Step 1 - Establish a sense of urgency. A framework is presented illustrating that . Some of the areas that require urgent changes are - organizing sales force to meet competitive realities, building new organizational structure to enter new markets or explore new opportunities. Southwest Airlines: Using Human Resources for Competitive Advantage. Its main competitive advantage is its workforce. That means Southwest has bigger reserves in cash, credit, and other . Jet Blue is the only airline to carry satellite televisions on planes. An organization built on the fundamentals of customer eccentricity, effective processes, and a dedicated team is meant to achieve success and overcome challenges. AWA emergence and concept. Rating * Select Rating 1 star (worst) 2 stars 3 stars (average) 4 stars 5 stars (best) Name. Southwest Airlines Co.'s strengths are the internal factors that contribute to high operational productivity and business competitive advantages. Considers how Southwest had developed a sustainable competitive advantage and emphasizes the role of human resources as a lever for the successful . Quantity price applied. Thus, their airplanes routinely turn around 15 minutes from the time it arrives at the gate, in comparison to the 35 minutes it takes for its competitors.Productivity also lies within its employees, where it takes an average of 81 Southwest employees to serve an . The case is set in 2010, and Southwest has emerged as one of the leading U.S. airlines (#1 by passenger volume) through a combination of unique culture, sound management practice and focus on the consumer. From 1991 to 1993, Southwest had increased its market share of the critical West Coast market from 26% to 45%. That is, can fuel hedging be considered a core competence according to the resource-based . Design the physical space to enforce culture. Southwest flights, a limited amount of checked. For example, the effects of this corporate culture combine with the business strengths identified in the SWOT analysis of Southwest Airlines Co. to reinforce competitive advantages, especially against major competitors. Maslow's Theory of Hierarchy and its Application to Southwest Airlines According to Chapman (n.d. We Will Write a Custom Case Study Specifically. All their success and drive to have the best technology and customer experience leaders has resulted them to compete with the large 4 airline operators from a tiny 3-passenger aircraft flying only in Alaska. The big idea: Southwest Airlines pioneered a new model for the low-cost airline carrier space.But now, as an established player and one of the four largest airlines, the same model might not . Headquartered at Love Field in Dallas, the airline followed a strategy of low fares, few frills, and excellent customer service. . Read the following excerpt from the Southwest Airlines case study we discussed in class and evaluate if fuel hedging can be a source of sustainable competitive advantage for Southwest. Southwest Airlines advances itself as an on-time, ease supplier of air travel, conveying the guaranteed essential services to the clients. Roger Hallowell. 2.1. A Competitive Brand Advantage From the early days in Texas, Southwest has run a tight and efficient ship through their business operations. This study seeks to achieve a better understanding of how legitimacy-gaining initiatives become a source of competitive advantage through the mediation of customer satisfaction. While the entire US airline industry was reeling under heavy losses following the September 2001 terrorist attacks, Southwest was successful in posting modest profits. Southwest's ability to hold the line on costs will impact its cost leadership position. The company provides air travel services. Comments *. Southwest averages nearly forty percent fewer employees dedicated to an aircraft than industry average (81 vs. 130), a testament to their productivity. Publication Date: Jan 01, 1995. Competitive Advantage: Southwest Airlines, Generating Competitive Advantage through Human Resources Management,It was considered the most successful airline company in the US. Competitive advantage Corporate strategy Human resource management Implementing strategy Organizational behavior. STEP 11: Recommendations For Southwest Airlines Using Human Resources For Competitive Advantage Case Study (Solution): There should be only one recommendation to enhance the company's operations and its growth or solving its problems. In 1992, when every major U.S. airline except Southwest lost money, Southwest actually reported a sharp jump in its net profit to $105.5 million on rev enues of $1.68 billion, up from $26.9 million on revenues of $1.31 billion in 1991. Hallowell, R. (1996). Southwest is profitable because of two factors: its low costs and the loyalty of its customers. luggage on Southwest' s typically 60- to 90 . Southwest airlines: A case study linking employee needs satisfaction and organizational capabilities to competitive advantage. This lesson will consider three aspects of Southwest's competitive advantage that have led to its great success: a commitment to employees, tremendous flexibility, and low operating costs. This gives them a competitive advantage, which is defined in the textbook as the achieved advantage over rivals when a company's . This model of exceptional customer service can help a business earn an impeccable reputation in the industry. The question of whether the departure of Kelleher had created any impact on the business of the company is also another issue that should be further explored. Read More. At Southwest Airlines' headquarters in Dallas, Texas, the office has been recently redesigned around "culture centers" on each of the floors. In 1994, both United Airlines and Continental Airlines launched low-cost airlines-within-an-airline to compete with Southwest Airlines. Southwest airlines: A case study linking employee needs satisfaction and organizational capabilities to competitive advantage. STEP 11: Recommendations For Southwest Airlines Using Human Resources For Competitive Advantage Case Study (Solution): There should be only one recommendation to enhance the company's operations and its growth or solving its problems. Southwest Airline's competitive advantage has to do with their business model in providing and leveraging operations that are efficient, focusing on the customer experience, low-cost solutions and pricing . It's profitable. Download. The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance. The AWA strategy has been a response strategy by a number of airlines around the world to combat the aggressive growth of LCCs that followed the deregulation of the airline industry between 1970 and 2000 (e.g. Operations Management questions and answers. From 1991 to 1993, Southwest had increased its market share of the critical West Coast market from 26% to 45%. Read the following excerpt from the Southwest Airlines case study we discussed in class and evaluate if fuel hedging can be a source of sustainable competitive advantage for Southwest. "Southwest Airlines: A Case Study Linking Employee Needs Satisfaction and Organizational Capabilities to Competitive Advantage." Human Resource Management (winter 1996 . World's Most Admired Company. Operations Management. A competitive advantage they've never relinquished. HRM Case Study: Southwest Airlines' Competitive Advantage. It can offer cheap flight tickets by creating an extremely efficient operation. New York, NY. Southwest Airline's competitive advantage has to do with their business model in providing and leveraging operations that are efficient, focusing on the customer experience, low-cost solutions and pricing . Flexible approach to customers . Human Resource Management, 35(4), 513-534. This means they need a smaller load factor (about 55%) on their planes to break even. Forged over 45 years, Southwest's culture has been a source of sustainable competitive advantage. What are the foundations of Southwest's competitive advantage? How does Southwest Airlines differentiate itself from its competitors? Roger Hallowell, . However, Southwest has managed to stay competitive and thrive in this industry. Southwest Airlines has consistently been ranked as one of the best employers in America. Competitive advantage is a position of a company in a competitive landscape that allows the company earning return on investments higher than the cost of investments. All of Southwest's employees receive a card from their employer on their birthday, the date of their anniversary, Thanksgiving, and Christmas. The short flights essentially last for one hour or even less. $5.00. Roger Hallowell. case study question. What are areas that require urgent change management efforts in the " Southwest Airlines (A) " case study. SOUTHWEST AIRLINES COMPETITIVE ADVANTAGE 2 Abstract The research topic of this case study is Southwest Airlines and their successful customer service provided by their competitive advantages. The report on Southwest airlines case study would investigate the extent to which the business would get impacted by the variation in competition, culture, and cost parameters. While most of the legacy airlines have struggled, Southwest continues to succeed. Southwest Airlines has been innovative in its business approaches, a fact aided by technological advancements within the business. The most distinguishing feature of Southwest Airlines is its culture. 2005. The economic crisis resulting from the Covid-19 pandemic is putting multiple companies out of business and that is certainly reflecting on the commercial flight industry as well. For You For Only $13.90/page! We will write a custom Case Study on Southwest Airlines: Sustaining Competitive Advantage specifically for you! Stanford, CA: Graduate School of Business, Stanford University. Net income up dramatically in 1993 over 1992. Flexible approach to customers, employee focused, low operating costs Modern approach to customers, focused on innovation exclusively High operating costs which show the companies complete focus on. The Southwest Airlines case study is a lesson in cultural strategy. The decision that is being taken should be justified and viable for solving the problems. Southwest airlines: A case study linking employee needs satisfaction and organizational capabilities to competitive advantage. Organization successfully adjusts its authoritative structure and every single related operation on giving these purchaser services on the reported mission and objectives. Southwest Airlines (A)Harvard Case Study Solution and HBR and HBS Case Analysis 1. The integration of OpsSuite within the airline allows employees to have an accurate representation and up to date status of an airplane undergoing maintenance. Southwest was founded in 1971 with a fleet of three Boeing 737 aircraft. (No reviews yet) Write a Review. Essay, Pages 6 (1449 words) Views. employing economic analysis tools to illustrate the roles of commitment and organizational capabilities in delivering competitive advantage at Southwest. From the case, Southwest Airlines operate in 64 U.S. cities and other parts of the world. 