Introduction:Southwest Airlines Corporation was incorporated in Texas in 1971 with only three Boeing 737 aircraft's and gradually expanded to 417 Boeing 737 jets that drive the company to success. Southwest provides services to 60 airports in 31 states throughout the United States competing with airlines such as United, American, Delta and JetBlue. Southwest Airlines prides themselves as the nation's low-fare and high customer satisfaction airline. In 2005, Southwest Airlines was recognized as the most admired airline in the world for the ninth year in a row. They were also recognized for their customer satisfaction, best bonus promotion, and best award redemption. Southwest was also the first airline to introduce profit sharing to their employees.
Problem:Southwest Airline's strategy of providing low fares and excellent customer satisfaction through their employees has proven to be very successful; their heavy dependence on their employees can pose a threat for the corporation. Southwest's strategy can be reproduced by their competitors and their competitors can utilize Southwest's competitive edge and improve on it.
The focus of keeping their employees satisfied may allow employees to have too much authority within the organization and become a threat to the company itself.
Analysis:Strengths - Southwest Airlines has been known to be very efficient in the industry in order to achieve the success. Southwest is a stakeholder conscious organization and understands that success starts with the employees. The employees will in turn provide excellent and effective customer service to their passengers. Southwest has been able to maintain a low employee turnover ratio. Southwest has also successfully implemented an online-booking system where over 60% of their sales are generated. They have efficient airline operations of getting from point A to point B through carefully selected airports. These ultimately help with the reduction of operating costs. The company has an...