Topic > Southwest Airlines: Making Profit in Challenging Economic Conditions...

Many companies today struggle to make profits due to explosive swings in global markets. Leaders and managers are constantly asked to make difficult decisions about how to keep their company profitable. Most turn to reducing hours or laying off staff as a way to reduce overhead costs. According to the U.S. Bureau of Labor, the nationwide unemployment rate is 8.8%. In recent years, several large chains like Circuit City have closed their doors, and others like Starbucks and Borders are closing some of their stores to recoup profits. Despite these disturbing statistics, one company that appears to be bulletproof in an economy where more and more Americans are closing their wallets is Southwest Airlines. This unique and unconventional company records profits in the millions. Southwest Airlines continually adjusts its organizational strategy and implements organizational changes to meet stakeholder and consumer demands. This paper will explore Southwest Airlines' original business model, current changes within the company, and the benefits gained through current and future organizational changes. When Southwest Airlines opened its doors in 1971, their approach to this well-defined industry was anything but standard. They have launched themselves into a class of their own through a radical business model. According to Spector (2009), “Business model innovation has become an increasingly common avenue for business growth. At its most basic level, a business model is the organization's approach to generating revenue and making a profit ". (page 5). Southwest Airline's approach was to be a quality, low-cost, high-frequency, point-to-point carrier. Low-cost flights not only competed with other airlines but were also a......medium of paper......she, H. (2004). A culture of commitment. Retrieved from http://www.hr-newcorp.com/articles/Herb%20Keller%20on%20Leadership-1997.pdf.Kelly, G. (2011). The happiest place to work. Retrieved from http://www.southwest.com/assets/pdfs/about-southwest/garys-greeting.pdf.Leadership Now. (2010). Guiding thoughts. Retrieved from http://www.leadershipnow.com/changequotes.html.Schlangenstein, M. (2011, January 6). Southwest loyalty program gets first revamp in 23 years to boost traffic. Bloomberg. Retrieved from http://www.bloomberg.com/news/2011-01-06/southwest-loyalty-program-gets-first-revamp-in-23-years-to-boost-traffic.html.Southwest Airlines. (2011). Information sheet. Retrieved from http://www.southwest.com.Spector, B., (2010). Implementing organizational change: From theory to practice (2nd ed.). Upper Saddle River, NJ: Pearson Prentice Hall. ISBN: 9780136074281.