SWA Case
What is SWA’s competitive strategy? What does it take to execute the competitive strategy?
Cost Leadership is SWA’s competitive strategy, which means it aims to become the low-costs leader among the airline industry. In order to execute this competitive strategy, it focuses on utilization and employees’ salaries, as well as simplicity on customer service.
For utilization, SWA could save the maintenance and training costs by owning one type of aircraft, 737s. It operates efficiently by selecting underutilized airport. Also, it emphasizes on point-to-point routes with no central hub so as to avoid the delays caused by connecting flights. In addition, the aircraft turnaround time is 15 minutes facilitated by crews from different positions which gives a higher frequency of flights. The gate is only managed by an agent and six or fewer ground crews. For salaries, employees are paid lower, but work more hours than those in other airlines. Therefore, SWA has utilized its aircrafts, employees and airports to lower the costs in operations.
For customer service, SWA keeps its fare, in-flight services and frequent flyer club simple. For example, passengers are only served with beverages and the club is tracked based on the number of trips flown which could eliminate the costs in keeping track of the mileages. Therefore, these approaches could economize and lower its operating costs.
Analyze SWA’s human resource management system. How does this system link to the execution of its competitive strategy?
As SWA considered people as the competitive advantage, its People Department has developed a system and put great effort on the potential and existing employees. There are 3 components in SWA’s human resource management system, including Recruiting, Training, as well as Pay and Rewards. As for the hiring practices at SWA, the focus is to identify the traits that comprise effective performance and behavior, especially teamwork and positive attitude by different
Cost Leadership is SWA’s competitive strategy, which means it aims to become the low-costs leader among the airline industry. In order to execute this competitive strategy, it focuses on utilization and employees’ salaries, as well as simplicity on customer service.
For utilization, SWA could save the maintenance and training costs by owning one type of aircraft, 737s. It operates efficiently by selecting underutilized airport. Also, it emphasizes on point-to-point routes with no central hub so as to avoid the delays caused by connecting flights. In addition, the aircraft turnaround time is 15 minutes facilitated by crews from different positions which gives a higher frequency of flights. The gate is only managed by an agent and six or fewer ground crews. For salaries, employees are paid lower, but work more hours than those in other airlines. Therefore, SWA has utilized its aircrafts, employees and airports to lower the costs in operations.
For customer service, SWA keeps its fare, in-flight services and frequent flyer club simple. For example, passengers are only served with beverages and the club is tracked based on the number of trips flown which could eliminate the costs in keeping track of the mileages. Therefore, these approaches could economize and lower its operating costs.
Analyze SWA’s human resource management system. How does this system link to the execution of its competitive strategy?
As SWA considered people as the competitive advantage, its People Department has developed a system and put great effort on the potential and existing employees. There are 3 components in SWA’s human resource management system, including Recruiting, Training, as well as Pay and Rewards. As for the hiring practices at SWA, the focus is to identify the traits that comprise effective performance and behavior, especially teamwork and positive attitude by different