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Southwest Company Airline is a domestic airline based in Dallas, Texas, within the United States of America. It is the largest airline in the country based on the domestic passengers transported (International Air Transport Association, 2011). It is also the most successful low fare and high frequency carrier in the United States. From the Resource-Based View forum, it can be deduced that the economic value of Southwest Airlines conforms to the resource and capability heterogeneity and resource and capability immobility assumptions. However, data on each of the tangible and intangible resources of the company can be collected via sampling regular and first-time passengers who have traveled with the airline.

Principally, statistics on the three capabilities collected from the online sources provided has been embraced. Besides, conclusions about the strengths and weaknesses facing the Southwest Airlines have been illustrated through conducting an Internal Analysis which encompasses the SWOT analysis both theoretically and practically. This information has been further synthesized with the data collected on the tangible and intangible resources of the company. In addition, the data reported below has been cumulatively cited in the in-text citations and the reference list herein.

Presently, Southwest has benefited from much hopeful spirit and a strong economic improvement from its energy operational expertise. Nevertheless, while nearly all market analysts concur with that instability hedges can be advantageous, approximate hedges are not extensively held as an ongoing approach for proceeds (Southwest Airlines Co., 2011).

Introduction

Resource-Based View (RBV) of a company can be interpreted as the internal capabilities of the company in formulating strategies to achieve a sustainable competitive advantage in its line of production or market segment (Stalk G. et al, 1992). Southwest Airline’s economic value can be determined by examining the Resource-Based View (RBV) framework of the company. In this instance, two assumptions will be considered. The first is the Resource and Capability Heterogeneity of the firm assumption (Stalk G. et al, 1992). Here, the theory that different companies possess bundles of different resources, and capability is applied. This is illustrated in the table presented in the Methodology. The second assumption is the Resource and Capability Immobility where it is assumed that the resources and capabilities of Southwest Airlines are inelastic in supply and costly to duplicate (Stalk G. et al, 1992).

Southwest Airlines has achieved a status for having a practical risk management making decisions that have not been made before, incorporating the use of fuel evasion to shield against fuel cost instability. Some market analysts have disputed against the technique of income-induced energy business Southwest did from 1999-2000. They recommended that rather than evading trade threats like an evasion on climate to a farmer. Southwest was basically contemplating on energy costs, without an official validation for doing so.

Southwest has thrived in making constructive office customs by encouraging open communication and an excellent team harmonization. The airline has centered its interest to attaining a high intensity of synchronization among personnel groups to convey better aircraft and worker efficiency, fewer flight interruptions, and fewer client grievances. The sustenance of top-rank management is a major causative aspect to their achievement in concurrence with a sophisticated set of personnel performance.

This approach is analytic of Southwest's HR strategy, which is aimed at the expansion of an interrelated team concentrating on team presentation rather than the individual outcome. There is a huge concentration on employing the right staff and assisting workers to function at their best by use of performance management and dedication in leading staff by offering response and sustenance. The airline also upholds employment/life equilibrium, persuading workers to uphold strong society and family connections.

Methodology

The Valuable Rare Imitable Organization (VRIO) resources and capabilities frame work for analysis will be employed in analyzing the Resource-Based View of Southwest Airline Company (Barney, 1997).

Data Analysis

From the online resources availed, the tangible resources associated with Southwest Airline include the immense size of its fleet of airplanes, the human resource which is comprised of the cabin crew members, the pilots and the sales point coordinators, and the landing and take-off slots. On the other hand, the intangible resources present in Southwest Airlines include the facts gathered over the extensive years of experience by the management and the staff, the standards of customer care exercised and the amount of trust and confidence accrued by the company to its clients (Barney & Wesley, 1997).

The capabilities admissible in Southwest Airline include the capability to recruit human qualified resource, the capability to serve its clients efficiently and effectively through providing services such as free baggage and the capability of the company to trade its stock in the stock exchange (Skytrax, 2011).

SWOT Analysis:

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Excellent customer service

Limited cabin crew staff

Developed human resource

Competition from domestic airline companies

Experience in the Airline industry

Obsolete methods of customer care

Mergers and acquisitions

Financial constraints

 

It is evident that Southwest Airline Company is a formidable airline company whose Revenue-Based View when compared to other competitive domestic airline companies is impressive. From the data available, Southwest Airline is the only domestic airline company that has recorded profits. This can be attested by the airline’s management quality which saw the company survive the recession in the 1990s, the Gulf war and the 9/11 attack to the world trade centre. The knowledge, desire and ability of Southwest Airline are also evident by the method with which the company has executed its strategies without compromising on the quality of its services.

Southwest's 2008 statement that explains the company's dedication to the environment and information on the airline's commercial accountability and nationality endeavors concerning citizens, globe, society, and dealers. Southwest has been a chief motivation to other economic transporters, and its industry replica has been replicated repeatedly globally. The competitive approach merges high rank of worker and aircraft efficiency with minimum expenses by decreasing aircraft rotation time, mostly at the gateway. The business excellently serves the requirements of small- and medium-ranged companies (Bamber et al., 2009).

In 2007, Southwest Airlines emerged tops in the Travel sector, according to a City Business Journals Network countrywide study of 1,000 company assessors who assessed 251 products. Business Ethics publication records Southwest Airlines in its 100 Top Commercial Citizens, a record that grades public businesses according to their commercial service to diverse groups of stakeholder. In 2005 and 2008, “The American Customer Satisfaction Index “(ACSI) acknowledged Southwest Airlines as the leading business in client contentment.

The ACSI, performed by Michigan University, separately follows client contentment status by evaluating the family expenditure practice. Since 2000, HISPANIC publication has scheduled Southwest Airlines as commercial 100 for management in giving chances for Hispanics and for sustaining employment, scholarships, and alternative retailer plans. Southwest Airlines was graded position one in the customer group in all airlines as the main investor friendly business according to the efficiency of Southwest's control and shareholder associations as a component of their business strategy.

Recommendation

In the case of the instance of Southwest Airlines’ quest to grow through conducting acquisitions, the company has not always been successful. It is recommended that conduct market estimate to establish the cost benefit implications. Moreover, the airline company should introduce a frequent-flyer mile accumulation strategy to provide incentives to the constant passengers enjoying the services of the company.

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