Operation Strategy Model

As the diagram above, it can be seen that the operation strategy is a functional strategy and it links with business strategy, corporate strategy and its environment. According to Schroeder, R (2008, p.p 20) operation strategy defines the business' purpose and scope that reach to expectation of those people who have power in the organization. Whereas, the business strategy mentions the way business in a particular market can competes successfully. Besides, the operation strategy or functional strategy focus on how each part of business delivery the corporate and business strategy. When putting those strategy in relation with each other, company can have deep knowledge and understand on what they want to be and how they can achieve it. Therefore, as the context of Southwest corporation, the writer recommend that they should use " Top – down strategy " . As mentioned by Slack, N., Chambers, S & Johnston, R ( p.p 79 ) this strategy view strategic decision at a number of levels. Taking Southwest airline as an example. For the Southwest the Corporation strategy will be " Provide high frequency, low fare service and make everyone satisfy ". They are not only make their customer satisfy, but also their employees. Everyone all know that " no customers, no business" but if company want to attract and gain more customer loyalty , they have to please the people who conduct and serve its product or service first. In order to compete this strategy, the suitable business strategy should be chosen carefully. Following to Treacy and Wiersema ( 1997, citied in Schroeder )there are three generic types of business strategy: customer intimacy as catering closely to every customer need, product leadership which owning the latest new product and operation excellence as being the lowest- cost producer. In the case of Southwest, they should apply operation excellence in order to delivery corporate strategy as well as inherit core competence that Southwest created before. In more detail, base on it operation strategy will distribute its work to reach this strategy. To begin with, operation manager should understand the life cycle of product and service first and then they will give suitable operation strategy that meet with each stage.

Through this model , Southwest is experiencing a maturity stage because the demand is go to stable but the market share still increase. Indeed, with 40 years of existence , the market share of Southwest is increasing. It counts for 80% to 90% market share of its top 100 city pair routes( as mentioned in Southwest airline 2004 annual report ) and on 2009 it was a national's largest carrier ( as mentioned in Southwest airline corporation annual report 2009). It points out that Southwest has good brand image and high reputation. Following to Slack , et al at this stage the operation is expected to get cost down to maintain