Southwest Airlines Case Analysis

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EXECUTIVE SUMMARY

Southwest Airlines provides short haul, high frequency, point-to-point, low-fare services to and from 58 cities across the United States. The company is known for its low-cost fares and superior customer service in the airline industry. The company was started in 1971 with a motto still lived by today, "If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline." This motto has been effective for the company because they recently reported their 58th straight quarterly profit.

SWOT Analysis

The SWOT analysis describes the internal strengths and weaknesses, opportunities and threats of a company. The strengths of Southwest include its market leadership, its low-cost business model, and its strong financial performance. Weaknesses are the poor short-term liquidity situation, having only one established alliance, and the declining passenger revenue yields. Opportunities for the company include its new services, the new code-sharing agreement with ATA Airlines, and the overall positive outlook for the airline industry. Threats to Southwest include the increasing jet fuel costs, uncertainty in demand, and an increase in competition.

Corporate and Business-level Strategies

Southwest's corporate level is to focus on obtaining more of the low-fare market of the airline industry rather than to enter into other aspects of the airline industry. The business level strategy is to continue focusing on the current customer market, that which is looking for a low-cost airline to get them where they want to go at a reasonable price. Southwest is only looking to improve its services to make each customer's experience the best it can be.

Recommendation

Over the last thirty years, Southwest Airlines has been very successful and continues to grow and develop. Southwest has managed to stay ahead of its competition by implementing new products and services into the industry. Southwest has also maintained its mission to offer its customers the lowest fares possible and has been very profitable. The recommendation for your investment of $5 million is to invest all the money into Southwest Airlines.
Southwest Airlines is known to be a very successful company, but is it a company you would want to invest in? The following research will determine the reasons Southwest has been so successful and why. We will follow the history of the company to find out what the internal strengths and weaknesses and the external opportunities and threats are today. Using this information we will also analyze the company's corporate level-strategy, business-level strategy and the systems of structure and control. This information should draw a confident conclusion on whether Southwest Airlines will be successful in the future. History, Development, and Growth

In 1971, Rollin King and Herb Kelleher started Southwest Airlines, headquartered in Dallas, Texas. Their motto was, "If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline." More than thirty years later that motto is still in effect and seems to have been proven very successful. The first services were between Dallas, Houston, and San Antonio. Southwest carried its millionth passenger in 1974 and by 1977 was carrying its five millionth passenger (Southwest 2005). Also in 1977, Southwest was first listed on the New York Stock Exchange. Southwest, in 1984, was ranked the number one airline in terms of customer satisfaction for the fourth consecutive year. In May of 1988 the company won the coveted Triple Crown. It is an award for the best on-time record, best baggage handling, and fewest customer complaints. In 1990 the company reached one billion dollars in total...
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