South-West Airlines – a critique of its business strategy and approach to HRM

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Name: Instructor’s name:Course:20 November 2016 South-West Airlines- A Critique of its Business Strategy and Approach to HRM The position of a firm in a sector is assessed by the level of its profitability against a particular industry standard. A Long-term sustainable competitive edge is what determines whether a company retains above average profitability or not. The two standard competitive advantages, according to Porter, are differentiation and low cost. According to Porter, these competitive advantages coupled with a firm’s intended activity scope “lead to three generic strategies for attaining above average industry performance” (Porter 19). These are differentiation, focus, and cost leadership. SW Airlines skillfully uses Porter’s cost leadership theory to ensure that it charges the lowest possible prices (Porter 23). To achieve this, it cuts on things like meals, interline transfer of baggage, and seat assignment. In differentiation, a company seeks uniqueness in an industry by innovative strategies along certain areas that the clients value. SW Airlines employs this theory by investing heavily in the training of its human resource and coming up with unique concepts like the rapid gate turnaround. These help them attract and retain loyal and happy clients. Henry Mintzberg, a management guru, argues that the people that get the strategy right are much fewer than those that get it wrong. According to him, those who get it right like Southwest Airlines employ the 5 Ps; plan, ploy, pattern, position, perspective (Mintzberg 12). In essence, what he means is that, before one strategies, he has to brainstorm options, and then come up with an innovative

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