It defines the characteristics and situations of an organization which makes it more effective and efficient when compare with its competitors. It provides the way of looking at the relative equity and debt amount that has been using by company in order to finance the assets. Examining Southwest Airlines as a case study for customer service provides valuable implications for how other companies can provide a similar experience for their own customers. These are the factors that an organization lacks and does poorly in comparison to the organizations operating in the same market at the same level. Southwest Airlines Case 1. PESTLE analysis is one the significant and widely used tool or framework mostly by organizationswith the intent of considering the market environment before commencing the process of marketing. Leaders are recognized at all levels of the … Brief Summary of the case II. Vrio analysis for Southwest Airlines Value Chain Analysis case study identified the four main attributes which helps the organization to gain a competitive advantages. Employees are highly rewarded for being an example of positive attitude to customers; negative reinforcement or massive punishment are not appropriate methods of this company. In recent period, the problems statement  are widely used by the firms to allow the management execute the improvement process or identify the loopholes that are effecting the overall performance or profitability of the company. Equip “leaders,” regardless of what position they have. In the case of Southwest Airline, in terms of first class grades, the aircraft may be the business itself (Daft, 2008). Nonetheless, the analysis needs to be conjunction with other frameworks such as S-W-O-T analysis in order to get a more realistic picture. The movement in price are likely expressed in mentioned ratios and absolute dollar terms. Southwest Airlines Financial analysis is the assessment of the stability, viability as well as profitability of a sub-business, business or project. The option has to be realistic and should have imperative results on the organization. It is due to the fact that the organization needs to analyze exact factor in terms of its reversibility to see, if the process can be reversed, if the option fails to offer the respective results. Application of the Reinforcement Theory at Southwest AirlinesAccording to Daft and Lane (2008), reinforcement theory of motivation, proposed by Skinner, implies creation of such external company’s environment where the law of effect exists. Current debt to equity ratio: it is the mix if the debt of an organization. The Southwest Airlines VRIO analysis is basically the extension of the Southwest Airlines PESTEL analysis, which allows the oragnation to understand the resources, competitive edge, value proposition and its value in the market. Whenever Southwest Airlines enters a market, there is a direct correlation between cost reductions of current incumbents and Southwest. 704 Words 3 Pages. However there are certain limitation attached with it. Such factor analysis is important in order to avoid any resistance implementation and also save the resources and efforts. The political factors may involves environment regulations, employment laws, tariffs, tax policy, trade restrictions, political stability and reforms. However, the recent external and internal changes in the environment have led to the loss of its position. Maslow’s Theory of Hierarchy and its Application to Southwest Airlines According to Chapman (n.d. We Will Write a Custom Case Study SpecificallyFor You For Only $13.90/page! The case study highlights how Southwest Airlines adopts low cost coast to coast fares of $99. it only incorporates the aspects of the present day and only incorporate the events that took place within the short term period. It helps in determine the organizational and environmental factors that could affect the decision to be made. In fact, the analysis of the environment needs to feed all planning aspects as well as it should be continuous. Apart from this the size and the reputation of the companies that are already operating in the market also play an important. Professor Kohn Southwest Airlines Case Analysis What Does it Take to Make Money in the Business? A degree of profitability of an organization highly depends on the income statement reporting on the operations results of company. It is due to the fact that such analysis allow the organization to see, if the option will remain strong in future or not. The Southwest Airlines economic factors or forces involves interest rates, inflation, and growth of economy, cost of living, working hours, wage rate and exchange rates. Southwest Airlines Harvard Case Study Solution & Online Case Analysis. Such may include the supply chain efficiency, value chain maintenance, technology or other factors, that offer value to the company and in return allows the organization to offers similar value to the customer. In 1994, both United Airlines and Continental Airlines launched low-cost airlines-within-an-airline to compete with Southwest Airlines. Moreover, the mission of Southwest Airlines is “dedication of the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit” (Southwest Airlines, 1). hence ins uh cases, the direct problem is no the ultimate organization factors but the process implementation that is needed to e in lace, in order to bring change , avoiding the upcoming risk and hence sustaining the competitive edge in the market (Spradlin, 2012). Thus is important as to allow the organization. It is the process that is widely used for identifying the financial weaknesses and strengths of the corporations, this can be done by building the relationship between items of the profit & loss account and balance sheet. Such determination is important for the organization to expand in the market and continue its operations with sound profitability. The Barich, Inc., Research Team produced the following case study based on meeting notes received and the teleconference meeting held on November 19, 2018, between representatives of Southwest Airlines (Southwest) and Barich, Inc. Southwest provided input on the content of this case study to allow use of this information in ACRP WebResource 8. A good recommendation is that, incorporates the findings from the past. In case an organizationis decreasing fixed asset turnover so it means that the production has been running at lower than capacity. It is a situation that arises as a result of the changes that took place in the immediate or distant environment, preventing the organization from maintaining its existence and superiority in the growing competition and are disadvantageous for the organization. It significantly rely on the capabilities of the manager that how effectively it can prioritize and determine the most important element. The company’s management welcomes new extraordinary ideas, allows to experiment and to try new approaches to the service providing, demonstrating leadership skills (Smith, 2004). In addition, it offers clear view what are the factors that are valuable and inimitable o can be easily imitated in the long-term, thus preparing the organization to either use the valuable factor to delight the customer and develop a sustained competitive edge, or enhance its value and oragnation strengths to develop a strong competitive edge in the market, which is important to develop and maintain in order for the organization  to remain profitable and allow the maintenance of market share in the long-term (Hille, 2015). Not only this, it also indicates that an organization has a lot unproductive assets for instance inventory, receivables, equipment and plant for its current sales’ level. Success of Southwest Airlines and Motivated Workforce According to the Southwest Airlines report (2011), the nnumber of complaints per customer at Southwest Airlines is the lowest comparing to major U.S. carriers. ), the main five levels of Maslow’s needs include biological and physiological needs, safety needs, belongingness and love needs, esteem needs and self-actualization needs. Once the options are developed and evaluated, the recommendation is made, on the basis of the best suited option that offers the maximum value to the company and address the problem succinctly. Moreover, clarity of the Southwest Airlines problem statement is important to maintain, in order to avoid the misunderstanding between the shareholders and stakeholders. It is a condition existing in the external environment that allow the organization to take an advantage of the organizational strengths, and help in overcoming the weaknesses and to neutralize the threats present in the environment. Among the above factors, the reversibility factor carries high importance. The framework use a classic perfect market and relatively a static structure of market i.e. A strong Southwest Airlines recommendation must cover the key areas as how the organization will implement the alternatives, what benefits will it receive if it implement the when alternatives and what could be the cost, that he organization will need to overcome or address, in order to effectively implement the alternatives. SWOT analysis mainly have two dimensions internal and external dimensions. The author argued that the competition inside a company was perceived as a challenge to move forward, positive and creative attitude to work was a background and the driving force for company’s success. It is pointed in Southwest Airlines report (2011) that “living the Southwest way is to have a warrior spirit, a servant’s heart, and a fun-LUVing attitude”. Other airlines companies adjust the number of employees according to changing economic environment that is hiring during the economic growth and firing in the period of recession. After considering the major top problems, the business analysts or managers would then be able maximizing the shareholder’s wealth. The acronym Southwest Airlines SWOT stands for strength, weakness, threats and opportunities. The internal environment of an organization includes internal customers or staff, wages, office technology and finance etc. The credit policy of an organization last greater impact on the day’s receivables. Value drivers: in recent time, the approach that has been significantly gaining the increased recognition is identifying the key elements standing out as vital in shareholders value creation of the specific organization. Southwest Airlines Success : A Case Study Analysis Dr. Ashutosh Muduli Ms. Vinita Kaura ABSTRACT In this cut throat competitive era service firms may survive with innovative strategies with reference to people, process and physical evidence that differentiate their services from their competitors. The sales amount of an organization depicts the business size. Solvency:it is the ability of an organization paying off its liabilities or obligations to third parties or creditors in long term. It is a strategic planning framework that is commonly used to evaluate the organization, a plan, business or any other project. strength, weakness, opportunities and threats. In addition, the compatibility of the option is also analyzed, in order to understand if the given option is aligned and compatible with the procedures of the organization. Liquidity: it is the ability of an organization satisfying immediate obligations, maintaining positive cash flows and it most likely based on the balance sheet of company depicting the financial condition of organization. It can sound strange and uncommon, but at