Employee Focus
One of Southwest's competitive advantages is its focus on its employees. Employee-focused companies are dedicated to creating an atmosphere in which employees can be successful. Part of this is hiring the right people - Southwest has its own YouTube channel full of videos by employees talking about the culture of the company. They use words like family and love and support, so it's easy to see that employees care for each other and feel valued at Southwest.
If people feel support and encouragement from management, they will be motivated to do their jobs well. Basically, if you take care of your employees, they will take care of your customers. Southwest embraces this philosophy whole-heartedly. If you've ever flown on a Southwest flight, you've probably seen this in action. Southwest employees are well known for being incredibly friendly, helpful, and cheerful. They are living the company's mission to providing customer service 'delivered with a sense of warmth, friendliness, individual pride, and company spirit.' This focus on employees and having the right team gives the company a competitive advantage in customer and employee satisfaction.
Flexibility for Customers
Southwest Airlines is also known for its flexible policies. In the airline world, Southwest is like a yoga guru - it bends. If you've ever had a last-minute change of plans and needed to change your flight, your wallet is probably still stinging from hefty cancellation fees and nonrefundable tickets. This is where Southwest shows its flexibility: customers can cancel their flights within 10 minutes of departure and receive full credit of funds to use for a future flight. Sounds too good to be true, right? It's not. In an industry that is dominated by add-on fees and hidden charges, customers appreciate this type of flexibility more and more. Southwest also shows great flexibility in its rewards program. Customers earn rewards when booking flights and there are no strings attached to using those rewards: no blackout dates, no restrictions, no extra fees. Offering flexibility has proven to be a competitive advantage for Southwest Airlines and has helped it attract and retain an incredibly loyal customer base.
Low Operating Costs
Southwest Airlines' competitive advantage also comes from its low operating costs. The company is always looking for ways to cut costs to keep ticket prices low. This benefits the airline in two ways: it helps it to be more profitable, and it builds customer loyalty. Here are some of the ways that Southwest Airlines keeps its operating costs low:
- No meals are served on flights
- Planes do not have a first-class section
- Flies only one type of plane: the fuel-efficient Boeing 737
Lesson Summary
Southwest Airlines has found ways to differentiate itself from its competitors in order to provide a competitive advantage. The employee-focused company make its employees' satisfaction a priority. Hiring the right team helps to make them more competitive and increase customer satisfaction. Its flexible approach to customers also makes it competitive and keeps customers loyal. Lastly, Southwest Airlines implements low operating costs to keep ticket prices low and increase profitability. The airline and its employees do it all with a smile and a wicked sense of humor, and the end result is lasting profitability and lots of happy, loyal customers.
