The company does not only boast a highly competitive pricing strategy, but also a premium people management approach that provided the company enduring success.
Southwest’s most powerful organizational competency—the ‘secret ingredient’ that makes it so distinctive—is its ability to build and sustained high-performance relationships among managers, employees, unions, and suppliers. These relationships are characterized by shared goals, shared knowledge, and mutual respect (Gittell, 2005, 52).
To operate, airlines require physical resources, such as airplanes, airstrip, pilots, cabin crew, etc. These physical resources can be accessed by numerous companies in the marketplace. hence it is hard to develop them as a sustainable competitive advantage. Even the availability of unprocessed or capital resources, before a great entry barrier, is more attainable due to the growth of international markets (Lovelock &. Wright, 2002).
However, it is the intangible assets that sustainable competitive advantage rests. Accrued experience or knowledge throughout the years, or referred to as corporate culture, is very hard to imitate (Parker, 2007). Companies like Apple, Coca-Cola, and General Electric rise from a venture of time and effort. These are springs of competitive advantage. The task is to determine the factors that strengthen this competitive advantage and the way toward sustainability (Parker, 2007). In fact, it is not the resources, regardless of how inimitable or intangible they are, that best generate competitive advantage. the solution toward sustainable competitive advantage is the way these resources are used (Gittell, 2005). Simply, the failure or success of a company relies on how the people within it utilize these resources. Basically, the competitive advantage of a company is its people.
The quality of management, the manner.