Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. As part of their aggressive customer service strategy, employees attend training classes to learn about the company and its record of customer service. Southwest airline ensures that the increasing oil prices do not affect the cost for running the airline as 40% of the costs of an airline are brought about increasing oil prices. This was Southwest Airlines most profitable route. Southwest's unique and relaxed corporate culture has created a highly successful airline business that has shown a profit for 30 consecutive years. In the most generic sense, Southwest strategy is to provide the lowest fares with the most flights to any city that Southwest flies. These include improving its cost efficient structure and maintaining its existing customer base as well as begin providing healthy meals on an economical basis without increasing the flight fares too much.
That gives the employees empowerment and the courage to keep looking for new ideas to improve the service and the company. Above all, Employees will be provided the same concern, respect,. For instance, the Jet Blue poses a challenge to the success of the Southwest Company. Southwest Airlines is the largest low cost airline in the country which provides all kinds of passenger, logistics, and mail services. It is considered the leading low-fare carrier in America.
Financial Strategy for the Southwest Airlines Essay Sample Southwest Airlines was instituted in 1967, initially as Air Southwest by Rollin King and Herb Kelleher and assumed the present name in 1971. S legacy carriers in reducing fuel cost. At Southwest Airlines, a less top-down method is used called a flexible budget. Southwest airlines is an very successful airline company serving around 100 million customers annually Southwest Corporate Fact Sheet. This makes it easier for Southwest to charge low flight fares for its passengers.
Similarly, the company has adopted a recommendable customer service strategy which has been its drive in all its operations. This worked well for the southwest in that those who visited the site were turned to be buyers. Moreover, they can focus on acquisitions and mergers which will not only help them expand but it will also reduce their competitors. However some frequent passengers have raised some questions about the policy of avoiding preferential treatment for its loyal customers. Such distinct achievement can only be achieved by keenly evaluating the threats, and weakness the company faces and act on them. In 1972 all Houston service is transferred to Houston's Hobby Airport form Houston Intercontinental, that is make more convenient for people to fly. How has the culture contributed to their success? In the most recent decade revenue has doubled.
Compared to its competitors, Southwest Airlines' rates are consistently lower. Southwest can be unable to pass on the costs to customers since it embarks on low-fares and have to cater for the security costs and purchase anti-weapon structures Gittell, 2003. Many changes have occurred and are occurring in the airline industry, which pose a potential threat to Southwest Airlines. Also evaluated are the potential improvements in financial performance along with long-term and short-term strategies. This would ultimately require the competing carriers to drop their prices to match those of Southwest in order to be competitive.
And the idea came from one of the employees. When it comes to creativity and discipline we think about Intel. However, when it fails another company will take over. Sure, Southwest owes much of its success to the pursuit of this strategy. However, they are still less and the routes and areas served need to be expanded. Diagnostics and repair procedures have been used to ensure a higher level of equipment availability at reduced cost. Southwest airlines appear to know something that its competitors do not.
Mergers When the company bought Air Tran Airways, it faced a problem in integration of the operations and culture. The operational expenses became higher because of the rise in the number of the flights involved. The two minute conversation transpired on March 25, 2011 and was inadvertently broadcast over a Federal Aviation Administration air traffic control frequency in the Houston, Texas area during a flight from Austin, Texas to San Diego, California. Successful differentiation from other airlines is their employees culture, which is transmitted to the customers, employees give a warmth customer service, normally calling the passengers by their first name, singing and hugging and kissing. The business plan developed by Herb Kelleher seemed to fly in the face of every aspect of airline convention. After the tragic September 11th incident, Southwest airlines remains as one of the only major airlines that are still profitable. Along with this added benefit come the added pressures to perform.
The airline started off by offering six daily roundtrip flights between Dallas and San Antonio, and 12 daily roundtrip flights between Dallas and Houston. The biggest threat would be the well-established international competitors which are also the low cost carriers and can easily snatch its customers. It is typical for its crews to joke with the customers, and be friendly to make a cheap flight more palatable. It has a more than of 46,000 employees. Other airlines like United trained the flight attendants for First Class and Business class, besides economy, their training takes longer and their uniforms are more expensive.
Even the technology used is the same throughout all the companies. If this essay isn't quite what you're looking for, why not order your own custom Marketing essay, dissertation or piece of coursework that answers your exact question? What are some of the key elements of their strategy as seen in these developments? Southwest had an edge over its competitors because of its people and their people management. However, the company was shutdown due to the irregularity. Consumers have high standards for all companies that offer a vast variety of services and goods. The revenues of the company have always been showing an increasing trend which enables it to adopt a continuous growth strategy and strengthen its position in the industry. The hiring of ground personnel at the airport of the new destinations, have to be done locally, and the operation manager can be an American.