March 30: What Is Strategy? (Part 2 of 2)
Let’s look at an example (from 1996): Southwest Airlines. Strategy: to serve price- and convenience-sensitive travelers.
Source: Harvard Business Review (pdf)
Published: November 1996
What Is Strategy? (Part 2 of 2)
Let’s look at an example (from 1996): Southwest Airlines.
Strategy: to serve price- and convenience-sensitive travelers.
Choices:
Fast 15-minute turnarounds at the gate
No in-flight meals
No assigned seats
No interline baggage checking
A standardized fleet of Boeing 737 aircraft
No large airports
Does not fly long distances
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So reflecting back on part 1 of this discussion on strategy, part 2, in addition to being a great example, demonstrates a couple key principles of effective strategy. It's clear that Southwest made choices about what it was not going to be or do. In order to achieve its strategic objective, Southwest was purposefully not addressing other markets. Prospective customers define Southwest's position by what it is NOT doing. Focus wins. Focus means choosing not to do something in favor of achieving something else. Southwest used the negative 5 times out of 7 to express what tactics would be used to achieve its strategy. Effective strategy needs to make it clear what you're not doing more than what you are doing! That's counterintuitive but essential in my experience. If your strategy is to be all things to all people... it will fail.