Question

How has Southwest built its resources to meets its generic strategy, competitive forces and add value to its customers?  (Hint: Resource Based Model)

Answer 1

Southwest Airline had quiet a good self sufficiency in the following three categories of tangible resources- Human Resource, Financial Resource and Physical resource. The company has a great pool of skilled Human resource which would enable it to achieve high ratings of customer satisfactions. Their Financial resources were well established after a prolonged years of profitability and thus, providing them with greater investment capabilities. Lastly, Southwest Airlines had also implemented a very planned approach towards deployment of best-in-industry physical resources like Computer systems, Hanger facility, etc. and this would act as a backbone to all the activities undertaken at the airlines.

In addition to the Tangible resources, Southwest Airlines also possessed a good proportion of Intangibles resources. It had the Technical resources in terms of established systems like Customer Management System, etc which would make its operation very scalable. In addition to this, it also possessed Intangible resource in terms of Intellectual Property, which would safeguard its business ideas and corporate assets. Moreover, the established corporate culture in Southwest Airlines also played a very critical role in enabling it to provide value added services to customers.

Southwest Airlines had utilized the Resource Based Model of strategy formulation very effectively. They had primarily focussed on sustained development of these resources and when these resources were well established, they would draw out strategies making these resources their competitive advantage over its competitors. They would target their strategies to reap the maximum benefits from their resources and thus leveraging it to achieve sustained success. By developing its key resources as its core competencies, Southwest was able to improve its operation efficiency and thus achieve economy of scale. In addition to this, their customer focused culture, one of its intangible resource, helped it establish an intimate relationship with it customer and thus helped it to pass through those dips of tough economic times with ease. Additionally, their scalable management systems also helped it to cater to the needs and demands of all its stakeholders with ease. So to conclude with we can say, it was able to direct all its resources to achieve its desired vision and mission.

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