Keywords: southwest airlines quest, southwest airlines values
The most impressive thing I find about Southwest Airlines (SWA) is the annals of the business. I must say i admire how Herb Kelleher fought to produce SWA, even though everything and individuals were against him, and exactly how his warrior heart has formed the organization´s culture and performance.
Also it is very impressive to me how the company can be profitable with a low cost strategy. It really is popular that airlines companies do not make any gain even with high ticket prices so that it is very amazing to me how SWA is prosperous in this aspect.
Finally I am really impressed with its human resources management and the soul of the company. I came across really interesting that a customer influenced business dedicated to sales has one of its key principles saying "Employees come first and customers come second". I think it is a really smart thought to believe that happy employees will keep customers happy.
What grade will you give Southwest management for the work it has done in crafting the company's strategy? The facts that you want or dislike about the strategy? Will Southwest have a winning strategy?
In my opinion, management does a congrats crafting the strategy of the company. At the beginning, Herb Kelleher saw market opportunity with the air travel triangle and fought hard to support the company. Along with his performance and behavior indirectly he was preparing the pillars of Southwest. Since the beginning Herb set up the objective and vision of Southwest and targets pointing out the road to follow.
Also Herb hired very talented professionals and managers with much experience in the sector.
The only thing that I really do not like about the SWA strategy is the fact that I think is bound on progress. The planes purchased, the international airports working at and some in-flight services such as not offering meals limit the opportunity of broadening internationally.
- Does the strategy fit the company's situation?
- Has the strategy yielded a ecological competitive advantage?
- Has the strategy produced good financial performance?
In my estimation, SWA has excellent performance in each of the questions.
The strategy fit competitive conditions on the market (exterior) and has important resources and capacities. Also the cost reductions completed by the company confers a competitive gain over rivals and the financial performance is excellent.
What will be the key policies, steps, operating practices, and core ideals underlying Southwest's initiatives to put into practice and do its low-cost/no frills strategy?
Using only 1 type of airplane: as it is discussed in the event, only using Boeing 737 allowed them to reduce to minimize the size of extra parts inventories, simplify the training of maintenance and repair staff, improve the skills and quickness with which maintenance regimens could be done, and simplify the task of scheduling planes for particular plane tickets.
Introduction of ticketless travel: this element helped SWA to reduce cost related to visit brokers and emission of paper tickets.
Deemphasizing of congested international airports, helping them to produce "better-than-average on-time" performance and reduce gas cost.
Implementation of point-to-point scheduling of flights, which is more cost-efficient than the hub-and-spoke systems integrated by competition airlines.
Use of fuel hedging and derivate agreements to counteract growing charges for crude essential oil and jet gasoline.
Empowerment of employees and TQM methodology, contributing to fast problem handling and efficiency.
The motto "employees are first, customers second" has generated a solid company culture motivating employees to do their careers in the best way, achieve goals and aims more efficiently and thus, creating a direct contribution to the company´s success.
What are the important elements of Southwest's culture? Is Southwest a strong culture company? Why or why not? What problems can you foresee that Gary Kelly has in sustaining the culture given that Herb Kelleher, the company's spiritual leader, has departed?
Fun atmosphere and work environment: advertised through entertaining manners in undertaking their jobs, an ongoing pranks and jokes, and repeated company-sponsored people and festivities.
High settlement and numerous bonuses.
"Can do" frame of mind: this allows the employees of the company perform their jobs effectively, solve problems effectively, overcome adversities and celebrate the business's success.
Company's culture of not quitting: developed through all the adversities the business was required to face
Cost-consciousness: seeking to reduce costs atlanta divorce attorneys step of the business enterprise.
Empowerment of employees: this motivates employees and makes them feel as an important area of the company.
In my judgment it is clear that that Southwest Airlines is a strong culture company. All elements directed before make employees of SWA feel as part of a major family alternatively than just employees of accompany would you not value them. This feeling make the employees to work hard for the success of the company and they start to see the company´s success as professional and personal successes.
