Southwest Airlines Case

Southwest Airlines has dominated the airline industry due to their highly effective core competencies. As they move into the Atlanta market there is no doubt that Southwest will continue to epitomize the VRIO framework (valuable, rare, hard to imitate and organization focused), solidify their financial growth, and market advantage through the institution of their core competencies. "Southwest's low-fare, short-haul strategy spawned numerous imitators. According to the Allied Pilots Association, only two of 34 start-up airlines formed between 1978 and 1992 were successful, with success defined as surviving 10 years or longer without bankruptcy". Southwest is truly a rarity in the airline industry, and even though Delta Air Lines is an Atlanta staple they have had financial struggles in the past trying to compete in the low cost carrier market. "Delta Express was started in 1996, but was not successful and thus shut down in 2003 to make way for Song. As a direct competitor to JetBlue, Song only last three years before folding under a low-fare, high-cost structures that only increased Delta's debt." Of course, Delta will leverage their brand as the hometown carrier, and continue to compete fiercely, but the Atlanta market embraced AirTran and will progressively do the same for Southwest.

Southwest brings unparalleled "value" to their customers flying experience through providing no frills, low fares that are comparable to automobile travel, unique enjoyment driven flight service, and air travel without seat assignments to reflect the family bonding experience of a road trip. Additionally, Southwest is "organization focused" in the fact that they place such high value on their employees. By creating a family network internally it makes for a happier work environment which ultimately fosters a more enjoyable customer experience. Southwest Airlines is also "rare" in providing consistence low fares that only shift between peak and off peak seasons, quick gate turns ranging between 15 and 20 minutes and dependable on time service. Southwest Airlines biggest asset display's a focused organization that is valuable, hard to imitate, and rare. This asset is their point-to-point system for flight routes and scheduling practices. The point to point system streamlines the utilization of aircraft and terminal facilities, and has proven to be more cost-efficient than the hub-and-spoke system used by other airlines. This system in conjunction with their other core competencies is why they can provide the lowest fares industry wide and still have financial growth year after year.

Southwest low fare cost and no checked baggage fees are their best shot at gaining dominances over Delta. Delta has already adjusted their fares to compete with AirTran prices with moderate success, but due their past failures in this realm the confidence in their sustainability is not there, as they just

...