Strategic Management - Southwest airlines Term Paper

Strategic Management - Southwest airlines - Term Paper ExampleThe companys success rests on the aboriginal pillars of value creation for its customers as comfortably as employees. Of the entire strategic circumspection, Southwest Airlines key role in strategic tender-hearted resource management has been an integral part. The company uses the words LUV and FUN to describe its relationship with employees as well as the deeper culture of the organization. Southwest believes in endowing employees with racy respect as well as providing them with an environment that best supports their willingness to work. The companys low turnover rates and racy levels of productivity are indicators of its success. another(prenominal) significant aspect of the companys strong strategic position is its management of organizations capabilities and resources. In this process, part of the value that is created for employees is translated into value admittance for the shareholders and customers. Southwe sts source of competitive advantage lies in its delivery of value for money which is a combination of low operational costs and topping levels of customer satisfaction and service. The company, hence, is a model of generation of value through people as suggested by Porter in his studies. Hence, the notion of strategic management at Southwest has been a product of several factors which are best explained as a cycle of events. Firstly, the company succeeds at value creation for its workers which translates to high levels of motivation. Secondly, the company uses the motivation produced by this in order to implement processes that reduce cost and nurture service. Third, the company succeeds at capturing value by offering some(prenominal) low cost and high levels of customer service better than its competitors.... Secondly, the company uses the motivation produced by this in order to implement processes that reduce cost and enhance service (Hallowell, 1996). Third, the company succee ds at capturing value by offering both low cost and high levels of customer service better than its competitors (Hallowell, 1996). The competitors of Southwest cast off been traditionally associated with hub and spoke networks that enhanced barriers to entry in the 1980s along with advanced customer relationship management via segmentation and computerized systems (Hallowell, 1996). Research has suggested that mere contestability is not a sufficient condition for strategic management of airlines (Bailey, Graham, & Kaplan, 1986). Contestability is basically the failure of an airline to remain competitive at a particular route just now because there are no barriers to entry and its competitors can easily enter the route to capture the profits (Bailey, Graham, & Kaplan, 1986). The case of Southwest demonstrates that clearly the company unavoidable a lot more than mere contestability in order to sustain its strategic advantage over the years. This leads to the premise that the high m otivational levels of employees made a crucial role in the strategic management initiatives at Southwest. The companys core target was to offer airline services at the net possible costs, even if that means competition with automobiles. The target customer of Southwest is typically a customer who wants warm, co operative staff as well as superior interaction, response all at a low fare. The aim is, therefore, to offer more for little money rather than less for less money. This has clearly differentiated Southwest from its