1. Value Chain analysis
○ What are two key ways in which Southwest manages its operations
or other parts of its value chain that are different from its
competitors?
○ Do these differences contribute to a difference in the experience for
Southwest’s customers (and how)?
Southwest is known as an airline that is low cost and very flexible compared to other US
carriers. Having a good customer relationship helps Southwest stand out and attracts
loyal long term customers that support the firm. It is a strategy that pays off the long run.
2. List two of Southwest’s capabilities (capabilities are activities or processes
such as customer marketing) and perform a VRIN analysis on each of these
capabilities
○ Do either of these two capabilities appear to provide Southwest
with a sustainable competitive advantage? Why or why not?
Open seating would provide Southwest a temporary competitive
advantage until competitors catch up.
Capabilities
Value
rare
Inimitable
No substitutes
Allow open
seating on
Y
Y
N
N
flights
Adding more
flights/ more
destination
Y
N
N
N
3. Please recommend 3 strategic priorities that you believe Southwest should
focus on in the next five to ten years (from the time of the case) in order to
maintain and improve its strategic position.
Southwest airlines should focus on
Diversification
Diversifying income steams can help the firm
become less reliant on air travel alone.
Adaptable policies
Make it easy for the customer to work with
the airline, make it easy for the customer to
cancel/reschedule flights. Insure customer
satisfaction.
Product growth and development
Southwest needs a way to stand out from
other airlines, Southwest needs to be unique
for something that customers seek them out
over other airlines. Southwest need a special
quirk to win the customers.