company to identify the gaps and opportunities. The ‘way to play’ strategy in case of Southwest Airline worked well when they tested the open seating versus reserve seating system. Going with their core value, the experiment proved that customers valued their open seating approach but with improvement in the system to reserve a place in the queue. Southwest Airline were able to maintain their competitive advantage but at the same time address the needs of their customers. This step ensures the capability enhancement used through the analytical approach. The customer experience as Southwest created is not achieved solely on stating the idea of conducting such behavior. By engaging employees and reinforcing the vision and strategy through their daily actions moves the company forward into their ultimate objective.

This begs to ask next questions, ‘how to build the capabilities system?’ The management of a company must outline the process that will enable the necessary changes through employees and eventually capabilities enhancement system. Southwest took the dream to become excellent in serving customers, a strategy to beat the legacy airline companies to enter into Southwest’s niche market. Southwest listed down six strategic steps that would transform their business design and harness the growth opportunities with existing capability system. Core focus on customer experience delivered initiatives that customers appreciated and acknowledged such as expanding routes and ‘bag fly free’ etc. The ‘Warior Spirit’ and ‘Fun LUVing’ culture of Southwest exceeded the expectations of customers as created by the company through strategic branding and employee commitment.

To combine these ideas generate the perfect product or service that a company desires to build in the minds of their customers. The businesses prove profitable with loyal customers developed through the interlocking of company’s capabilities and consistently delivering to the expectations of those capabilities with same rigor and passion. When Southwest Airline started the code sharing it aligned well with their new strategy that enabled them to deliver the service that they envisioned. To improve on their service and product delivery, Southwest improved the existing technology. Such an action proved successful in gaining customers in other markets and increasing the overall value and experience for their customers e.g. to enable code sharing with other airlines in the system and accommodating more customers in the system etc.

In conclusion, Southwest stayed on the path with coherence system as tested and proved time and again based on Southwest’s capabilities. Southwest consistently evaluated their value chain, customer interaction and improved accordingly to match their ability to deliver best by keeping the core values intact.

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