In Week 4 you identified a generic strategic direction for a selected organizati

Question

In Week 4 you identified a generic strategic direction for a selected organization (Focused cost leadership strategy for Southwest Airlines); in Week 5 you narrowed down that strategic direction and identified possible alternative strategies and then narrowed those alternatives down to ONE specific strategy to implement for either Southwest or Subway. (Week 5 strategy was: market development and market penetration into the European airline markets, by either self development or an acquisition of a European low cost airline) Using that specific strategy, identify what type of organizational design would best support that strategy. Provide a high level overview of the organizational design – be sure to fully explain the design and why it was selected to support the strategic direction and, more importantly, the specific strategy to be implemented.

Explanation / Answer

For South West Airline to enter into European Market, I will suggest for market development and market penetration into the European airline markets by acquisition of a European low-cost airline. I suggest this because though South-West Airline is well established in its own geographies of operation it will be new for it to foray into European Market. There is some domestic clause for international carrier in this territory. If South-West Airline acquire any low-cost carrier then it can comply with the regulatory authority and can get the expertise of the domestic carrier. These JV(Joint Venture)can bring synergy and scale of operation which can turn into more profitability and less burn rate.

For this strategy to be implemented, they should devise a well established organizational design. The CEO of the new Joint Venture should report to the CEO of South-West airline group. There should be a line and staff organizational structure in all department. The individual department head should report to the CEO and control their vertical. To assist the CEO in decision making and strategy formulation a team of strategist should be appoint who will work as staff agency. They should have coordination with all the line agency to control the cost and know the process.

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