Week 2 Discussion Responses
Week 2 Discussion Response – Strat Mgt
Per the Los Angela’s Times, airline consolidation has created fear among consumer advocates (Martin, 2014). One airline in particular, Southwest Airlines, the low cost carrier—has always valued cost savings and convenience. The rationale behind the consolidation was geography, making it possible for smaller carriers to have a larger footprint in additional locations (Martin, 2014). Additionally, carriers small and large are better able to tap into smaller markets by working in tandem with one another—while increasing consumer demand by consolidating services.
From a business point of view, airline industry consolidation is the most effective approach to staying ahead of competition. With motivation and inspiration from several leaders, this approach produces progressive change in consumer demand through combining services. Further, all carriers are able to capitalize not only on increased revenue, but also the newer planes and products (EFT, 2017).
To achieve higher earnings and undermine increased competition, Southwest Airlines should utilize the differentiated business strategy. This strategy will afford Southwest Airlines to reinvent themselves by offering unique services tailored to the specific needs of their consumers, while also reaching a broader consumer base. This will allow consumers to compare the unique differences between services and products between Southwest Airlines and its competition.
Employing differentiated business development style will help Southwest Leadership focus on the strategic vision of the organization. This business style will allow Southwest Airlines to overcome their created dilemma and paralyzed inertia that is required for them to have an advantage over its competitors. This will also place emphasis on development which fosters a clear understanding of organizational goals needed to overcome competition.
Eye for Travel. (2017). US Airline Consolidation: What Happens Next? Retrieved from https://www.eyefortravel.com/revenue-and-data-management/us-airline-consolidation-what-happens-next Martin, H. (2014). Impact of Airline Mergers a Mixed Bag, Study Says. Retrieved from http://www.latimes.com/business/la-fi-impact-of-airline-mergers-20140613-story.html
Week 2 Discussion Response – Strat Mgt
Southwest Airlines, based in Dallas TX, has set out to differentiate itself from other air carriers with exemplary Customer Service. They set up a best cost competitive strategy to maintain an advantage over their competition. The new colors of Southwest have declared their commitment to this intangible asset. The Bold Blue shows the spirit of reaching new heights. The Warm Red represents passion for customer service. The Sunrise Yellow symbolizes a new day. The Summit silver adds energy and synergy. Southwest offers no change fees. Southwest allows up to two bags fly free. With the current economic state, most airlines have needed to be bailed out, consolidated, and shrunk their footprint. Southwest has declared themselves a major player by operating facilities at full capacity. In July 2014, Southwest became an international airline (Southwest Airlines, 2017). They further adapted a labor saving method by not assigning seats, but a first come first seated theory. They then “sold” this method to the customer by explaining it was a freedom of choice and used this to differentiate themselves further (Thompson, Peteraf, Gamble, & Strickland, 2016). Southwest targeted the adult population by making their airline the airplane of LOVE. LOVE in the skies a mile high. The stewardesses are then able to give a unique experience with overhead announcements full of jokes, happiness, and laughter. This strategy has helped them become the number one choice of most travelers.
Southwest Airlines. (2017, October 1). Southwest Corporate Fact Sheet. Retrieved November 01, 2017, from https://www.swamedia.com/channels/Corporate-Fact-Sheet/pages/corporate-fact-sheet
Thompson, A., Petraf, M., Gamble, J., and Strickland, A.J. (2016). Crafting and executing strategy :The Quest For Competitive Advantage : Concepts and Cases (20th ed.). New York, N.Y. : McGraw-Hill.
Week 2 Discussion Response – Managerial Acct
Just-in-time (JIT) is an inventory strategy companies implement to increase efficiency and reduce days inventory on hand (DIOH). This strategy was developed in Japan in the 1970’s where Toyota first popularized it. JIT helps Wal-Mart reduce its inventory which is very important because of the variety of products they provide for their customers. A smaller back room for inventory storage means a larger sales floor where more displays and items can be showcased for purchase.
JIT can be a con to a company’s vendors. Vendors have to be willing to ship at smaller minimum order quantities than normal. A lot of pressure is put on the vendor to fulfill these JIT orders because of the expectation of its customers like Wal-Mart or other large retailers getting these orders in a short manner and on time. If a vendor to Wal-Mart is too far away it may need to rethink its shipping location in order to serve a large customer like Wal-Mart or they might lose their business to a vendor that can meet Wal-Mart’s JIT ordering.
I think this is a good business practice and is ethical to its vendors. Retail margins, especially in grocery retail, are razor thin and strategies like JIT are very impactful in not letting money sit in storage when it can be used in other parts of the business. As long as a healthy relationship can be maintained with the vendor I do not see an issue.
Wal-Mart, the famous variety retail store, strives off of “saving people money so they can live better” (Walmart, 2017). The company, which has been up and running since the 1960’s provides many different products for customers at very low prices, all the time. With Wal-Mart carrying many products, these products are provided by multiple vendors/suppliers.
JIT (just-in-time), “requires that all resources — materials, personnel, and facilities — be acquired and used only as needed to create value for customers” (Crosson & Needles, 2014, p. 141). Wal-Mart uses this process throughout their stores. However, the main aspect Wal-Mart looks into when working with these suppliers is that the suppliers understand the customers needs, 260 million times per week around the world, and knowing how much of a product needs to be produces (Walmart, 2017). With the use of JIT, Wal-Mart is able to order products exactly when they are needed, which allows the stores to cut back on so much inventory piling up, which is great for the company, especially when it comes to selling produce, for example. The affect that JIT has on the vendors though, is that they simply need to be aware of how much each Wal-Mart they are supplying to will need. These vendors will need to understand the demand of their products in order to have them ready to ship as soon as the products are needed, so that they can be stocked and sold to customers.
In my opinion, I do not believe Wal-Mart’s use of JIT is crossing any ethical lines, but I do believe it is a good business practice, for this specific company. As they company advertises low prices at anytime, they are letting consumers know that whatever product they may be looking for is available at anytime. When vendors choose to align with Wal-Mart and supply products, they should be well aware of the business they are getting into and they have also made an agreement with the company to provide products as needed. If vendors are well prepared, they will have some work cells set up which are, “autonomous production line that can perform all required operations efficiently and continuously” (Crosson & Needles, 2014, p. 132).
Becoming a Supplier. (2017). Retrieved November 01, 2017, from https://corporate.walmart.com/suppliers
Crosson, S. V., & Needles, B. E. (2014). Managerial accounting(10th ed.). Mason, OH: South-Western Cengage Learning.
Our History. (2017). Retrieved November 01, 2017, from https://corporate.walmart.com/our-story/our-history