Southwest Airlines has long been one of the standout performers in the U.S. airline industry. It is famous for its low fares, which are often some 30 percent beneath those of its major rivals. Southwest operates somewhat differently than many of its competitors. While operators like American Airlines and Delta route passengers through hubs, Southwest Airlines flies point-to-point, often through smaller airports. By competing this way, Southwest has found that it can reduce total travel time for its passengers. They are not routed through hubs, and spend less time on the ground, something that most passengers value. This boosts demand and keeps its planes full.

This opening case illustrates a number of ways in which Southwest Airlines utilizes the four main building blocks of competitive advantage: efficiency, customer responsiveness, innovation, and reliable quality. From your perspective, what is the link between Southwest Airlines business model, strategy, competitive advantage, and profitability? What are Southwest Airlines distinctive competencies and resources and capabilities to make it happen? How does this compare with another airline with which you are familiar? Please give examples of this comparison.