Southwest Case Anylasis

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Case Study: Southwest Airlines

Columbia Southern University

Leonard Simmons

15 September 2015

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        The key to any business is the ability to have a strong business model. What drives your organization to make the choices it does. In the case of Southwest airlines their business model is fairly simple “KISS”. I am not referencing the great rock band but the ideal of “Keep It Simple Stupid”.  Margaret Rouse (2005), defines KISS as the idea that individuals want items that are simple or easy to use or understand. Moreover, companies that provide services should simplify or streamline to shorten times and reduce cost. Southwest airlines while coping the business model of Pacific West Airlines, has kept their business model simple. Focusing on these three components, commuter benefits, low airfares and efficient operations. In doing so it has led to Southwest being known as one of the best airline companies in the entire industry (Investopedia, 2015).

        Southwest is able to focus operations by having only one type of aircraft, reducing need for various replacement parts and additional training of staff. It has provide a focus on customer service by reducing frills (business class, first class or meals) but maintain simple extras (snacks and limited drinks) at no charges. Thus also keeping down on the ticket prices (Investopedia, 2015). Additionally the business model is geared at growing internally and demonstrating a commitment to its employees (Kerin & Peterson, 2013). This commitment to its employees builds on the idea that a happy staff will work hard and be vested in the company and its performance. This idea also aligns with their company’s mission, vison and values of providing direct flights to destinations, at an affordable rate while having fun (Kerin & Peterson, 2013).

        As Southwest proved to be a force to reckon with in the airline business, competitors tried to take away customers by proving similar routes and discounted fares. Specifically, Continental Airlines with their Continental Lite program and United Airlines with Shuttle by

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United.  However over the long term both of these competitors failed to maintain a foothold in the commuter routes, low airfare, and efficient operation marketplace. While Shuttle by United had reached in to the marketplace, it quickly had to increase cost to stay afloat and even eliminate certain routes, eventually mothballing the whole program (Kerin & Peterson, 2013). Eventually even Continental Lite, withdraw from direct competition with Southwest. Southwest had established itself and maintained its dominance by meeting the basic demands of their customers and focusing on creating better customer service and if needed lower cost to sustain operations when completion had risen (Kerin & Peterson, 2013).