Balanced Scorecard for Southwest Airlines
Strengths, weaknesses, and strategic issues
Southwest Airlines is the leader in the US domestic flights market. Some of the reasons for that success are the company’s culture and the attitude towards customers and employees. One of the most significant strengths of the company is its culture. Employees are truly the company’s major asset and the company values its staff. Top managers of the company are proud of the fact that there have been no layoffs in the history of Southwest Airlines.
There are numerous incentives that create a very friendly atmosphere in the working place. Thus, employees have corporate celebrations of major holidays. Each employee gets a present or financial aid when there is a meaningful event in his or her life. Employees feel that care and they are willing to give back. Hence, employees have continuously saved the company’s money by suggesting numerous ways to decrease costs (buying parts of PCs instead of buying already assembled ones).
Training (as well as promotion) also plays an important role in this process. Employees are eager to invest their time and go the extra mile to make sure that they contribute enough to the development of the company. Of course, particular attention to customers’ needs is also a reason of the company’s success. Southwest Airlines tries to make fares lower, flight time shorter, destinations more convenient. Of course, the company has always come up with new ideas concerning passengers’ comfort and satisfaction.
At the same time, there are certain weaknesses. Kelleher’s principle concerning planning seems to be still accepted in the company. The company seems to have no particular strategic plan where all goals and strategies could be provided. Southwest Airlines seems to react to the changing trends developing strategies after the issues and/or opportunities have appeared. This can jeopardize further development of the company as it is going through significant growth. Companies need particular strategic plans when they are growing rapidly as the plan makes the process smoother. For instance, it is essential to understand major goals to remain focused. Although the company is now the leader in the market, the business environment is highly competitive and it is important to predict possible issues and be able to address them.
As far as the strategic issues are concerned, it is necessary to note that Southwest Airlines has to undergo significant changes and considerable growth. Southwest Airlines is acquiring another airline company that operates in a different market. Clearly, this process is potentially difficult. Southwest Airlines will need to make sure that there is efficient information technology that will effectively run numerous processes (including operations, customer support, internal communication, and so on).
It will also be important to make sure that the newly acquired company will share the culture of Southwest Airlines. Of course, significant growth of the company may lead to certain changes and can affect corporate culture as well since it may be difficult to remain employee-focused with increased staff. Hence, Southwest Airlines has to address all these issues to preserves its strengths.