Good Case Study On Southwest Airlines
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Effectiveness of Southwest Airline’s leadership
For any organization to be successful, effective leadership plays a major role. Poor performance in any field points out to failure from the part of the leadership to come up with necessary policies to propel an organization in order to meet its targets (Beeton, 2000). On a similar note, proper and effective leadership is always associated with success. This calls for the implementation.
In the case of Southwest Airline, analyzing the leadership should take two distinct stages. The first stage is when the organization was performing well under the stewardship of Her Kelleher. As already described in the scenario, Kelleher was a celebrated leader who acted as a backbone of Southwest Airlines. During his tenure, the company managed to become among the most profitable airlines in the world. In 36 straight years, the company made profits that could not be rivaled by any other. Coincidentally, such a period was characterized by positive programs and policies. Key among these was the high employee loyalty and the fun-friendly culture in the company. These can only be achieved in an organization where strong leadership is shown. Proper and effective leadership is essential in the formation of policies and programs that are beneficial to any organization. In most cases, leaders are judged by the success of the organization they lead (Lauer, 2010). Failure of an organization to meet its objectives means the leaders are not doing their role effectively. The fact that Kelleher championed for the ‘low-cost, no-frills’ strategy also speaks volumes about his managerial skills. Implementation of successful strategies is one of the key elements that ensure an organization is successful.
The second stage for analysis the post-Kelleher period. As from July 2004, the organization has been facing various challenges that have seen it lose its credibility and profitability at an alarming rate. Coincidentally, this is as a response of the change of the leadership. Most of the challenges faced are as a result of poor policies and failing to act on the basic requirements of the organization. The Airline’s major problems are threat to the culture of employee loyalty and problems related to the labor unions. These are internal influences that the leadership of the organization should have full control in. However, it is apparent that the organization’s leaders have failed to provide amicable solutions to the internal feuds of the organization, posing major challenges. Apart from the internal aspects, the leaders have also failed to protect the organization from the external environment (Lauer, 2010). Emergence into the industry of low-cost players such as AirTran and JetBlue has also posed a major threat. The management has also failed to take safety issues first, meaning that customers are exposed to danger because the organization failed to undertake the mandatory safety checks. To this point, the leadership of the organization is not effective enough. This calls for necessary changes in the implementation of policies and the necessary strategies.
Southwest’s competitive advantage and the potential challenges to its strategy
In business, competitive advantage occurs in a situation where an institution/ organization develops or acquires an attribute which allows it to perform better as compared to its competitors. Such attributes range from company to company. When an organization has a competitive advantage over its competitors, then it will inevitably be profitable as it attracts a lot of clients at the expense of the competitors. This can best be illustrated sing the case of the Southwest Airline and the competitive advantage it had over its competitors (Grubbs-West, 2005).
Initially, the organization outperformed all other organizations in the industry. This was based on the reliable attributes that had been associated with the Airline. For instance, the organization was the pioneer in the strategy of ‘low-cost, no-frills’. This strategy was not only attractive; it ensured that clients were satisfied with the prices that were charged by the organization. At this time, most Airline companies were very expensive; hence Southwest Airlines could attract more clients. This prompted the organization to become among the most profitable during the 1970s, with 36 years of profitability. Apart from this strategy, the Airline embraced a culture characterized by fun-friendly employees, who were also loyal. These two attributes were received well by the public, giving the organization an advantage over the competitors.
There are several potential challenges to the Southwest Airline Company. The first challenge is as regards the problems it faces with the labor unions. This is a major problem that should not be taken lightly as it is able to break the loyalty of the employees. If this is the case, then productivity in the Airline will drastically decrease, putting the organization in an awkward position. The second potential threat is as regards to the entry of low cost players such as AirTran and JetBlue. These companies have intensified competition in the industry, reducing Southwest Airline’s competitive advantage. The third and most significant threat is as regards to lack of taking adequate security mechanisms to ensure the clients are safe (Grubbs-West, 2000). By failing to undertake the mandatory safety checks, the company’s reputation may be in tatters.
Growth Strategies that Southwest Airline might Pursue
For Southwest Airline to rise to its former self and be competitive in the market again, there are several growth strategies that can be used. The first strategy is by correcting its previous mistakes and ensuring it is well-prepared to tackle the potential threats. Important t note is the fact that this company was once a big performer which has declined because of certain reasons. Change of leadership is inevitable. The company’s decline has been associated to poor managerial skills and strategies. Ever since the new CEO took over, the company’s performance has been dismal. This is unacceptable if the organization is to keep on challenging at the highest level. New leaders should come in and implement new strategies to ensure the organization has a competitive advantage over its competitors. This strategy has worked before, and there is no reason it cannot work in this case.
Apart from changing the organization’s management, it is essential for the organization to handle its competitors efficiently. For this reason, the organization should understand the strategies being used by both AirTran and JetBlue, which have since provided stiff competition for Southwest Airlines. After this, it would be essential to implement strategies that will work to its benefit. Such strategies should be geared towards attracting more clients to the organization and securing their long-term loyalty. By having loyal clients, the organization will be in a healthy position as it will be assured of a constant flow of clients. To achieve this, it is important that the organization maintains its initial reputation. At all costs, economies of scale should also work for the organization.
Beeton., & Humble, N. (2000). Mrs Beeton's book of household management. New York: Oxford University Press.
Grubbs-West, L. (2005). Lessons in loyalty: How Southwest Airlines does it : an insider's view. Dallas: CornerStone Leadership Institute.
Lauer, C. (2010). Southwest Airlines. Santa Barbara, CA: Greenwood.
National Institute for Occupational Safety and Health. (2000). Southwest Airlines Dallas Reservations Center, Grand Prairie, Texas. Atlanta, Ga.?: U.S. Dept. of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Institute for Occupational Safety and Health.
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