The first successful low-cost carrier was Pacific Southwest Airlines in the United States, which pioneered the concept when their first flight took place on May 6, 1949. That is the Southwest airlines have not expanded its boundaries to the worldwide market to include other people. Nonetheless these are general characteristics, most of which apply to any given low-cost carrier. The flights are only meant for the customers within the local borders, within the United States. Southwest Airlines operates with a low-cost structure and achieves high returns on capital due to a unique business model and an efficient operational strategy. The company has made their airline fares comparable to the bus fares. In this regard, the company can reduce the effect of fuel prices by hedging their own oil purchases, and enhance better airline operations. Southwest Airlines operates with a low-cost structure and achieves high returns on capital due to a unique business model and an efficient operational strategy. Abstract This case analysis is an overview of Southwest Airlines which will explore its history in brief and timeline. We use cookies to give you the best experience possible. 3. Here is our analysis of the Southwest Airlines mission statement; Attracting and retaining customers by offering the highest quality of customer service In the current highly competitive airline industry, companies that compromise the quality of service are set on a path to failure. Southwest Airlines now has a market capitalization of $14 billion and is Southwest Airlines Case Analysis Case study analysis on Southwest Airlines case for Professor Kohn. STRATEGIC ANALYSIS OF THE CASE As a result, Southwest Airlines has been awarded the best in customer care services. At the Heart of Southwest Airlines Customer demand for our low fares was evident with an all-time quarterly record load factor of 85.4 percent for third quarter 2015. The company has up to 34,000 employees whose work is guided by the mission and vision statement. I will end the paper by highlighting my opinion on the Southwest Airlines’ vision and mission statement. Southwest Airlines SWOT analysis. The mission statement and vision statement indicate successful competitive positioning attributable to the business strengths and competencies shown in the SWOT analysis of Southwest Airlines Co., which involves low costs as a major strategic factor … About Southwest Airlines : Southwest Airlines is a major passenger airline based out of the U.S.A., headquartered in Dallas, Texas, which provides scheduled air transport in the United States and international markets near to USA. Abstract This case analysis is an overview of Southwest Airlines which will explore its history in brief and timeline. Using its low-cost, no-frill, customer friendly, point-to-point operational strategy, Southwest has been able to sustain considerable growth over the years and reported straight profits since its incumbent. Many carriers opted to launch their own no-frills airlines, such as KLM’s Buzz, British Airways’ Go, Air India’s Air India-Express and United’s Ted, but have found it difficult to avoid cannibalizing their core business. Southwest Airlines has a strong vision and mission. Survival and success in this industry for decades can only be attained by companies with impressive strategic plans and consistency in execution, such as Southwest Airlines.. [email protected] 804-506-0782 350 5th Ave, New York, NY 10118, USA. SWOT analysis is a strategic planning tool that can be used by Southwest Airlines managers to do a situational analysis of the company. Southwest Airlines tailor-made travelling rates to suit all their clients. Southwest’ s strategy, ... from analysis of Southwest airlines that effective . Another threat is the continual rise in the price of fuel. An analysis of Southwest Airlines strategic controls has been conducted in order to determine if these controls match, and or enhance, the companies design and strategy. Task 4 – 20 Marks The Southwest Airline’s business model has been copied by regional airlines in other parts of the globe. Southwest Airlines Strategic Analysis On the basis of the critical factors identified in Task 1. a) Draw conclusions concerning the company’s overall situation. The success of the company includes integration of all the forces, which build up the company. In short, Southwest airlines can say that the current paper thus investigates to what extent changes in culture, costs and competition were related to leadership change in Southwest Airlines. Southwest Airlines applied a strategy that facilitated its growth in the airline industry. As a result, Southwest airlines have had a large market share. (Note: you will have to do some research to find out the company’s latest state of affairs). Southwest Airlines has been a strong growth company over the last 35 years. University. The low cost of travelling by Southwest Airlines has so far made the company gain competitive advantage over its rivals. It is effectively used in building strategies for the organization to maintain its competitiveness in the market. The company was incorporated in 1967 and is headquartered in Dallas, Texas. The current strategy of Southwest Airlines. Texas. Labor CostsThe labor costs for Southwest typically accounts for about 37% of its operating costs. That is Southwest Airlines have cantered the mission’s purpose on its employees. In addition, the company has an upper hand as it has placed strategies well, which have ensured that there is complete control of all costs that entails the airline business. Southwest Airlines is mainly focused on ensuring