27 pages. In 1994, both United Airlines and Continental Airlines launched low-cost airlines-within-an-airline to compete with Southwest Airlines. Better Essays. The most significant factor that has been able to make Southwest more competent is that the company has been adhering to its distinct business model. The company added flight segment of over three hours in 1984 and assumed its services with minimal onboard catering. Introduction. Southwest Airlines: In a Different World. It's never had a labor dispute. . Worksheet. Write a Review. Competitive advantage should be relevant, unique and sustainable. Southwest Airlines' successful and profitable business model has been driven by several strategies: high aircraft . Its passenger load factor is strong. The Southwest Airlines strategy is best explained by its co-founder Herb Kelleher during a talk at Wharton: "It's an obsession with keeping costs low and treating employees well and a commitment to managing the company during booms with an eye to the busts that will inevitable follow. What strategic recommendations can be made to strengthen the durability of the company's competitive advantage; or do conditions suggest that it is time for a shift in Southwest Airlines' strategic direction to achieve long-term competitiveness against its rivals. Why Low Prices Alone Are Not a Competitive Advantage. According to recent Forbes ranking, Southwest Airlines is ranked #2 America's Best Employers 2019. The following report is an analysis of a case study conducted by Hallowell (1996) to determine whether. That is why it is essential that Southwest Airlines enforces strategies that allows them to outperform other airline companies. Southwest Airlines is the second-largest US based Airline in the world, which comprises of 144.6 million total passengers boarded in 2015. employing economic analysis tools to illustrate the roles of commitment and organizational capabilities in delivering competitive advantage at Southwest. Does Southwest Airlines have a sustainable competitive advantage? The Southwest Airlines business model is based on the low-cost business model. Why Southwest Airlines' competitive advantage might be saying 'no'. 3. Unformatted text preview: Southwest Airlines Competitive Advantage MGMT 221 Southwest Airlines Competitive Advantage An airline that is currently a major force in the industry is Southwest Airlines.The airline business is a hard business to succeed in. Conclusion: Southwest can afford to invest in fighting off the competition. industry. A little evidence of Southwest's success That is, can fuel hedging be considered a core competence according to the resource-based . Retrieved 21 April 2021, from -competitive-advantage-might-be-saying-no/ Britannica, T. Editors of . Operations Management. Early on, the airline faced many political and regulatory challenges including the Wright . O'Reilly, C., & Pfeffer, C. (1995). Print. Southwest Airlines Case Study Analysis. SOUTHWEST AIRLINES COMPETITIVE ADVANTAGE 2 Abstract The research topic of this case study is Southwest Airlines and their successful customer service provided by their competitive advantages. Managers at Southwest Airlines Co. can not only use Porter Five Forces to develop a strategic position with in Regional Airlines industry but also can explore profitable opportunities in whole Services sector. It has revealed strong growth over the last three decades. In 2019, Southwest Airlines was ranked #11 Fortune's most admired company in the world. A framework is presented illustrating that much of the value Southwest generates is (1) created through employee needs satisfaction, (2) converted to customer and shareholder value via organizational capabilities, and (3) captured by the firm as a result of its cost advantage and superior service. Even U.S. low-fare heavyweight Southwest Airlines ( LUV 0.13%) -- which has reported 47 consecutive annual . Southwest Airlines has attained considerable competitive advantages in the business realms having enacted and embraced stringent and viable value chains in its endeavors. Each center highlights one of the company's values and provides break services (coffee and kitchen facilities), meeting rooms and quite a bit of . As, their business model is unique as well as designed very carefully based on the needs, goals and vision of the organization (Morrison, 2001). Barkin et al., 1995, Dunn, 2008, Gillen and Lall, 2004, Gross and Luck, 2016, Ramaswamy, 2002, Rose, 2012, Tan, 2016, Zhang et al., 2009). . This cost could be impacted by union actions, which cover 84% of Southwest's workforce. The modernization to bring Southwest airline to the 21 st century is always ongoing. by Charles A. O'Reilly, Jeffrey Pfeffer. Competitive Advantage: Southwest Airlines, Generating Competitive Advantage through Human Resources Management,It was considered the most successful airline company in the US. 5. 