S. However, globalization has impacted on the global travel culture, making airline travel more popular and increasingly seen as a normal model of travel, rather than remaining an uncommon mode, which was the case 30-40 years ago (Belobaba, Odoni, & Barnhart, 2009)
This commitment towards employees demonstrates the importance of the employment relationship, and supports the source of differentiation in terms of corporate culture and experience provided for passengers. It also helps to enhance the overall employment relationship, the commitments towards meeting the needs of individuals, equality, and providing an outward demonstration of appreciation for employees, all of which are aligned with the human relations school of thought associated with higher levels of motivation and staff performance (Buchanan & Huczynski, 2010)
Technology has, and continues, to have a significant impact on the airline. As Southwest has adopted the low cost carrier strategy, one of the underlying approaches has been to ensure that operating costs are controlled and value is created in the underlying systems (Gittell, 2005)
The airline has grown, but in recent years the airline industry has seen significant constraints on growth due to the maturity of the industry in the U.S. along with the economic influences constraining growth (IATA, 2014)
The airline has grown, but in recent years the airline industry has seen significant constraints on growth due to the maturity of the industry in the U.S. along with the economic influences constraining growth (IATA, 2014)
3.1 Application of the I/O Model The I/O model operates under the assumption that to gain superior profits a firm needs to examine the industry influences, looking to forces outside the organization, and leverage that information to identify suitable strategic choices (Lieberman & Asaba, 2006)
However, technology can also be seen as a constraint, especially as the firm outgrows it or the technology becomes dated; costly upgrades may be required to facilitate the growth; this was seen with the booking system, which was unable to cope with international bookings. With the acquisition of AirTran and the decision to expand with international flights, the former Amadeus system was insufficient, and the firm has had to invest in an upgrade (Maxon, 2014; Carey, 2014)
Marketing has also benefited from technology, with the use of the 'Ding' program, a small application that potential passengers could install, so they would be notified with a pop up screen when special fares were released (Southwest, 2014). Technology also plays an important role in the operations, it has recently been reported that the cockpit software in Southwest aircraft is being upgraded, which will create smoother landings for passengers and increase fuel efficiency (McCartney, 2014)
Business An Examination of Southwest Airlines Globalization and Technology Improving Returns Application of the I/O Model Application of the RBV Model Mission and Vision Statement Stakeholder Influences Southwest Airlines has been one of the aviation industry's success stories; founded in 1967 the airline pioneered the low cost carrier model, and grew organically leveraging a first mover advantage (Morrison, 2001)
The airline now operates approximately 3,600 flights every day, employees 45,009 staff and with the acquisition of AirTran in 2011 it became the largest domestic U.S. carrier (Southwest Airlines, 2014)
The political uncertainty in Eastern Europe, and the Middle East, is also heading a potential impact on demand, as well as operations. Fewer passengers are likely to travel to areas where there is political unrest, and airlines are increasingly diverting their aircraft away from aviation routes which fly over conflict areas, an issue which has come to the fore following the downing of the Malaysia airlines flight over the Ukraine in July 2014 (Walker, Salem, & Luhn, 2014)
Threat of New Entrants The airline industry has a number of barriers to entry and exit which may constrain the potential for new competition. The high capital requirements may be partly overcome by the easy aviablety of lease aircraft, but the limited availability of take off and landing slots at peak times at the popular airports and the bureaucratic requirements for licenses reduce the potential threat of new entrants (Belobaba, Odoni, & Bamhart, 2009)
The founders; Rollin King and Herb Kelleher, developed the idea of a low cost carrier and the airline airlines gained the first mover advantage when the inaugural flight took place in 1971. The airline has been very successful and following the acquisition of AirTran in 2011, the company is now the largest domestic carrier and the world's largest low cost carrier (Southwest Airlines, 2014)
The high capital requirements may be partly overcome by the easy aviablety of lease aircraft, but the limited availability of take off and landing slots at peak times at the popular airports and the bureaucratic requirements for licenses reduce the potential threat of new entrants (Belobaba, Odoni, & Bamhart, 2009). With the industry having a reputation for high overheads and low profits, it may also be argued to be an unattractive industry (The Economist, 2014)
airline industry had an average load factor of 84.1%, carrying a total of 649 million passengers (Transtats, 2014)
" The process of designing and integrating a new vision statement within a corporate hierarchy can often become convoluted, as competitive division managers with opposing worldviews struggle to shape the vision statement according to their own professional image. As observed by Southwest CEO Gary Kelly, "Southwest is a great place to work and brings the greatest joy because we have such meaningful purpose & #8230; (so) a purpose should answer the question, 'Why do we exist?'" (Gallo 1), which is why he decided to further clarify the company's corporate culture with a purpose statement as well
Airways shareholders & #8230; in an unusual step for a company emerging from bankruptcy, American's former shareholders got 0.0665 share of AAL stock for each of their former shares of AMR, giving them just over 3% of the company" (Isidore and Wallace 1)
0665 share of AAL stock for each of their former shares of AMR, giving them just over 3% of the company" (Isidore and Wallace 1). Meanwhile, Kelly has shepherded Southwest Airlines through the financial fray, as "in 2009 Southwest had its 37th consecutive year of pro-tability -- unmatched in its industry & #8230; (because) low fares in a time of recession combined with adroit ?eet management resulted in Southwest achieving a record full-year load factor of 76% in 2009 -- for all Southwest ?ights, 76% of seats were ?lled" (Klein 35)
This ability to survive and thrive while competitors devour one another was noted by a prominent scholarly journal focused on managerial strategy, which observed that "Southwest Airlines has carved for itself a vital niche, maintaining an enviable record of profitability and service quality. In fact, the past three years have been for Southwest a period of continual national recognition" (Quick 46)
Growth has been steady due to the strategy of only entering markets when frequent flights can be achieved cost-effectively. Corporate marketing stresses the company's unique selling points and brand identity (Enz, 2009)