Southwest Airlines Case Study: Alaska Air's Success Story

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The company uses the Six Sigma framework. Alaska Air’s Success story is that with the use of Lean Six Sigma at the end of the first year they were able to achieve a 20 minutes wait for baggage compared to the original 45 minutes wait. Second, the rate of missing bags and flight cancellation decreased. Third, they became the number 1 on time airline in the United States (2012) and consistent rated in being in the top 3 three years later. Today, they have the lowest complaint rate (0.5 per 100,000 passengers). Alaska Air measures the customer performance metric. For the customer metric, they measure customer satisfaction level and customer retention. They focus on the number of customer complaints and as to how long the customer waits for his/her…show more content…
Southwest Airlines The company uses a balanced scorecard since it provides an integrated scope of the company’s strategies and performance measures. Southwest Airlines is trying to achieve an objective. Since a balanced scorecard is a strategic planning and management system, they used this framework to be able to map their strategy and to be able to pull everything together. Southwest Airlines is focusing on the financial side but they are trying to keep their unique position – the only short haul, low-fare, high-frequency, point-to-point carrier in America. To do this, for their financial indicators they are trying to find new sources of revenue in order to minimize the fares and costs. Besides lowering the costs and fares, they also have customer profitability, when this increases, sales and revenues increase respectively. For their customer indicators, they aim to acquire more customers since this gives them an idea on customer satisfaction. The most basic way to earn customer satisfaction is on-time flights, this is another indicator for Southwest since customers doesn’t like it when their flights late even though they got it at a cheaper price, in line with this is on-freight deliveries. For their internal processes indicators, they do their best to improve operational efficiency since they offer services and not products. They also reduced non-core activities since this just incurs more costs and unnecessary for the process. The company also applied cost reduction…show more content…
For the customer metric, they measure the annual number of new customers, annual proportion of on-time flights to total flights, and customer satisfaction survey. The annual number of new customers is being measured because an increase in the number of customers can give the company an idea about their future and potential growth in the market. This also gives an idea about the customer satisfaction. The annual proportion of on-time flights to total flights is the basic indicator for airlines. Even if the company has a low-fare image, if their flights are late, customers still doesn’t prefer it. The customer satisfaction survey is measured through a survey by rating them through satisfaction

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