Southwest Airlines Strategy SWOT Analysis

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Southwest AirlinesAbstractThis paper provides a review of Southwest Airlines that focuses on the company’s organizational setting and how chapter concepts apply to the organization. The concepts included for analysis are service quality, lean management, supplier management, customer value, CRM, balanced scorecard, strategy map and process control. For each concept, a biblical perspective is also applied. The paper concludes with recommendations for what Southwest should do to enhance its operations in the coming fiscal year.IntroductionSouthwest Airlines provides flight service in the regional Southwest of the United States. It was envisioned as a faith-based company by founder Herb Kelleher, dedicated to servant leadership (Baqai, 2020). It is a low-cost provider, which is what has allowed it to penetrate a highly competitive market dominated by major airlines such as Delta and United. Southwest’s blend of friendly service and no-frills flying helped it to become a major regional player. This paper describes Southwest Airline’s organizational setting and integrates chapter concepts from Meredith and Shafer (2016) to explain how Southwest approaches supply chain management in its own unique way. Finally, it concludes with recommendations for the organization.Organizational SettingThe mission statement of Southwest Airlines is that the organization focuses on providing “dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit” (Southwest, 2018). As an airline, Southwest provides flight services. As a regional carrier, it focuses only on the Southwest portion of the US. Southwest has its own unique American culture and values, where faith-based services can thrive (Talmage, Figueroa & Wolfersteig, 2018). The customers in this region tend to value quality service, friendliness and honesty; they also value the no-frills services that Southwest provides in order to keep airline costs as cheap as possible (Roberts & Griffith, 2019). Southwest values internal and external customers equally and sees them both as the same: internal customers want to be treated well just as much as external customers do—and that has been at the heart of Herb Kelleher’s vision for Southwest from day one (Cote, 2018). Internal customers are the front-line workers (staff handling customers at gates, handling luggage, tending to staff on aircraft) and behind the scenes managing activities and supplies. External customers are the clients using Southwest’s flight services.The aim of Southwest Airlines is to treat its employees the same way it wants its customers to be treated; this represents a type of “pay it forward” mission, where the organization aims to make workers feel great about being part of the Southwest family in hopes of those workers turning around and making customers feel great about flying Southwest. This mission is reflected in the statement: “Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer” (Srinivasan, 2014).The value I add to the organization by helping it achieve its mission is that I enhance the relationships and connections between people in the supply chain, ensuring that everyone feels respected, trusted, and capable of producing. Ethical conduct is important to Southwest’s management of its supply chain, and my focus is on adherence to that ethical framework. Southwest has a triple bottom line of Performance, Planet and People—and making sure all three are reached through supply change management is vital. That is why Southwest (2020) states: “Working with our suppliers is an important part of being a good corporate citizen. We partner with our suppliers not only because of the impact they have on the products and equipment we use in the skies, on the ground, and in our offices.”The role Christianity currently plays in this organization is that Christian values are built-in to the organization’s structure through its “pay it forward” culture and the servant leadership style that the organization fosters (Kgatle, 2018). Ultimately, Southwest aims to promote leave and peace; its ticker symbol reflects this aim, as it is LUV. To achieve this aim, the organization fosters respect for all people. That is why its Supplier Diversity Program looks to develop sustainable relationships with diverse suppliers that are: Small, Small Disadvantaged, Women-owned, HUBZone, Veteran-owned, Service-Disabled Veteran-owned, Minority-owned, Disabled-owned, and LGBT-owned (Southwest, 2020). By being inclusive and open to disadvantaged suppliers, Southwest wants to bring everyone together into one large family of operations, where love, peace and friendship characterize the environment.Integration of Chapter Concepts to the Organizational SettingControlling Service QualityControlling service quality is important for any organization looking to maintain brand value and equity among consumers. As Chen, Li and Liu (2019) point out, airline service quality directly impacts the extent to which customers return to repurchase tickets from the airline the next time they have to fly. For that reason, it is important for Southwest to control for service quality in order to meet its Triple Bottom Line. One great way to control for service quality is to use customer feedback surveys (Meredith & Shafer, 2016).What needs to be done in order to successfully implement service quality controls into Southwest is a way to monitor and evaluate service. The benefits of this are that Southwest can ensure that its performance is commensurate with its customer service; and since Southwest places customer service first and foremost in