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fundamentals of strategic_management

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1.
It is clear that SWA has followed the low-cost provider strategy in the five generic competitive strategies
that discussed in Chapter 5 by providing lower overall costs including fares cost, customer pleasing
services cost and operating costs than other companies and then trying to find ways to make up the
costs. For example, SWA has only operated one kind of airplane. SWA is the first company to introduce
ticketless travel or point to point scheduling of flights. It shows that the company put their entire effort
on finding ways to reduce cost as well as make up the low-cost in every step of the services they offered.
The cost reduction carried out by the company confers a competitive advantage over competitors and
the financial performance is excellent.
2.
SWA’s strategy is its ability to help people to travel at an affordable and low cost. The fare structure is
simple and easily displayed and accessible on their website and advertisements. For example, the lowest
fares are normally not able to refund, however, it could be used in future travel with Southwest Airlines
by a change fee which many other competitors such as US Airlines charges customers between $100-
175 dollars for flight changes. One of the biggest advantages that Southwest offers is the “Bags Fly Free
which allowed for bags to fly free and no additional costs such as fuel surcharge, fees for travels awards,
or fees for buying a ticket in person like many of their other competitors implemented to make up for
the increasing costs of jet fuel. Southwest also initiated special fare promotions in some particular times
that advance reservations were low to fill up planes and avoid losing revenue and covering costs. This
strategy combined with the “Bags Fly Free” resulted in South west having record load factoring of filling
up all seats on the aircrafts. By filling up available spaces from the amount of passenger traffic helped to
make up the low fares that they offered to customers. SWA also concentrated on their route system to
handle and offer a suitable number of daily flights to some cities near each other. Moreover, they also
implemented the quick turnover of flights with boarding times ranging from 15-30 minutes to create
more daily flights.
3.
The key elements of Southwest Airline culture are:
- Fun atmosphere and work environment: promoted through many parties and celebrations that
have been sponsored by the company, working environment is not too stress due to jokes, ongoing
pranks and entertaining behaviors of employees when doing their jobs.
- High compensation, numerous incentives and “can do” attitude.
- Company’s culture is never giving up: developed through all the adversities the company had to
face.
- Cost-consciousness: seeking to reduce cost in every step of the business.

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1. It is clear that SWA has followed the low-cost provider strategy in the five generic competitive strategies that discussed in Chapter 5 by providing lower overall costs including fares cost, customer pleasing services cost and operating costs than other companies and then trying to find ways to make up the costs. For example, SWA has only operated one kind of airplane. SWA is the first company to introduce ticketless travel or point to point scheduling of flights. It shows that the company put their entire effort on finding ways to reduce cost as well as make up the low-cost in every s ...
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