Internal Environment of Southwest Airline - Strength of Resource, Capabilities and Core Competence

Internal environment/organization

Strength of resource, capabilities and core competence

Southwest Airlines has a lot of resources to support its business. Southwest Airlines operates 550 Boeing 737 aircraft which is tangible resource among 72 cities. It also has nearly 35,000 highly productive employees; as one of the most important tangible resources, the no layoff policy makes them care more about the success of the business. For the human resources which is intangible resource, Managers in SWA trained take leadership courses that emphasize a management style based on coaching and encouraging rather than supervising or enforcing rule which creates manager capabilities. The relationship between employees and managers are great. SWA has really good reputation which is intangible resource because southwest was ranked number one among airlines in customer satisfaction. The technology resource, a tangible resource, is also very important for effective customer service which is a capability for marketing functional area. For the technology expansion, they teamed up with IBM to introduce approximately 250 self-service check-in kiosks. This project reduces the amount of time Southwest customers spend in line and improves the airport experience. By 2004, SWA was offering online boarding passes via its web site, allowing passengers to go directly to departure gates without having to stop at the ticket counter. The capabilities of human resources is motivating and retaining talent employees. Southwest's operative principal is "employees come first and customers come second." Southwest employees are "hired for attitude and trained for skill." The company's strategy is that it can train people to do the tasks and hold the skills that are required, but a person's attitude is not something that can be changed. The management in SWA needs effective organization structure capabilities. For example, the use of a single type of aircraft, the Boeing 737, enables southwest to simplify scheduling, maintenance, flight operations, and training activities. It also saves a lot of money for Southwest Airlines because of the strategy of using single type of aircrafts. Southwest pursues aggressive information systems objectives to make the reservation process more efficient. Southwest provides an easy-to-use online reservation system, sends emails to customers advertising special fares, and provides extensive training to information systems managers. Customer convenience increased even more in 2005, when SWA "extended online check-in to 24 hours prior to departure". The company also benefits from its long establishment in the low-cost airline market, allowing the company to capitalize on significant customer awareness of the brand. They provide themselves on cost efficiencies, a core competence, which enables them to offer good service at lower prices to