Southwest the employees are most important, and the customer possesses the second place. By continuing we’ll assume you board with our, Case 13 Southwest Airlines: How Herb Kelleher Led the Way, The marketing objective of Southwest Airlines, How to secure financing as a small business owner, How to Make a Business Plan for Any Business, 7 Crucial Macro Environment Factors to Include in Your Analysis, Macro Environment Examples in the Real World. Also it likely reveals about the organization’s expense. The analysis is supposed to be insufficient for the strategic planning objective, since it likely scans the externa environmental, whereas avoiding the competitive scenarios and internal environment. This company reinforces positive behaviour and rarely uses punishment, because even the unsuccessful efforts are perceived as attempts on the way to further improvement of the service quality, which is known by everyone who has ever flown with Southwest Airlines. In addition, the financial analysis helps companies in making the more informed decisions for the firm. The return on equity likely measures the profit amount that had generated by assets. the simple relationship between current stock market price and expected or current earnings per share is often quoted by both owners and management. In case of high current debt to equity ratio, it means that the company would be in problematic situation while paying its bills. Moreover, the recommendation also needs to entail the plan B, that if for instance the results are not generated as per the plan, the second set of recommendation must be incorporated in the plan, in order to allow the organization to quickly shift to the plan B, in order to avoid the losses and sustain the presence of the company in the market. ConclusionTo summarize the above mentioned, I would like to put an emphasis on the unique corporate culture of Southwest Airlines, where an employee is the most indispensable value for the company. High threat of substitute leads to low profitability as it limits the industry profits by placing a price ceiling due to the fear of being substituted by other product. The users of the financial statement are listed below; Significantly, creating the financial ratio add meanings to the accounting and financial data of the business. Apart from this while developing the option, it is important to consider the realistic nature of the option. Thus, the analysis of the financial statement is important mode of assessing the past performance as well as planning and forecasting the future performance. It can be a skill, a resource, image, market leadership, relation with buyer or supplier or any other advantage relative to its competitors that fulfill the needs of the market by providing the organization with a comparative advantage. The barriers can be both industrial and legal. The company’s consolidated operating revenues accounted for $15.7 billion in 2011, showing 39 consecutive years of profitability. Moreover, under the particular section, the decision criteria is also developed. Smith (2004) argued that the perception of the job as fun and as a possibility to be creative is a characteristic feature at Southwest Airlines. Acasestudy.com © 2007-2019 All rights reserved. Moreover, it also determines the Imitable factors. As for first level of needs, essential for each person such as food or shelter, it is guaranteed at Southwest Airlines by decent level of salaries and percent in gained profit (Smith, 2004). While developing The Alternative, the following factor are taken in account, in order to develop the best alternative that may resolve the problem effectively. Threats are the factors that prevent the organization from the actualization of an activity. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Southwest Airlines Porter five forces reflects the competitive environment of an industry. Operating return on total assets (ORTA): this matric most commonly provides better way of looking at the ability of the organization to generate profit returns from the principle or core activities since it does not involves other expenses including interest expenses not it includes marketable securities income, interest income or onetime extraordinary transaction. Such type of calculation needs very selective estimate or analysis of the variables and fixed cost or expenses of the company while taking into consideration the operating leverage effect. The particular section deals with the different ways the problem can be resolved. In this element of SWOT the abilities and the key properties of organization are discussed that gives an organization an advantage over other organizations by making it more competitive. I will analyze Southwest Airlines motivating strategies by applying Maslow’s theory of hierarchy of … The Company was incorporated in 1967 into Texas aeronautics commission. Within the industry the businesses profitability is dependent upon the following forces: The competition among the firms help in identifying the lucrativeness of an industry where companies are competing hard in order to maintain their power within the industry. It is a deficiency or limitation of resources, capabilities, skills that majorly affect the organizations effective performance. These factor includes the consideration of the following: The cost includes if the option proposed is cost effective or can be afforded easily by the company without effecting the overall profitability and other operations of the company. Moreover, the problem statement allow the management to trim down the symptoms of the problem an organization is facing and look on to the real problem that is causing the damage to any specific aspect of the company.
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