Southwest Breif

Yes, Southwest can resume its 14% growth rate per annum. They should stick to their strategy which is cost leadership and differentiation. Even though 99/11 had its worst impact on Airline industry. The Southwest had its differentiated strategic position in the market. Reasons why they will be able to resume their growth rate are

i) Employees Engagement ii) Southwest effect iii) loyal customer base

Can southwest resume its 14% p.a. Growth rate?

Southwest gives priority to their employees. Because happy employees will serve customers happy. Thus customers will be satisfied. Through this employees engagement they are able to run their effective and strict schedule. That’s the reason southwest employees boarded 509 passenger per employee which is highest in the industry.

After 9/11 many companies lay-off their employees. But southwest had 0% lay-off. That gave confidence to the employees that company do care for them. As research show that in crisis lay-off doesn’t mean cost will be reduced. This had a long term effect on the companies. As other airlines who adopted lay-off strategy suffered losses but southwest in spite of 0% lay-off still enjoyed profits every quarter. The reason is employees which feels love to their job. They are trained and got an environment like they will do whatever is requirement of the situation. Even a pilot can do a stewards work if required. This gives southwest an edge on its competitors.

The other reason is southwest effect. A customer once fly with them inspires a lot. They have made boring flight a love thing. They engage their passengers in humorous and interesting activities so the customer will remember their journey.

Southwest have loyal customer base. Even though other airlines like continental lite try to converge with southwest but they failed. Because southwest have its differentiated position and customers are more