its mission, it follows that the organization should evaluate customer feedback to make sure service is where it needs to be. That is why Southwest should utilize customer surveys in its operations routinely. As Meredith and Shafer (2016) note, training employees in standardized services is important to succeeding at controlling for service quality as well. The best way to control is to pay attention to the quality provided—and the best source for information on that is the customer himself.Biblical JustificationThe Biblical motivation for this approach is found in Ephesians 6:7-8:  “Serve wholeheartedly, as if you were serving the Lord, not people, because you know that the Lord will reward each one for whatever good they do, whether they are slave or free.” Good works are a reward in and of themselves. That is the culture Southwest seeks to promote.Customer ValueCustomer value is very important in business, as customers are most likely to purchase that which they perceive to offer them the most value (Payne, Frow & Eggert, 2019). The key to enhance the perception of beneficial value is to focus on innovativeness, functionality, quality, customization, and responsiveness (Meredith & Shafer, 2016). The benefit of emphasizing customer value is that it helps the organization to build brand equity and loyalty.This applies to Southwest in a big way because Southwest started out as a low-cost provider, an alternative to the major airlines that charged more expensive prices to fly people to their destinations. The major airlines could justify their prices because they provided passengers with extra perks and services, such as on-flight snacks and state of the art aircraft that could enhance their comfort while traveling. However, Southwest realized that it could corner a regional market by targeting a specific type of flier—one that makes short flights and one that does not need all the extra frills while flying. Such a flier would be willing to take a flight with Southwest at a lower cost. The value that Southwest offered was functionality, and it made up for the lack perks on-board by providing great customer service. Every worker at Southwest had the goal of making every customer feel amazing. Thus, quality and customization were the new perks that Southwest provided to replace the standard industry perks that the major airlines traditionally provided.Today, there are other low-cost providers entering the market, like Frontier. Thus, Southwest needs to find a way to differentiate itself so that it can continue to provide customers with customer value. Innovativeness is where Southwest could shine in this respect, so long as it manages to continue to put its customers first.Biblical JustificationThe Biblical justification for this is found in 1 Peter 4:10: “Each of you should use whatever gift you have received to serve others, as faithful stewards of God’s grace in its various forms.” There are many talented people in Southwest. The key to company’s success is to tap that potential through innovative leadership and allow new ideas about how best to serve the public come out to the fore.Lean ManagementLean Management is an approach that focuses on optimizing resources to enhance customer value by eliminating waste in the production process, emphasizing the need for continuous improvement, and demonstrating respect for people so that teamwork and growth are natural outcomes in the workplace (Miao, Qian & Humphrey, 2019). Lean management focuses on teamwork with the goal being to serve the customer, but it also focuses on respect for people, which is what allows it to support the main idea of Maslow’s model of the hierarchy of needs (Allen, Munoz & De Dios Ortuzar, 2019). One of the core aspects of Maslow’s theory is that people need to feel that they are valued. Thus, in lean management there is the underlying sense that an organization has to know how to properly value its stakeholders and show them their appreciation. This combination of respect for others and constant improvement so as to satisfy the customer by creating customer value through the eradication of wasteful practices in the production process is what serves as the foundation of the lean management theory approach (Miao et al., 2019). Entrepreneurs turn to this approach because of its hybrid nature that satisfies both workers and customers (Miao et al., 2019).There are numerous benefits to lean management, such as the elimination of waste and the focus of time and energy on efficiency (Ruiz-Benitez, Lopez & Real, 2019). However, because of supply chain disruptions due to COVID lockdowns in 2020, many organizations are rethinking how they approach lean management. This is where it matters to Southwest: Southwest needs to eliminate waste in the value system and provide low-cost service without compromising on the great quality of customer service it has been known for. One way to do this is cut out even more costs that providers identify as important. This could enable Southwest to tighten its supply chain even more while losing nothing compared to what competitors offer just to appeal to luxury type clients. Southwest knows its target customer and can afford to tighten the belt when the global supply chain freezes up.Biblical JustificationThe Biblical verse that best supports this approach is Hebrews 13:5-6: “Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you; never will I forsake you.” So we say with confidence, “The Lord is my helper; I will not be afraid. What can mere mortals do to me?” When an organization trusts in God, it will not fall to the various temptations and dangers that afflict those who are unfaithful.

