The Success of Southwest Airlines
Southwest Airlines began in Texas as a small airline company. In less than ten years, the airline company grew to become a leading competitor in the aviation industry. For three decades, the airline company was successful due to several factors. The company’s success resulted from the efforts and corporate culture initiated by Herb Kelleher after becoming the CEO. He took over after the resignation of Lamar Muse in 1979. The founders of the company emphasized the importance of an effective start-up. This is what led to its future success. The company purchased three Boeings to offer effective services to targeted customers. The company scheduled the planes properly to attract more customers to its business (Oum, 2000). This strategy made it possible for Southwest to offer stiff competition to the major airlines in the industry. The company attracted more customers using its promotional approach. The company also advertised widely and expanded its business to other cities across the country. This was a major challenge to its competitors.
The company used effective pricing techniques for its business. The prices were attractive compared to those of the competing companies. Southwest Airlines lowered its prices and offered free drinks to the passengers. This promoted its business and led to the attraction of more passengers. The company’s management also created a positive reputation through proper service delivery and attractive corporate culture. The company’s reputation was characterized by competitive prices, quality services and lesser restrictions for bookings and travelling. This was effective and helped promote the business of the company (Griffin & Moorhead, 2011). The corporate culture developed at the company also propelled its business to the next level. Southwest was the best place for the managers, the employees and even the passengers. Every person wanted to be part of the company’s culture. The combination of these factors has led to the success of Southwest Airline. The management has continued to address the major challenges and obstacles affecting the performance of the company.
The 10 to 15 Minutes Turnaround Time
From the case study, it is notable that the 10 to 15 minutes turnaround time was significant in terms of aircraft utilization and savings in investments. The company used crews of six employees on the ground to perform over 40 tasks in fifteen minutes. The other companies in the industry used crews of 12 to perform the same tasks in an hour. The 15 minutes turnaround time was critical for Southwest Airline because it promoted savings and service delivery. The employees were committed to complete the same task within a short time. For the other companies, the turnaround time was more than one hour and required crews of 12 or more employees. The approach ensured the employees were committed towards the success of the company. In the past years, the airline company has provided quality services to its esteemed passengers (Radnoti, 2002).
The turnaround time is effective because it helps to maximize the capability of the aircraft. The approach is a critical aspect that has made it possible for Southwest Airline to remain a leading competitor in the aviation industry. It has minimized its level of investments because of a lesser number of employees complete over 40 tasks in less than 15 minutes (Raymond, 2011). The savings made by the company help to reduce expenses and use the aircraft effectively. This has become a major competitive advantage against competing companies in the industry. The approach will make the business of Southwest Airlines successful in the coming years.
Future Challenges Faced by Southwest Airlines
Southwest Airline has remained successful for over three decades. However, its future business faces several threats and challenges. If these threats are identified, it will be possible to offer solutions to them. After the September 11 attacks, the airline industry has faced similar challenges such as a weakening economy, terrorism, increased energy costs, and global insecurity. The airline company has some other future challenges that might affect its business. To begin with, labour issues have resulted in a situation whereby employees demand pay increments. The company is facing certain problems such as labour constraints between the workforce and the management and increased competition (Samli, 2005). The other notable challenge is that the market has become crowded with low-cost and low-fare airlines. These companies are posing a major challenge to the business of Southwest Airlines. The corporate culture founded by Kelleher has changed in the past years. The management has also changed thereby affecting the normal business at the company.
For the company to overcome these challenges there is a need to have new managerial structures. The approach will bring new ideas to overcome some of the challenges such as labor relations and organizational culture. The new management should address the needs of the employees and improve the nature of communication. This will lead to a better corporate culture capable of promoting the company’s business. The industry has become competitive thereby posing a major challenge to the company. To overcome the challenges, Southwest Airlines can develop a new strategy to compete in the industry (Saren & Maclaran, 2005). For instance, the idea to rebrand its aircrafts and use competitive prices will make its business successful in the future. After James Parker resigns from the company, the new CEO should have the expertise to propel the company to higher heights. The company will be successful after addressing all the challenges identified above.
Southwest’s Business and Operations for the Future
The strategies used by the management will determine the success of Southwest Airlines. If the company is to succeed in the future, there is need to consider the needs of the customers and provide them with better services. Southwest Airlines can offer reduced prices and promote the use of new technologies. These technologies will improve service delivery at the airports. The airline can use electronic equipment to check passenger’s luggage. This strategy will improve service delivery. The company can also employ more people with expertise to ensure the passengers are getting the best services from the airline company. The managers should consider the best ideas to promote its competitive advantage. The use of pricing strategies and discounts can help the company to succeed in the future (Oum, 2000). Security issues have affected the success of different companies in the aviation industry. Southwest Airlines can improve its business by improving security levels aboard the planes and on the ground.
Forecasting is another strategy that can secure the company’s future business. With proper forecasting, the company will improve its services by covering new cities in the United States and even abroad. Diversification is another approach that can promote the business of the company. The business strategy will make it easier for the company to consider offering transportation and logistics services to several customers. The management can also consider the importance of a reputable business culture. A positive corporate culture will empower the employees and attract more customers to the company (Oum, 2000). The above business strategies and approaches will ensure the future of the company is brighter than ever before.
Gary Kelly and the Future of Southwest Airlines
The corporate culture embraced by the CEO will critical to the future success of Southwest Airlines. The new Chief Executive Officer should promote the existing corporate culture if the airline company is to succeed. I believe that Gary Kelley has the potential to lead the company to its destiny. Kelly joined the company as a Controller in 1986. He has worked for Southwest Airlines for over twenty years. Kelly is aware of the culture developed by Kellenher as the founder of the company. He has also worked as the company’s Financial Officer for several years. He knows the weaknesses and strengths of the company. The new CEO should emphasize on the company’s strengths to make the company successful. He should also address the major weaknesses that continue to affect the company (Miner, 2007).
Gary Kelly should understand that the success of the company results from its corporate culture and employee empowerment. If Gary is to remain successful as the new CEO, he will have to practice the corporate culture of the company. The approach will ensure the company remains profitable. Gary Kelly is the right person for the job because he has an idea of the positive culture practiced at Southwest Airlines. Although some people are pessimistic about the idea, the important thing is to support Kelly after becoming the company’s new CEO. He has interacted with the employees and can competently address their needs and demands (Mark & Saren, 2009). The approach will make it possible for the company to remain profitable in the industry. The trick towards the company’s success is for Kelly to maintain its corporate culture.
References
Griffin, R. & Moorhead, G. (2011). Organizational behavior: managing people and organizations. New York: Longman.
Mark, T. & Saren, J. (2009). The SAGE Handbook of Marketing Theory. London: Sage.
Miner, J. (2007). Organizational Behavior: From theory to Practice. New York: Oxford University Press.
Oum, T. (2000). Shaping Air Transport in the Asia Pacific. Ashgate: Aldershot Press.
Radnoti, G. (2002). Profit Strategies for Air Transportation. New York: McGraw-Hill.
Raymond, A. (2011). Fundamentals of human resource management. New York: McGraw-Hill.
Samli, C. (2005). International consumer behavior: its impacts on marketing strategy. London: Cengage Learning.
Saren, J. & Maclaran, P. (2005). Critical Marketing: defining the field. New York: Oxford University Press.