All companies must require customer service in order to remain competitive in the global marketplace; Southwest Airlines has achieved extraordinary levels of customer satisfaction. While Southwest achieves this satisfaction through a no-frills, cheap airfare approach, These high levels of customer satisfaction have resulted in profitable, market leader.
Practices to be Benchmarked:
Southwest offers different services, serve different customers, and use different strategies to achieve their goals. Although they differ in these areas compared to the industry, these companies can learn from one another. The most effective way to learn each other is by benchmarking world-best practices.
Practices Southwest Airlines May Benchmark:
Southwest Airlines is a United States domestic carrier seeking to expand into the global market. This strategy necessitates a benchmarking process. Southwest must look to establish global airline industry leaders such as British Airways, for effective techniques. Fuel efficiency and international experience are two areas in which Southwest may benchmark.
Fuel efficiency is key to cost reduction in a global marketplace. Global carriers often travel much longer distances, and, therefore, must minimize fuel costs. British Airways has set specific targets for fuel efficiency, designed to minimize the costs. With Southwest’s competitive advantage being its low price fares, the company cannot afford to increase prices due to inefficient fuel management. Southwest should also set targets to maintain their fuel costs, as British Airways has done. By exploring how British Airways maintains their fuel costs, Southwest Airlines can learn a lot and continues to remain competitive.
International experience is also critical to competing in a global marketplace. Founded in 1916, British Airways is one of the oldest airlines in the world. British Airways currently serves nearly ninety countries, with satisfied customers around the world. As Southwest Airlines attempts to expand beyond the borders of the United States, it can learn a lot from its foreign counterpart. Operating on a global level is very different than operating in a domestic market. Southwest should take from British Airways international experience, and learn from the best.
Conclusion:
Benchmarking partnerships can be very beneficial for companies looking to succeed. Southwest Airlines lead their markets due to slightly different world-best practices. Each of these companies can adapt the other’s world-best practices to fit their organization. By doing so, these companies can improve their performance with slightly modified techniques. Information sharing will ultimately lead to increased success and expansion. In an industry as competitive as that of the airline, Southwest Airlines must remain flexible and able to respond to changing market demand.