G. What issues should Ann Rhoades raise in tomorrow’s meeting?

What recommendations
should she make?

 Southwest Airline current position in light of the new competition.

As we read the story of the Southwest Airline, From the beginning, it had operated the same
strategy and style that it maintains to the present. It had been a problem for the Southwest that
the United and Continental had adapt not only the strategies and style of the company but also
the policies and procedures of it.
Ann Rhoades prepared a brief overview of her perspective to the competition’s major threats and
opportunities

Opportunities:
Growth of Hispanic population and the elderly generation – potential markets
Overall air travel is predicted to increase pretty rapidly this decade.
International markets are not yet served by Southwest
New technology – opportunity for new services and products.
Better use of the Internet for marketing, ticketing, etc.
New plane technology, such as the Dreamliner, will increase air travel.

Threats:
Fuel price increases could reduce air travel
Decline of leisure due to terrorism and/or depressed economy
New government regulations could make air travel more costly
Cost will likely arise since there is many more areas for cost cutting
High speed rail could someday hurt short and medium length air travel
Increased competition would likely hurt industry profitability

And an assessment of Southwest’s strengths and weaknesses. By identifying these threats and
opportunities of the competition, the company would have the advantage of what opportunities
that awaits them and the threats that they need to as much as possible get rid off.
As well as identifying the Southwest strengths and weaknesses, it would be a great help for them
to know what the company is good at & the side of the company that lacks in terms of all aspects.
Thus, reacting immediately in planning on how to have an advantage to other competitors ideas
would be more likely to be successful.
The possible Strategic Recommendation of Ann Rhoades to have a Competitive Advantage
against other airlines are:

 Bags Fly Free Program which is now being implemented on the company that for the first
and second bag are not being charged. According to Kevin Krone, VP of Marketing, Sales,
and Distribution

90% of the people liked the ad

84% of the people agreed that “It tells me the brand is not like other brands”
73% of the people agreed that “It motivates me to choose this brand over the
others”
84% of the people had a higher perception of Southwest based on seeing this ad
*By this percentages we can see how Bags Fly Free Program Campaign had been
successful for over the past years interms of the strategies that Southwest had
made.
This advertisement has caught up the customers eyes due to its cost saving program unlike other
airlines which charge up to $120 for the baggages, the Southwest lower the demand in not
charging the baggages once booking a flight to Southwest Airlines.

 Second strategy is operating larger aircraft can be more profitable.

According to CNBC, the Southwest Airline larger plane can fit 189 seats compared to smaller
plane which can only accommodate 172 seats. If this larger planes would be the next step for the
Southwest Airline to be more profitable it is a good way to cut cost in terms of the cost in fuel,
employee, and etc. In fact, if they put up this larger plane into their company, they can accomodate
more passengers rather than the smaller plane which they would place the passengers to another
aircraft in order for them to take their flight.
  Operating the aircraft efficiently
How does Southwest Airline really do it? While other airline fleets has a more than ten or more
types of aircraft to employ, Southwest Airlines just uses one, the Boeing 737. In this strategy,
Chris Wahlenmaier VP of ground operations said, “We only need to train our mechanics on one
type of airplane. We only need extra parts inventory for that one type of airplane. If we have to
swap a plane out at the last minute for maintenance, the fleet is totally interchangeable—all our
on-board crews and ground crews are already familiar with it. And there are no challenges in how
and where we can park our planes on the ground, since they’re all the same shape and size.”
This results in all manner cost-saving efficiencies wherein they would not have a hard time
especially for the mechanics or employees to repair the aircraft if there are any problem that deals
about the airplanes that they are using. If there are any trouble in the aircraft they can immediately
replace it with another one due to the fact that they are the same. Unlike other airlines which has
more than ten different types of aircraft, they would have also different types of mechanic or they
will be trained for that aircraft.

 Continue to cut costs and minimize commitments.

