Southwest Airlines
1. How would you characterize the business model of Southwest Airlines? How does this differ from the business model used at many other airlines, such as United and American Airlines?
The business model that Southwest airline uses can be characterize as "keep it simple" that are they don't fly everywhere they employ a point to point route system, no seating class distinctions, no choices on type of aircraft and simplest pricing structure.
Southwest Airlines flies point to point which a lot differ from other operators like American Airlines and United Airlines that they route passengers through hubs. Southwest also uses one type of plane that is the Boeing 737 to reduce training costs, maintenance cost and inventory cost while increasing efficiency in crews and flight scheduling. Southwest operation is almost ticketless with no seat assignment that helps reduce cost and back office accounting functions. There are no meals or movies in flight and the airlines will not transfer baggage to other airlines which reduce the cost on baggage handlers. Southwest is economize on amount of time it takes terminal personnel to check passengers in and on-load passengers and also their operating cost is lower than its rivals hence they are able to offer a lower fare compare to the competitors.
2. Identify the resources, capabilities and distinctive competencies of Southwest Airlines.
The resources are about the capital or financial, physical, social or human, technological, and organizational factor endowments. For Southwest airline, their resource is their employees since they devoted enormous attention to people they hired. On average the company hires only 3 percent of the interview in a year also they emphasize teamwork and attitude. They believe that the skills can be taught but a positive attitude and a willingness to pitch in cannot.
The Capabilities are the company’s skills at coordinating and using their resources. Southwest management creates incentive for
The business model that Southwest airline uses can be characterize as "keep it simple" that are they don't fly everywhere they employ a point to point route system, no seating class distinctions, no choices on type of aircraft and simplest pricing structure.
Southwest Airlines flies point to point which a lot differ from other operators like American Airlines and United Airlines that they route passengers through hubs. Southwest also uses one type of plane that is the Boeing 737 to reduce training costs, maintenance cost and inventory cost while increasing efficiency in crews and flight scheduling. Southwest operation is almost ticketless with no seat assignment that helps reduce cost and back office accounting functions. There are no meals or movies in flight and the airlines will not transfer baggage to other airlines which reduce the cost on baggage handlers. Southwest is economize on amount of time it takes terminal personnel to check passengers in and on-load passengers and also their operating cost is lower than its rivals hence they are able to offer a lower fare compare to the competitors.
2. Identify the resources, capabilities and distinctive competencies of Southwest Airlines.
The resources are about the capital or financial, physical, social or human, technological, and organizational factor endowments. For Southwest airline, their resource is their employees since they devoted enormous attention to people they hired. On average the company hires only 3 percent of the interview in a year also they emphasize teamwork and attitude. They believe that the skills can be taught but a positive attitude and a willingness to pitch in cannot.
The Capabilities are the company’s skills at coordinating and using their resources. Southwest management creates incentive for