Disruptive innovation: The Southwest Airlines case revisited
Southwest Airlines has been the subject of hundreds of books and thousands of articles over the years. How can there possibly be anything new to say?
Southwest Airlines’ “low cost carrier” (LCC) model captured the attention of professionals and academics across the globe. Flying only one type of plane, having a point-to-point route structure, providing one class of service and not having meals and assigned seats are the defining attributes of this model.
In his 1996 Harvard Business Review article “What is strategy?” Michael E. Porter provided a detailed explanation of the advantages this strategy presents. He focused on how the LCC model is relatively immune to competitive responses due to fewer operational costs for its brand of services and how, unlike major hub-and-spoke carriers, it is not committed to operations that include tradeoffs between the performance and cost that determines customer value.
In Disruptive innovation: the Southwest Airlines case revisited, Michael E. Raynor, director, Deloitte Consulting LLP, discusses aspects of the LCC model that explain their significant financial performance. He focuses on Southwest Airlines’ growth through disruption across different timelines of the company life cycle.