Digital Business Management Report on southwest.com


Essay, 2012
11 Pages, Grade: C

Excerpt

Table of Contents

1. Introduction

2. Website (southwest.com) Evaluation

3. Online Business Model
3.1. Product Innovation
3.1.1. Online Value Proposition
3.1.2. Capability
3.2. Financials
3.2.1. Online Revenue Model
3.3. Infrastructure Management
3,3,1, Resources
3.3.2. Activity Configuration
3.3.3. Partner Network

4. Website’s Customer Relationship Management (e-CRM)
4.1. Information Strategy
4.2. Distribution Channel
4.3. Trust & Loyalty
4.4. Web Portal

5. Recommendations

6. References

7. Appendices

7.1. southwest com-Homepage

1. Introduction

This report deals with field of Digital Business Management and the chosen company for this purpose is the leader of US Low Cost Carrier (LCC) called Southwest Airline, And for completion of this report southwest.com is critically analysed. This report is composed of four section. In very first section, southwest.com is analysed in term of information systems implemented by the company. In the second section, Southwest Airline’s online business model is carefully observed and analysed. Then in the third phase, Southwest Airlines e-CRM is being evaluated in identifying its customer acquisition and customer retention policy. And in forth and the last section few recommendations are made to strengthen its digital business strategy.

2. Website (southwest.com) Evaluation

With reference to the website (southwest.com) of United States no.1 Lowe Cost Carrier called Southwest Airline. It has been cleared that southwest.com is the central component in company’s operations as about 70% of their tickets are sold through this platform. And no doubt in saying that the Southwest Airline’s website is the combination of different information systems as It allows to perform operations like booking flights, managing flights, frequent flyer program and made them to offer complementary products and services through their business Partners. And all these operations are possible as their website is connected to different systems which are Online Flight reservation system, customer management system, flight management system and Analytics & content management system. So one can say that major portion of Southwest Airline’s operations is performed through its website.

We all knew that the Airline business process depend heavily on its reservation system. So as we know that Southwest Airline has adopted Direct Sales model in order to reduce the transaction (agent) cost. And for this purpose they have implemented online reservation system offered by Sabre named as SabreSonic Res. This system uses advanced technologies which allow customers to make reservation online and thus helping Southwest Airline in making competitiveness sustained (Sabre, 2011)

The Southwest Airline online reservation system has three important which explained below:

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a) Reservation Engine: It provides assistance in making online transactions with customers.
b) Inventory Engine: It helps Southwest Airline in managing flight fares, scheduling flights.
c) Departure Control System: It is responsible for making final purchase which in term of issuing boarding to the specified passenger with the unique PNR serial number.

So now, we are in a position to say that Southwest Airline website’s interface connected the SabreSonic Res to perform all above interconnected operations which benefits both sides (Customers and Southwest Airline). This online reservation system can be categorized as TPS (Transaction Processing System) and DSS (Decision Support System). TPS in a sense that it allows website to enable both operations (online booking and customer transaction) which are considered to be as Southwest Airline’s operation activities. DSS in a sense that it also stored Customer’s information in the company’s database which will be proved to be beneficial for them in formulating and implementing company’s new business strategy.

Southwest.com also uses and connect with the Revenue Management System offered by IBM named as IBM AS/400 which assist company’s middle management by displaying company’s current performance obtained from the Reservation Engine (globalthesis.com, 2004). And this information allows company in identifying sales opportunity which will results in increasing company’s revenue. So one can say this system is a type of Management Information System (MIS).

Southwest.com is also connected with another system called SalesServer which is designed by PRISM Group (Edward, 2010). This system accommodates company’s executive level management as it uses advanced tools to generate graph in drill to detail format. This system is critical to the company as it will also help them in making Investment decision and this system falls in the category of Executive Support System.

We can say that Southwest.com is a website that is connected to three different kinds of Information Systems for accommodating three different management levels within a company. These systems allows Southwest Airline to make its competitive edge sustainable and allows the company to serve customers in the effective manner through the integration of company’s different departments.

3. Online Business Model

Southwest Airline online business model comprises of four important aspects which are listed and explained below (Markides, 2000):

Product Innovation: It focused on the types of products and services Southwest Airline is offering to their customers.

Financials: How much and how Southwest Airline is earning.

Infrastructure Management: It focused on the Southwest Airline’s value configuration system.

E-Customer Relationship Management: It emphasis on the type of customers Southwest Airline is targeting.

In this section first three aspects are briefly discussed while the e-CRM will be discussed in the later section.

3.1. Product Innovation

This factor will inclined on the company’s offerings (Products & Services). Target Customer Segment

As we knew that the Southwest Airline is a Low Cost Carrier company so the customers they are targeting are those who are price conscious.

3.1.1. Online Value Proposition

Southwest Airline Online Value Proposition is expressed by its Founders:

3.1.2. Capability

The Capability factor emphasize on the ability of the company in utilising its assets in generating sales for the company and also which results in superior customer services. It has been observed and analysed that the Southwest Airline is very effective and efficient in utilizing its assets.

3.2. Financials

3.2.1. Online Revenue Model

a) Direct Selling: About 70% of Southwest Airline sales takes place through its website. Sp it is being cleared that Southwest Airline relied mostly on direct selling which cut short the agent cost thus making Southwest Airline to align its Revenue building policies with its business strategy.
b) Affiliate Model: Southwest Airline Vacation affiliate program is the prominent factor in this regards as Southwest Airline charging commission from its partners through the online offering of conventional products (Hotel Reservation & Car Rental) and is prove to be as the second biggest source of Southwest Airline in revenue generation.
c) Advertising: This is least factor in Southwest Airline online revenue generation. And Southwest.com generates online revenue by selling advertising space to other willing companies for the purpose of enhancing their partners product or service (offerings) awareness.

3.3. Infrastructure Management

This aspect will focus on the Southwest Airline’s value configuration system which not only helps Southwest Airline in delivering its products or services in a best specific manner but also helps them in acquiring and retaining their customer range through Customer Relationship Management.

3,3,1, Resources

This factor deals with the types of resources the company have had in creating and enhacing the value of the firm. For this purpose Southwest Airline has top three resources which are listed below:

i. Employees (Explicit Knowledge)
ii. Southwest.com (Implicit Knowledge)
iii. Boeing 737 (Explicit Knowledge)

3.3.2. Activity Configuration

This factor deals with value creating aspects of the company for which customers are willing to pay. This reflects to the company’s primary activities and support activities its business

[...]

Excerpt out of 11 pages

Details

Title
Digital Business Management Report on southwest.com
College
University of Bedfordshire
Course
MSc Finance & Business Management
Grade
C
Author
Year
2012
Pages
11
Catalog Number
V281114
ISBN (eBook)
9783656748588
ISBN (Book)
9783656748175
File size
490 KB
Language
English
Tags
digital, business, management, report
Quote paper
Junaid Javaid (Author), 2012, Digital Business Management Report on southwest.com, Munich, GRIN Verlag, https://www.grin.com/document/281114

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