that customers are satisfied and happy about the service given. Southwest Airlines Co.’s operations as one of the biggest low-cost carriers in the world are a showcase of how the company’s strategies are appropriate in addressing the internal and external strategic factors identified in this SWOT analysis. This is an industry leading figure. Southwest airlines have a general service class. The airline also observe time in all flights. Although, the low-fare strategy has been neglected, it is a strategy that is promising in terms of making profits. Southwest Airlines Strengths 1. b) Suggest actions for improving the company’s strategy. The acronym Southwest Airlines SWOT stands for strength, weakness, threats and opportunities. Mgmt & Organizational Behavior (MGMT … Balanced Scorecard and Strategic Analysis of Southwest Airlines Essay Sample 🎓Southwest Airlines Co. provides low-fare. However, Southwest Airlines that began service in 1971 and has been profitable every year since 1973. Task 5 – 10 Marks Assemble your work into one business report-style document, with: • Table of Contents • Reference List • Appendices and Bibliography where relevant. The company marketers have mastered their clients, and as a result, the company has managed to withhold its customers. Southwest Airlines has weaknesses, which lower the performance of the airline services. Some are respectably successful. Summary. * All first-time users will automatically receive 15% discount, Comparative Analysis of Guggenheim Bilbao and Guggenheim New York City, Analysis of Agriculture on Production Land. Southwest Airlines : Strategic Analysis 2245 Words | 9 Pages. As a result, the Southwest Airlines have no favors, and no first class services compared to the other traditional airline services. Cost leadershipThe generic strategy adopted by Southwest airlines is cost leadership. The Southwest Airlines has opportunities which it can use as a way of developing the company. With this strong strategy, Southwest Airlines has obtained a competitive advantage over its rivals. It currently has $3.3 billion in the form of cash and short term investments. Southwest Airlines has so far had many passengers due to its low travelling cost. We Will Write a Custom Case Study SpecificallyFor You For Only $13.90/page! The vision and mission of Southwest Airlines speaks well of the company’s future and its employees. 2. Southwest Airlines applied a strategy that facilitated its growth in the airline industry. Concluding this strategic analysis, this essay recommends Southwest airlines to implement strategic options and embark upon growth and diversification strategies which reaffirm the company’s aforementioned core competencies and further advance its internal strengths. Southwest Airlines has been a strong growth company over the last 4 decades. In addition, the company does not offer exceptional services in terms of class. As an airline servicing company in today’s market, the threats are worth noting. Low cost carriers developed in Asia and Oceania from 2000 led by operators such as Malaysia’s Airasia, and Australia’s Virgin Blue. Southwest Airlines is currently a major airline in the United States domestic market, looking for growth and expansion opportunities. Running Head: STRATEGIC ANALYSIS 15 “Three years after the merger, Southwest’s operating costs are still well below those of other major airlines including top competitor, Jet Blue Airlines. Today, the airline service four hundred Boeing 737 aircrafts, which operate in 59 cities, in the Unites States. It is a useful tool that is widely used for strategic planning and management in many organizations. An analysis of Southwest Airlines strategic controls has been conducted in order to determine if these controls match, and or enhance, the companies design and strategy. This is a cost that can affect all other controlling costs of the company as it is a necessity in the business. Here, at ACaseStudy.com, we deliver professionally written papers, and the best grades for you from your professors are guaranteed! Perhaps the most critical element of the successful low-fare airline business model is achieving significantly higher labor productivity. Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations". 1. In 2006, new low-cost carriers were announced in Saudi Arabia and Mexico. Strategic management: Southwest airlines case study Current strategy (Including current use of technology) Southwest Airlines’ dominance in the airline industry is largely attributed to its competitive fair prices, which are the lowest in the industry. Despite its low costs on fare, the company has managed to maintain its profit margin due to the aspect of cost control. For instance, the terrorist attack that took place in September, 2011. A SWOT analysis is a strategic planning method that helps a business understand itself better and make plans to move forward. Identify the various Human Resource practices of Southwest Airlines that collectively show the company’s focus on its employees. What Is the Macro Environment in Business Analysis? From 2001 to 2003, when the aviation industry was rocked by terrorism, war and SARS, the large majority of traditional airlines suffered heavy losses while low-cost carriers generally stayed profitable. Its consistent profitability and balance sheet strength have resulted in the airline holding the position of the only US airline to achieve investment grade status until Alaska Air Group secured that coveted position earlier in 2014. The company has managed to attain competitive advantage over its competitors in the market. Fuel has today become a factor that may hinder the progress of an airline service. Do you consider the staff and management of Southwest Airlines to be a “prime source of competitive advantage”? The company has used strategies, which are cost effective. The current strategy of Southwest Airlines. The company has not utilized e-marketing as a way of enhancing marketing. 