Regarding the problems that I could foresee with Gary Kelly's campaign, and based on the information given in the event, I cannot foresee real problems on sustaining the culture. Gary has been in the company for enough time to know those are the key principles of SWA and the key components of its success. Maybe really the only problem I foresee is the fact that Kelleher was very important for the organization and it will have a while to Gary to get that position but the path that he will walk will be the same as the one strolled by his forerunner. This is suffered with the video tutorial watched in category. In the video Gary Kelly was presented as a "down to earth" supervisor who knows most of his employees, but still comes after the ideas proven by Kelleher like "treating the clients as queens and kings and employees better".
What grade can you give Southwest management for the work it did in employing and executing the company's strategy? Which of Southwest's strategy execution techniques and operating tactics do you believe have been most crucial in accounting for the success that Southwest has relished in performing its strategy? Any kind of policies, types of procedures, and operating solutions at Southwest that you disapprove of or that are not working well?
SWA is mainly characterized on recruiting the best and bights people they will get and then preserve them with excellent reimbursement plans, opportunities for fast advancement and professional development, and challenging and interesting tasks.
The success of SWA was to take on those activities which were critical in its low-cost strategy. The company only runs one type of aeroplanes, was the first company to add ticketless travel or point-to-point arranging of flights. These are just few examples on how research and marketing departments put their complete work on finding ways to lessen cost atlanta divorce attorneys step of the service offered.
Also the TQM way is very good implement because of the empowerment of employees in any way levels: "empowering people to take decisions will make a confident difference every day" and the improvement of total customer service and satisfaction by employing personnel who loved interacting with customers and developing marketing tools as frequent-flyer program and quick reward based on trips flown somewhat than mileage.
SWA has an extremely strong corporate and business culture fostered by its executive management level. In SWA managers are expected to invest at least one-third of their own time out of the office, travelling the facilities under their guidance, observing firsthand what is going on, listening to employees, and being responsive to their concerns. Also company executives are extremely approachable and in 1990 formed a Culture Committee. All this things also help to pursue the goal of client satisfaction.
SWA also presumed in training and marketing promotions. Around 80-90% of SWA supervisory positions were filled up internally. Also the salaries are above the industry average. It introduced a profit showing plan for older employees and stock option programs. All this contributes significantly on tying rewards to the success of performance objectives.
For all this reasons I think that SWA management deserves an A for the work done in performing the company´s strategy.
The strategies and operating methods most important in accounting for the success that Southwest has relished in executing its strategy has been their cost containment, recruiting process and corporation´s culture.
Regarding the procedures, procedures, and functioning approaches that aren't working well I could see that there surely is a weakness regarding the support systems. Many case analysis of the business explain that Southwest must be asked to modify and upgrade a significant portion of its interior software to guarantee that its computer systems will function properly.
What weaknesses or problems will you see at Southwest Airlines?
The weakness I see in SWA is related to one point of its strategy. The current strategy of only traveling to "second lines" airports presents a problem of limited development and you may still find big cities in america without SWA services. And this is contradictory with the ideas of Gary C. Kelly. Since it is explained in the case, during his tenure as a CEO, Kelly has worked with other top-level Southwest executives to sharpen and fine-tunes SWA´s strategy in a number of areas and prolonged expanding the operations (adding both more plane tickets and initiating service to new airports). The existing strategy has a "space" limit that will restrain company's needs of expansion.
What recommendations can you make to Gary Kelly?
The first advice I am going to make to Gary Kelly is to attempt to continue with the business as it is, feeding company's culture and good environment. Also make an effort to keep their low-cost strategy even through bad times.
The second advice I would make to Gary Kelly will be to modernize its fleet ( I have read that it's somewhat old), purchase bigger planes and develop the plane tickets to other main locations in the U. S and broaden their business to other countries close to the U. S such as Mexico or Canada.
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