South West Airlines a Review

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SOUTHWEST AIRLINE ANALYSIS

Contents
SOUTHWEST AIRLINE CASE STUDY4

INTRODUCTION4

PART 1: EXTERNAL ANALYSIS5

OVERVIEW5

MACRO-ENVIRONMENTAL ANALYSIS6

PESTEL Analysis6

Industry Analysis9

Five Forces Model Pictorial Representation9

Five Forces Analysis10

PART 2: INTERNAL ANALYSIS13

OVERVIEW13

SWOT ANALYSIS14

Strengths14

Weaknesses15

Opportunities15

Threats16

The VRIO Framework16

FINANCIAL ANALYSIS17

PART 3: CURRENT ISSUES AND CHALLENGES FACING THE COMPANY18

Mergers and Acquisitions18

Financial Outlay18

Legislation19

PART 4: STRATEGIC OPTIONS19

Ansoff Matrix19

The TOWS Matrix20

PART FIVE – EVALUATION OF STRATEGIC OPTIONS21

OVERVIEW21

PART 5: DESCRIPTION OF THE TOWS STRATEGY22

PART SIX – DESCRIPTION OF SELECTED STRATEGY23

PART 7: CONCLUSION24

REFERENCES26

SOUTHWEST AIRLINE CASE STUDY

INTRODUCTION

Southwest airline is based in the United States with its headquarters in Dallas, Texas, that mainly serves a domestic clientele in northern America. The company has grown from a few aircrafts at induction into the aircraft market, to a fleet of many domestic carriers that serve the larger domestic airline clientele. Started in 1971, Southwest Airlines started business with three Boeing aircrafts while serving three cities in Texas notably Houston, Dallas and San Antonio. Today the company serves 97 destinations in 41 states within the US, the District of Columbia the Commonwealth of Puerto Rico and six near international countries with a fleet of 694 Boeing jets (Southwest, 2009).

The company is now one of the United States biggest airline companies, offering low cost fares to their clients. The company offers the lowest combination of aircraft fares to its customers making it one of the most attractive airline carriers in the continent. The company boasts of in addition to the low fares a working staff that are reliable as well as a friendly customer service, a rich corporate culture that extends deep within the communities they work with. The company has grown mainly through acquisitions and mergers with other companies and has been described by Fortune Magazine as one of the most profitable companies of 2012 according to (Southwest, 2012). This report will undertake an intensive look at the internal and external influences that affect the company as well as the current issues and challenges the company is facing. Further the report will generate strategic options for the company as well as an evaluation of them while describing the selected strategy.

The main stakeholders associated with the company are the customers proven by the effort with which the company strives to ensure their comfort through consideration of pricing, as well as convenience offering many flights to various domestic locations offering the customers convenience. Other important stakeholders held in regard by the company are the employees of the company who are dedicated to working for the company, suppliers who continuously accord support to the company as well as the immediate community that the organization interacts with.

With relation to the strengths that the company possesses in the domestic airline industry the company can be assumed to be working in a cost leadership generic strategy (Porter 1980). The reasons for this are that as the company is operating with the low cost policy to its clientele, the company has the advantage of working with a wide and broad base of clients. The strength therefore for the company comes from working with the numbers of passengers that it ferries between destinations on a low cost policy.

PART 1: EXTERNAL ANALYSIS

OVERVIEW

An external analysis is often used by organizations in a bid to identify the threats and the opportunities that exist in a company’s environment. Opportunities and threats for...
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