Southwest Airlines Strategic Plan

Southwest Airlines’ Strategic Management

Chungsun Park
Nonhanhla Nene
Mohit Khatri
Junbai Ma

HOS 407 – Strategic Management
Dr. Richard L. Valente
12/12/2011
Table of Contents
Executive Summary 3
Mission, Vision, Values, and Goals 4
Organizational Structure 5
Management Process and Roles 6
Porter’s Five Forces 6
Threat of New Entrants 6
Threat of Substitute Products 8
Bargaining Power of Suppliers 9
Bargaining Power of Buyers 10
Rivalry 11
The Roots of Competitive Advantage 12
Distinctive Competencies 12
Capabilities 15
Competitive Advantage, Value Creation, and Profitability 16
The Value Chain 19
Primary Activities 19
Support Activities 20
The Building Blocks of Competitive Advantage 21
Quality 21
Innovation 22
Customer Responsiveness 23
Analyzing Competitive Advantage and Profitability 24
SWOT Analysis 28
Business Level Strategy 29
Business Strategies 29
References 33

Executive Summary

Due to the economic crisis, fuel prices, and act of god environmental crisis, airline industries have suffered in the last ten years. However, these major threats do not seem to threaten Southwest Airlines. In fact, Southwest has been achieving consistent annual profitability for 38 consecutive years. (“Annual Report,” 2010)
The primary objective of Southwest Airlines is to care, respect, and treat all employees (nearly 35,000) fairly and equally because Southwest has a strong belief that their employees are the key to success; “employees come first” (“Southwest Airline Employee Motivation,” 2011). With valuable employees, Southwest Airlines is one of the largest and most successful low-cost airlines in the United States. With valuable employees, Southwest Airlines has differentiated themselves from all of their competitors, providing the lowest fares with the highest quality of customer service.  
In order to increase customer satisfaction and maintain the lowest fares, Southwest Airlines has been... [continues]

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