Operational Implications of the Proposal
The proposal is opposite of the core strategy of the company which concentrates on offering low fares, low operational costs, and traffic stimulations. Rolling out the business class would mean that the company will spend a lot in improving or purchasing new airplanes which would translate to higher fares. The company would have traffic stimulation that would infer that more capacity is needed (Rao et al., 2015). Consequently, the business model would change and as such, the company may lose revenues over time since some of their existing customers would shift to other airlines since there will be no difference between the company and others in the industry.
The proposal would change a lot of old paradigms that have made the airline popular among its customers. Among the paradigms is the barding procedure. The business class would be given priority in the choice of seats, and this would have a negative effect on other customers who are used first to come first served basis. Also, business class would be given priority in the lines before boarding which is contrary to the business model created when it started. Therefore, this would destroy the brand they created for over all the years they operated and consequently lose favor in some of their clients.
The proposal would create the avenue for new customers to start using the company since they were not using the airline due to the unavailability of this choice. The business class would assure the traveler's comfort as they travel since they can have more facilities such as comfortable seats, movies, wifi among other services. These services would be compensated with a higher amount of fare which consequently will increase the amount of revenue that the company will receive. The new customers represented the new market share that the company would have acquired, and hence, the company would be able to gain more of available market share.
The business model will be altered since the business class would alter the costs of travel for the business travelers and as such, the airline would lose its brand of offering cheap fares to the consumers. The Airline will have to adjust some of their operational activities which in effect would cause the loss of some of their urgent core values that have been in existent in the company (Rao et al., 2015). Consequently, some of their clients would leave the company since their brand is lost. Therefore, the success of the company is through its strategic branding and business model which for this case would not work for the better of the airline company
Moreover, Southwest Airline will help to develop the supporting technology that would help to sustain the business class in the airplanes. This technology would require more investment which would lead to more money spent on improving the current airline technology. Therefore, more costs incurred would cause the airline management to consider hiking the fare to cover more of the costs used for implementation of the technology. The hike of fares will hence be opposite to the company strategy of offering low fares and hence interfering with the operations of the company.
Role of Company Departments in Examining Feasibility of the Idea
The finance department would prepare the budget to check whether the company would still operate at the minimum cost as it is their policy to be a low-cost carrier. If the budget would conform to the company models, then the management will consider the idea feasible. Since Southwest Airlines would offer a new service, then it might need to invest more money into the money for purchase or improvement of new airplanes such that it fits the business class standard. The source of funds for the purchase or improvement of the airplanes should not be costly or risky otherwise the management would have to consider the idea not feasible. The financial department will have to use investment analysis to see whether the investment would bring highest returns (Cameron, 2017). The financial department would then compute the financial risks of a company to ensure that the introduction of this service would not cause liquidity or financial problems in the business. Moreover, the department would provide money for the marketing and human resource departments to sell the business well.
The airline marketing department aims to increase the company revenue, market share, and its company profitability by introducing the business class. The market department would check the feasibility of the marketing department by setting the marketing strategy such that it aligns with the overall strategy of the airline. Through this, they would be able to determine if the introduction of the business class would interfere with any of the company strategy and objectives. The market department would conduct a market research on the needs of their customers and whether the business class would help them gain market opportunities. Also, the department would have to examine if the new service will make them lose their existing customers. This way they can better make decisions on whether the investment is feasible. Alternatively, the marketing department would set the prices for the new service and test if it would attract their existing customers and new customers in the market. The new service would be marketed using advertising campaigns, company websites and newsletters, social media, and others. The marketing department would then be able to gather information on the new service since they will gauge the reactions of the market. Therefore, the above steps will check the feasibility of the new service offered by the Southwest Airlines.
Human resource in an airline company entailed dealing with employees matters as well establishing long-term strategies that would benefit the company over the long-term. For this case, the human resource department will evaluate if the company has competent and enough employees to serve the customers who will be in the business class docket. The department would also evaluate whether the increase in compensation of new employees would be sustainable in the company since they are responsible for the mapping of pay structures in the company. The department will also evaluate if it complied with the regulatory laws if new employees are employed in the company (Weiss et al., 2017). The department will examine the long-term strategies of the company and align it with the new service to check if it would lead to the increase in business revenues or it would derail most services that were initially available. Consequently, such comparisons would be critical in establishing if the idea is feasible even after it is implemented in the company.
Cameron, K. (2017). How Southwest Airlines challenged a global crisis. The Business & Management Collection.
Rao, V. S. P., & David, R. (2015). Employee branding and strategies: A winning combination for southwest airlines. SMART Journal of Business Management Studies, 11(2), 73-81.
Weiss, E. N., Weiss, E. N., Friesen, M., Friesen, M., Weiss, E. N., & Weiss, E. N. (2017). Southwest Airlines: Singinthe (Jet) Blues. Darden Business Publishing Cases, 1-16.
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