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Supplier ManagementStill Southwest needs to be able to address supplier issues and that is where supplier management concept comes into play. Supplier management is the idea that an organization needs to select good suppliers, develop relationships with them, and certify and audit suppliers that it is currently working with (Meredith & Shafer, 2016). One way in which supplier management is changing is in the introduction of blockchain development (Saberi, Kouhizadeh, Sarkis & Shen, 2019). As Saberi et al. (2019) point out, “blockchain technology, as a distributed digital ledger technology which ensurestransparency, traceability, and security, is showing promise for easing some global supply” constraints (p. 2118). Southwest could benefit from using blockchain technology when managing its supply chain because of the benefits it brings to the process of managing.Security, transparency and traceability could all enhance Southwest’s supply chain, especially as it seeks to form relationships with small suppliers so as to be inclusive and to meet its supply chain mission objectives. One of the problems with working with small suppliers is that it is difficult to ensure transparency and build trust. That is where blockchain technology can come into play. Because Southwest wants to develop sustainable relationships with suppliers that other major organizations do not work with, Southwest needs a dependable technological solution that will enable it to monitor and trace all supply chains. The solution is clearly to incorporate blockchain technology into its supply chain management process.Biblical JustificationThe Biblical support this idea is found in Galatians 6:2, which states, "Carry each other’s burdens, and in this way you will fulfill the law of Christ." Blockchain is the technology that facilitates openness, which allows everyone to see what is going on. To support one another, openness is essential. A supply chain relationship cannot exist without it, and blockchain can definitely enhance Southwest’s approach.Customer Relationship Management (CRM)Customer relationship management is vital in an organization like Southwest because it is really what keeps the company going strong. CRM is the notion of making sure all customers’ needs are met through direct observance and interaction with them. A good CRM system will ensure that an organization is able to monitor customer engagement. To that end, social media can greatly help. Social media plays an increasingly important role in CRM (Harrigan, Miles, Fang & Roy, 2020). The reason for this is that more and more people have turned to social media for all their information needs. Social media allows an organization to track all interactions and see directly how customers are engaging with the organization online and whether the feedback is strong or if there are needs that still need to be met.CRM systems can incorporate social media observance into the approach, which is what Southwest should do. The benefit here is that the organization will be able to engage directly with customers. The company can do this by having a social media team involved in CRM management, developing a system that incorporates work with social media influencers, sites like Yelp and Instagram to build user-generated content that gets meaningful interactions.Biblical JustificationThe Biblical basis for this approach is 1 Thessalonians 5:11: “Encourage one another and build one another up.” CRM systems that use social media to manage customer engagement and needs satisfaction can do exactly that. This is a way to build people up using modern technology and communication modes.Balanced ScorecardThe purpose of the balanced scorecard is to provide an organization with a range of measures it can use to obtain a comprehensive view of the organization and its performance (Meredith & Shafter, 2016). The benefits of the balanced scorecard are that it provides the organization with a way to communicate strategy throughout the organization’s departments. It can facilitate alignment between departments and ensure that strategic objectives are linked. For Southwest, the benefits would be that it enables the organization to obtain feedback from internal customers, who are so vital to the essential mission of the organization, which is to ensure that all customers are satisfied with the quality of service that the organization offers. Customer satisfaction can be measured using the balanced scorecard and this can help an organization to know the extent to which it is achieving goals related to this issue (Al-Omari, Alomari & Aljawarneh, 2020).For Southwest to implement a balanced scorecard in a meaningful way it would need to conduct an analysis of its profit and revenue stream, look at its internal business process perspective, engage with the customer perspective, and develop a learning and growth perspective. It measure performance in these areas by looking at fleet growth, revenue, renewable energy commitments, flights booked, customer satisfaction score, and the number of flights daily. All of this will enable Southwest to