Using Hambrick and Fredrickson’s model, the analysis of Southwest airlines on 5 different elements of strategy is as follows:
Arena: Southwest airline focuses on market segments having good weather condition, less congested airports and having lesser direct competition with big players. It also aims for short flights - less than 500 miles and flights having only coach and gears towards bringing ground transportation customer. It finds the markets currently not served with nonstop service, point to point market, underserved market and those markets served by airlines having unfortunate service reputation or served by startup airlines.
Vehicles: SW airline uses single vendor to get new flight. To ensure a faster turnaround time, it purchase or leases the gates at secondary airport. It also has joint ventures with worldview system to increase its internet presence.
Differentiators: SW airline differentiate itself from the competitor by using newer technology at the tickets systems such as ticketless systems, which not only reduces cost but also significantly improves the customer service. SW airline has minimum delays or on time air transportation, very reliable flights, minimal accident history and less turnaround time - around 15-20 mins vs 55 mins of industry standard. Its staff is customer oriented and adopted fun filled attitude (Positively outrageous attitude) to establish a good image. It also tries to keep the ticket cost very low and even though it started to face some competition now in this space but it still has maintained its position via lower cost tickets.
Staging: SW airline has a “Go slow strategy” to acquire new market. SW management wants to ensure that ground work is completely done before launching the services in a targeted market. Even though the opportunity of expanding is exponential, management team first analyzes the markets on different factors such as ease of expansion, good weather condition and less competition.
Economic logic:...