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Case Study "Southwest Airlines"

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Sebastian Ybarnegaray

on 30 May 2014

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Transcript of Case Study "Southwest Airlines"

HOUSTON
DALLAS
SAN ANTONIO
NEW MEXICO
OKLAHOMA
LOUISIANA
ARIZONA
NEVADA
CALIFORNIA
TEXAS
BALTIMORE
Florian Felschow
Anne Polle
Cornelia Petersdorf
J. Sebastian Y. Wende

SOUTHWEST AIRLINES IN BALTIMORE
2001
Presentation 1
Strategic Audit & Case Solution
highest quality of Customer Service

warmth, friendliness, individual pride,
and Company Spirit.

stable work environment with

equal opportunity for learning and personal growth
MISSION
even as they’ve grown and evolved over the years, they’ve never lost sight of their original vision. It is still who they are 34 years later:

low fares
convenient flight schedule
Legendary Customer Service.
VISION
1.       How does Southwest Airlines (SWA) compete? What are the advantages relative to other airlines?

2.       The plane turnaround process requires coordination among twelve functional groups at SWA. Please evaluate the plane turnaround process at Baltimore -resource utilization, capacity, bottlenecks, information flow, etc. How is the process working?

Why is the operational performance eroding?

3.       What problems do you identify that require action? What would you recommend Matt Hafner to do?
CASE „Southwest Airlines in Baltimore“

1. Industry Structure and Competition
2. Strategy
3. Corporate Culture
1.       How does Southwest Airlines (SWA) compete? What are the advantages relative to other airlines?
Family structure:
also between pilots and air-traffic-control

High investment in Human Resources:
People University
high competences through tough training (in charge of holding a flight for connecting passenger)
decentralized coordination
3. Corporate Culture
Cost leadership:
standard fleet (Boeing 737)
only less-congested airports with good infrastructure to metropolitan areas
high frequent flights
limited service on board
long-term contracts for payments

Differentiation:
extraordinary service on the ground (

least complaints)
very fast turnaround
no charging of the credit card until boarding
2. Strategy
Competition environment of SWA includes all kinds of short-distance-traffic like bus, car, aircraft and train
1. Industry Structure and Competition
2.       The plane turnaround process requires coordination among twelve functional groups at SWA. Please evaluate the plane turnaround process at Baltimore -resource utilization, capacity, bottlenecks, information flow, etc. How is the process working?

Why is the operational performance eroding?
Turnaround Process
The Plane Turnaround Process
Short connecting time between two flights
If delays  often holding flights for passengers 
e
even shorter turnaround process
inexperienced overworked staff 
c
coordination takes longer

Operational performance is eroding
SWA expand to the NE of US (Baltimore)
Baltimore had become one of the „Mega-Stations“ of SWA
More connecting passengers than in other stations causes Capacity bottlenecks

Better: Next expand with sufficient stuff power
More efficient use of available resources
Maybe Joint Venture or Alliance with a domestic Airline
The Expansion Problem
Schedule strategy
SWA has a marketing driven flight schedule
 Result: high number of short distance flights
with one or two stops

Better: operational driven schedule
Effects more efficient customer transportation
The Strategy Problem
-2-
Stuck in the middle
SWA follows both: differentiation and cost leadership

Better: strategic focus on core competences
SWA = cost leadership in its segment
Other companies has to follow SWAs price structure and they are not successful with copying SWAs structures
The Strategy Problem
-1-
Strategy ends as „Stuck in the middle“
„High-speed“ expansion in Baltimore
Flexible Check-In
Too many short distance flights on schedule
Capacity bottlenecks
Eroding of the operational performance in Baltimore
3.       What problems do you identify that require action? What would you recommend Matt Hafner to do?
Thank you for flying with us!

Identified Problems
The main fields
Challenges During the Turnaround
Analysis: Getting Started
1. What is Strategy and Why Is It Important?

2. The Strategic Management Process
External and Internal Analysis
Formulation: Business Strategy
Formulation: Corporate Strategy
Implementation
3. External Analysis: Industry Structure, Competitive Forces, and Strategic Groups

4. Internal Analysis: Resources, Capabilities, and Activities

5. Competitive Advantage and Firm Performance
6. Business Strategy: Differentiation, Cost Leadership, and Integration

7. Business Strategy: Innovation and Strategic Entrepreneurship
8. Corporate Strategy: Vertical Integration and Diversification

9. Corporate Strategy: Acquisitions, Alliances, and Networks

10. Global Strategy: Competing Around the World
11. Organizational Design: Structure, Cultural, and Control

12. Corporate Governance, Business Ethics, and Strategic Leadership
GAINING & SUSTAINING COMPETITIVE ADVANTAGE
Full transcript