have a better understanding of where it is meeting objectives and how integrated the various aspects of its business strategy are.Biblical JustificationThe Biblical justification for this approach can be seen in Proverbs 3:13-14: “Blessed are those who find wisdom, those who gain understanding, for she is more profitable than silver and yields better returns than gold.” This means that by gaining in understanding of its own actions and having insight into its metrics, the organization will become even more knowledgeable about how to profit than if it had stumbled upon a bucket of gold. For true knowledge of the self yields substantial returns, and that is the point of the balanced scorecard.Strategy MapThe strategy map is another way to understand cause-and-effect relationships within an organization (Meredith & Shafter, 2016). It focuses on four key areas: finances, customers, internal business, and how the organization is learning and growing. The strategy map should be directed by a goal that serves as the overall aim. The strategy map then explains the causes and effects that will enable the organization to achieve the goal (Cokins, 2020). The benefits of the strategy map are that it allows managers to have a way to track each item using measures. Ultimately, the map is a way to test a hypothesis. The hypothesis is stated in the cause-and-effect relationship. If the company does x then y should occur. The implementation of the map is a way to see if that holds true.Southwest could do this by again looking at the same conditions that apply in the balanced scorecard and developing a hypothesis for how to achieve a goal. The goal for Southwest should be to increase revenue in the face of other low-cost competitors coming into the market. How can it do that? It has a brand it can leverage using CRM. Getting influencers to work for Southwest should be instrumental. The strategy map is there to test the hypothesis.Biblical JustificationThe Biblical basis for this approach can be found in James 1:2-4: “My brethren, count it all joy when you fall into various trials, knowing that the testing of your faith produces patience. But let patience have its perfect work, that you may be perfect and complete, lacking nothing.” The key to these verses is that one should rejoice in testing oneself, and the same goes for an organization. An organization needs to grow, just like a person—but to grow well it must face trials and tests—and the strategy map is a great way to conduct a trial for one’s organization.Process ControlThe idea of process control is important because it is the notion of bringing the plan and the reality into alignment so that they are the same and there is no discrepancy between them in any of the processes of the organization. The key to process control is that action must be taken to bring about this alignment when it is found to be lacking. So it makes no difference if a company uses all the metrics and measures it wants if it does not take action based on the data. Process control ensures that the process complies with the objective. It can be part of a total quality management process (Altuntas, Dereli & Kaya, 2020).The benefits of process control are that it provides flexibility to the organization and it is a cost-effective way of controlling value (Meredith & Shafter, 2016). It is a timely way to control processes, and it can be conducted using statistical analysis. For Southwest, process control should be implemented to bring the plan of growth into alignment with reality. It can do this by using the metrics involving customer relations and correlate that with flights booked per day to see how well customer service is translating into sales. If it is found that the relationship no longer holds true, then Southwest may need to rethink its vision and update it for the 21st century.Biblical JustificationThe Biblical basis for process control is found in Colossians 1:10: “So that you will walk in a manner worthy of the Lord, to please Him in all respects, bearing fruit in every good work and increasing in the knowledge of God.” The idea here is that one should live to achieve great goals because God has given many gifts. The same is true for the organization that wants to achieve great things. It should pursue these goals in truth and with perseverance and resolve.ConclusionMajor recommendations for Southwest are for the organization to use customer surveys to identify what stakeholders need. This will help it create better customer value. It can use lean management to eliminate waste and enhance customer value as well. It should also consider blockchain technology for supply management, as it works with many small suppliers and it would help to build relationships to have more transparency in these interactions. Customer relationship management, a balanced scorecard, a strategy map, and process control are all other areas where Southwest should focus. The main takeaway here is that Southwest can maintain its lead in the industry if it continues to focus on differentiating itself and growing and learning from analysis......

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