Southwest Airlines: Culture, Values, and Operating Practices
Evaluation of the company's position and strategy:
Southwest Airlines is one of the air-travel industry's great success stories. For most companies, such rapid growth will cause problems: legions of frontline employees taking up the mantle of decision making from core executives and, inevitably, stumbling. A clear and precise strategic principle can help counteract this shortage of experience. In Southwest's case, employees have consistently made trade-offs in keeping with the company's strategic principle.
There is nothing the competitors do not know. They certainly understand the technology, cost structures, and route planning of Southwest. They even have the same equipment, locations, and marketing muscle. Yet, Southwest's competitors have been unable to imitate its success.
Building Strategic Principle & Business Strategy
Southwest has distilled its strategy into a phrase and have used it to drive consistent strategic action throughout its organizations, "Meet customers' short-haul travel needs at fares competitive with the cost of automobile travel". A strategic principle, as the distillation of a company's strategy, has guided Southwest's allocation of scarce resources-capital, time, management's attention, labor, and brand-in order to build sustainable competitive advantages.
The strategic principle's power is its ability to help companies maintain strategic focus while fostering the flexibility among employees that permits innovation and a rapid response to opportunities. From the beginning to the present, Southwest has maintained the same strategy and operating style. It concentrates on flying to airport ...