Southwest 2012

Southwest is a Texas based airline company which strategy consists on offering low fares by minimizing operation cost.

Brief History

The company started in the 1970’s. The strategy was geared to attract customers by providing services no other airline offered. They offered charter flights between Houston, and Dallas at the lowest possible cost. They understood that it was more profitable to have a higher volume of passengers than to charge higher prices per ticket. They also created a marketing strategy consisting on having flight attendants dressed with short pants and boots and they offered free alcohol beverages all day, all flights to passengers.

Soon other airlines feared the competition and try to stop Southwest but they managed to overcome the obstacles and become a successful organization. Thompson, A . Gamble, J . Southwest Airlines in 2010: Culture, Values, and Operating Practices*.

Human Capital utilization

When it comes to utilizing human capital they had two ways to address it. One was geared towards clients the other one was geared towards employees. Gary Kelly CEO on 2004 saw four factors as key to Southwest’s recipe for success: hire great people and treat them like family, care for customers, keep fare and operating cost as low as possible without sacrificing safety, and stay prepare for bad times with a strong balance sheet, cash and stout fuel hedge. Thompson, A . Gamble, J . Southwest Airlines in 2010: Culture, Values, and Operating Practices*

On the first part of their strategy they were always paying attention to their clients and designing their operations to cater to them. They offered more flights, charged less for evening flights , offered free alcoholic beverages in flights, flying into airports that were closed to downtown areas ( this was very convenient for those traveling for business purposes), and also developing a rewards programs with offers that could be redeemed immediately with less block out times. Their strategy also included a marketing campaign that created the image of being a fun loving company that was always on time.

When it came to staff they choose motivated people that were client oriented, smile, good sense of humor, and people oriented. It is important for the company to hire employees that are going to be able to provide the best quality services to the clients. They did not use a personally test to screen candidates but great attention was given to the candidates personality.

The company developed the Southwest University to trained employees not only on FAA regulations but also on safety, communications, stress management, performance appraisal, -leadership skills, employee relations, and other topics. Managers were trained to provide coaching, empowering and encouraging employees rather that concentrate on enforcing rules. The company