![]() ![]() To afford staying in business, it had to sell one of them. In its formative years, the company had only four planes. Yet, Southwest employees came to view challenges as inspiring. For example, it takes dedication and teamwork to consistently turn around a plane in about 20 minutes and still maintain a friendly, smiling face for all customers. The activities that support these strategic choices in turn depend on engaged, committed employees who feel more like part of a team than cheap labor. In the table below, we list the decisions that Southwest chose to do to support its mission, which required consciously choosing not to do other activities. Many companies define what they want to accomplish, but the subtext is to do anything that will earn a profit. Thus, strategy by definition involves tradeoffs, and Porter, in fact, says that you cannot have an effective strategy without defining what you will not do. Southwest Airlines’ Activity System Mapping Lean productive gate crews also support frequent, reliable departures, and the combination of reliability and low prices is very attractive to customers. For example, lean productive gate crews enable high aircraft utilization, and these together support low-ticket prices. A large number of specific activities support these as shown in the more detailed activity system map from Porter’s aforementioned “ What Is Strategy” article. These include focusing only on short-haul, point-to-point routes, limited passenger service, high utilization of aircraft, and lean, productive ground and gate crews. Southwest Airlines’ Core Activities for “Reliable, Low-Cost Air Travel” The core activities are shown in green in the figure below. To do this requires a network of interconnected and innovative activities. In fact, it is even able to achieve low-price ticketing while paying among the highest wages in the industry. The company invests heavily in its culture of friendly associates who are known to take extreme measures to entertain and please customers. ![]() “To connect people to what’s important in their lives through friendly, reliable, and low-cost air travel.” It has dominated the limited point-to-point markets where it does business and has typically traded out about twice the price-earnings ratio of its competitors. Southwest has been a benchmark for its success, experiencing its first quarterly loss in 17 years in 2008. In other words, they are benchmarking and copying the activities of their competitors and simply cannibalizing each other’s profit margins. ![]() In an issue of Harvard Business Review, the guru of corporate strategy, Michael Porter, defines strategy as: “performing activities differently than rivals do.” According to him, this requires “defining a company’s position, making trade-offs, and forging fit among activities.” He goes further in arguing that companies who focus on operational efficiency are playing a losing game. ![]() I cannot express how well we were supported during this crisis and how thankful we are to be a member.Why would a company do such absurd things? Southwest wasn’t just trying to be different it had a clear strategy. Emergency Assistance Plus staff called us on my cell phone every couple of days to see if all was going well. After consultation with her doctor they agreed we could drive home if we agreed to a maximum number of miles per day and a minimum number of hours of sleep per day during the drive. When discharge was planned EA+ offered to arrange a flight home to Sarasota, FL and have our car transported to our home. Over the next four days while she was in the Neuro ICU and later in a regular patient room EA+ regularly called me to see what they could do for us. I decided to drive and meet them at the Hospital in Albuquerque. I was offered to ride along and they offered to transport my car. That was when I called Emergency Assistance Plus and they immediately took steps for the hospital transfer. They recommended that she be flown to the University of New Mexico Hospital in Albuquerque. they told us she had a slight leakage of blood in her brain. In Gallop, NM we went to a small hospital and after some tests, etc. Over the next three to four days she began to talk about a slight headache. We got her up slowly and she seemed to be fine. When I looked to see what had happened I found my wife lying face down on the floor. Whie I settled the check, I heard a thump and some scurrying of staff. Approximately halfway through our trip we were having dinner at a nice restaurant in Big Sky, MT. My wife and I were traveling on a self-directed motor trip to visit National Parks. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |