Firms facing opponents who have equal or superior resources have no other option but resorting to manoeuvre warfare, while competing for business. The best example is from the US domestic airline industry and the firm in question is Southwest Airlines. Read for more….
Richard Simpkin, military strategist says, “The striking value of the smaller force can be increased if it is swung at the end of lever arm against the enemy’s flank or rear”. This was adopted as the business manoeuvre by southwest Airlines skilfully.
Look at the short comparison of American Airlines ranked number 1 in the domestic air transportation and Southwest Airlines ranked fourth:
American airlines – Passenger flee 1,570 market shares 18.1 %
Southwest Airlines – Passenger fleet 254 market share 17%
The conclusion is clear Southwest cannot take the fight to the front of American in terms of assets deployed. So it decided to bring the leverage of manoeuvre warfare onto the end of rear or the flank. The following were carried out by the Southwest:
1. Southwest abandoned the hub & spoke operational system and opted for point to point system. A hub-and-spoke network connects every location through a single intermediary location called a hub. Whereas point-to-point network connects directly a set of locations without any interruption of services even if the route itself may not be direct. This business manoeuvre gave the passengers huge benefit of by way of flexible travel plans.
2. American measures customer loyalty on the basis of air-miles flown, whereas southwest measures number of trips undertaken which gave short distance travellers a boon by way of loyalty credits. Originally termed as frequent-flier scheme this system was later re-christened as “Rapid Rewards”.
3. American charged extra dollars for checked luggage while Southwest gave two checked luggage free and additional ones allowed with small fee.
4. Southwest stretched customer service to the maximum. On board opinion of fliers was that their fight in-service and ground handling are big plus points. Comments such as “Southwest really loves customer service that is friendly and sometimes funny” are frequently heard from satisfied travellers. So much so the US Department of Transportation went public stating that it has received the lowest number of complaints about Southwest compared to all other major airlines!
Cheers!
Muthu
Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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