1. For instance, single type of airplane, simple fare scheme, direct sales of tickets, unreserved seating, without many traditional passenger services, use secondary airport, short flights, fast turnaround times, simplified routes with point-to-point transit, low labor cost with multiple roles and etc. Task 3 – 30 Marks Answer (in essay form) the following: It has been said that “talented people in possession of superior intellectual capacity are not only a resource that enable proficient strategy execution but also a prime source of competitive advantage”. Southwest Airlines Co. is a major United States airline headquartered in Dallas, Texas, and is the world’s largest low-cost carrier. While the airline industry has suffered significant losses, Southwest Airlines have gained a significant market share. For starters, South America offers an unsaturated market and can be a perfect steppingstone for Southwest’s global expansion. 5 pages, 2330 words. The company offers low cost flights with no frills providing the most convenient way to travel between cities within 500-1000 miles range. Acasestudy.com © 2007-2019 All rights reserved. Filed Under: Business plans. Here is the SWOT analysis of Southwest Airlines Co. which is an airlines company primarily based in the United States of America. According to a recent HBS Case Study, southwest airlines is the “most heavily unionized” US airline (about 81% of its employees belong to an union) and its salary rates are considered to be at or above average compared to the US airline industry. Southwest Airlines : Strategic Analysis 2245 Words | 9 Pages. Currently, the airline industry is undergoing remarkable transformation due to different market forces such as intense competition and an increase in the intensity of competition. Balanced Scorecard And Strategic Analysis Of Southwest Airlines. It is effectively used in building strategies for the organization to maintain its competitiveness in the market. Gary C. KellyChairman, President, and … The concept originated in the United States, follow by Europe and subsequently to Asia. Most successful low-cost carriers try to offer a modicum of additional benefits, such as better on-time performance or more legroom. The Southwest Airlines SWOT analysis is a good example to illustrate how a SWOT analysis can be a helpful tool for any business. Southwest airlines two (1) 1. It is important here to notify that the current section primary analysis the strategic management of Southwest Company before changes in leadership occurred. Strategic Analysis Of Southwest Airlines Case Study Management Essay Published: 23rd March, 2015 Last Edited: 23rd March, 2015 This essay has been submitted by a student. The main focus on their vision and mission is to offer the best services to its clients. Identify one other successful regional airline (outside the United States of America) and examine the way that company operates. 1(888)302-2445 With such an opportunity, the company can introduce its service to the international market. The company operates from its local offices. There is a threat of both internal and external security. The airlines are bound on routes that have high demand. It was the only domestic airline with to receive an investment grade credit rating from credit rating agencies- S&P, Moodys and others. Give your reasons for or against this point of view. The company structure, culture, and human resources have been taken into consideration. The discussion will focus on strengths, weaknesses, opportunities, and threats of the strategy used. It is a handy technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Southwest Airlines is … Answer (in essay form) the following: a) In what ways is that company’s market similar or dissimilar to Southwest Airline’s market? The main target is to make airline services economical and available to all people. It has the best customer service and relations team that is well trained and equipped to serve clients. It can be a company in your own region, or elsewhere e. g. easyJet in the UK and Europe. For holiday destinations, low cost airlines also compete with seat-only charter sales. b) Suggest actions for improving the company’s strategy. 3. Many regional Airlines are now following the low cost strategy of Southwest Airlines to capture their market as fast as possible. Southwest Airlines Co. is a major United States airline headquartered in Dallas, Texas, and is the world’s largest low-cost carrier. The overall success of Southwest Airlines has been a result of the strategies made by the company. The airline was established in 1967 by Herb Kelleher as Air Southwest Co. and adopted its current name, Southwest Airlines Co., in 1971, when it began operating as an intrastate airline wholly within the state of Texas, first flying between Dallas and San Antonio. It was started by with only three airplanes. Such a strategy will cut down the price to a lower level and then the cost they have saved will benefit the passenger, and it will help to achieve the win-win aspect. civil air transit. The main target is to make airline services … STRATEGIC ANALYSIS OF THE CASE Southwest Airlines has grown from a small Texas carrier in 1971 to the nation’s fourth largest airline. By Mukund Srinivasan. 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