One example of Southwest Airlines on cutting cost is that in 1994, Southwest Airlines followed
the suggestion of a Flight Attendant to remove the company’s logo from rubbish bags, saving
carrier $300,000 a year in printing costs. By cutting costs in the company, it would be more likely
to gain more profits than expensing a $300,000 a year for a logo in a trash bag. Minimize
commitments by offering the lowest fare available, notifying the customers of known delays,
cancellation of flights, and diversion of routes, delivering baggage on time, cancelling your
reservations without a penalty, and when a refund is due providing it promptly, etc. These
commitments are active to Southwest Airline’s Company minimizing the commitment to the
customers would make them more profitable due to the fact they could work more effectively.

 Providing best service than competitors

Some samples of services that Southwest Airlines had provide is the so called Choose-Your-
Own-Seat Everytime. This service could trigger the empowerment of the customers on where
they want to seat. Another service is the Bags Fly Free campaign. Another service that outstand
other airlines is you will not be charged if there are any change of plans. Unlike the other airline if
you want to cancel your flight or reschedule, it is mandatory to pay for a extra. Another example
is the crew-customer relationship, According to Southwest Airlines, “More often than not, we
board planes without much excitement — we’re lucky to even get a “welcome aboard” from the
crew. Southwest Airlines, on the other hand, has consistently been defying the odds, with
its consistently friendly crew and positive passenger experiences that often result in viral
videos. David Holmes, for instance, took the internet by storm back in 2009 when he became
known as “The Rapping Flight Attendant.” Let’s be honest — once the flight crew begins making
safety announcements, many of us, especially if we travel a lot and have heard this 100
times, start to tune out. But on this evening flight to Oklahoma City, Holmes wanted to make sure
his passengers were still in the upright position and paying attention, in a fun, entertaining way.”
H. What can Filipino Companies learn from Southwest?
Filipino Companies can learn from Southwest are:
First, how to treat employees in order for the company to benefit for their hardwork. We all know
that employees are part of the bloodline of a company aside from customers. In order to serve
the customer with great service we need to satisfy our employees first in order for them to make
their customers feel the same way. In addition, application of 4E’s of Leadership.
Envision
Having a clear vision on what the company wants and planning to achieve it. Relating to
Southwest Airline their vision is “To become the world's most loved, most flown, and most
profitable airline.” The airline come up with a strategy wherein they lower their flights rates in
order to gain market share. In relating to what can Filipinos learn is that all business may start in
a rocky road, it doesn’t have shortcuts. Taking risks is a 50/50 chance, but if you would not fail
you won’t experience success. In every failure there are lessons that we can learn and what
really defines us is how well we rise after falling.
Enable
Having the tools and technologies are necessary to get the job done. In southwest airline
they started with a small aircraft which accommodates 172 seats and as time past by and
continually gaining market share they upgrade to Boeing 737 which accommodates 189 seats.
What Filipinos can learn from this is that it doesn’t matter how small or big your business is as
long as you have the passion and dedication to be successful. Hardships and struggles come
by but if you take that obstacles as stepping stone for your success it would be worth the wait.

Empower
Providing the space necessary to get the task done. The Southwest Airlines made their
employees as number one customers for them are the ones who will experience the services
and will do the service to its main customers. Having a good employees doesn’t mean having a
good company it just that it is a measure of how it would reflect to the feedbacks of your target
market or customers. Filipinos are more likely want to have a free environment wherein they
don’t want to somehow to be directed but also have their own decision towards their work.
Empowering them is a great tool to be relative and comfortable at their work with standard
limitations and without violating the companies policies and procedures.

Energize
The more energy the team generates, the more energy the leader has. The Southwest
Airline mainly prioritize the employees that are under them before prioritizing the customers.
Energizing the team is one way to have a good relationship to employees. Filipinos should
practice this kind of relationship to further build the trust and teamwork towards one another.
Not because you are part of the top of management doesn’t mean that you have the right to
look down to lower employees. It would be a great opportunity to build camaraderie and
teamwork to the businesses growth.

Lastly, the main lesson that Filipino companies can learn from Southwest Airline is that not all
your competitors are your competition, in Southwest airlines they didn’t consider United and
Continental as a competitors but rather the ground transportations. Treat your competitors as
your basis on how will you want to be your company look like. It will somehow have
discrepancies and differences in every company and that would be a great way for a company
to benchmark and learn from one another in order to reach success.