1814 Words; 8 Pages; Best Essays. Southwest found that a swift turn around of an aircraft created cost advantage. In this SWOT analysis case, such strengths enable the company to compete against other major airlines, and take advantage of growth opportunities available in the industry environment. Case Studies Southwest Airlines "Our goal is to have the cloud seamless and transparent - so our customers . Southwest Airlines (B): Using Human Resources for Competitive Advantage case study solution, Southwest Airlines (B): Using Human Resources for Competitive Advantage case study analysis, Subjects Covered Competitive advantage Corporate strategy Human resource management Implementing strategy Organizational behavior by Charles A. O'Reilly Do that and most of the rest takes care of itself.". A framework is presented illustrating that . . Where the airline has really excelled however has been through a deep focus on customer experience, low-cost pricing and logistics solutions. Just last year they put the heat on larger airlines by acquiring Virgin Airlines for 2.5 billion dollars (Kim 2016). We will write a custom Case Study on Southwest Airlines Company's Competitive Advantages specifically for you for only $16.05 $11/page 812 certified writers online Learn More Introduction Over the past years, Southwest Airlines has recorded a track of good performance. While the entire US airline industry was reeling under heavy losses following the September 2001 terrorist attacks, Southwest was successful in posting modest profits. Revenue continues to grow. Worksheet. employing economic analysis tools to illustrate the roles of commitment and organizational capabilities in delivering competitive advantage at Southwest. 1541. The largest cost component (36.9% of expenses) is labor. Operations Management questions and answers. Source: Stanford Graduate School of Business. References Gittell, J. In studying competitive advantage, we have gone a long distance from Michael Porter's three generic strategies of niche, mass, and low-cost. Only three airlines survived the after 2001, American , Delta and South West. Debt is down. Southwest Airlines entered the US airline market after a lot of struggle operating its first flight in Jan 1971. 5. Let's. Considers how Southwest had developed a sustainable competitive advantage and emphasizes the role . Modern competitive strategy will often examine firms from a resource-based view. Question 1. View 1.4 Case Study Airline Competitive Advantage.docx from MGMT 211 at Embry-Riddle Aeronautical University. As per the exhibits the load factor for southwest is 0% with highest domestic . Prod. This reinforcement is advantageous in ensuring the company's long-term success as a major firm in the civil aviation market. Value Chain Analysis. INNOVATION AND COMPETITION BROUGHT BY SOUTHWEST AIRLINES. Southwest Airlines: A Case Study Linking Employee Needs Satisfaction and Organizational Capabilities to Competitive Advantage. 4. The companys main competitive advantage includes: charging low fares from customers, providing an improved customer experience, adoption ofa . Porter Five Forces focuses on - how Southwest Airlines Co. can build a sustainable competitive advantage in Regional Airlines industry. Through a case study of five major US airlines (American Airlines, Delta Air Lines, Southwest Airlines, United Continental, and US Airways), the authors analyze the . Southwest Airlines (B): Using Human Resources for Competitive Advantage case study solution, Southwest Airlines (B): Using Human Resources for Competitive Advantage case study analysis, Subjects Covered Competitive advantage Corporate strategy Human resource management Implementing strategy Organizational behavior by Charles A. O'Reilly Southwest is one of the big four airlines in the U.S., along with American Airlines ( AAL ), Delta ( DAL ), and United ( UAL ). It leads on financial measures too. For this success, the factors that wer e. responsible, were; an absence of meals on all. Get your first paper with 15% OFF Learn More Typically, the company offers more than 2700 flights on a daily basis in an excess of 55 cities across more than 30 destinations. It also used a technological system to carry out its procedures. This posting is about the Stanford University, Graduate School of Business Case study focusing on Southwest Airlines as an example of leveraging human resources into a distinct competitive advantage. Southwest Airlines (B): Using Human Resources for Competitive Advantage ^ HR1B. However it took the market with surprise by providing lowest prices. . The decision that is being taken should be justified and viable for solving the problems. McGraw Hill. Southwest Airlines employs more than 45 000 employees (Southwest Airlines one report, 2011). #: HR1A-PDF-ENG. Southwest Airlines is competing against other airline companies for customers. The challenge to remain committed to their customers goes far beyond reserving a ticket. Few airlines in the world have been spared from the wreckage of the COVID-19 pandemic. Hallowell, Roger. A framework is presented illustrating that .