Southwest Airlines Strategic Analysis

Topics: Southwest Airlines, Airline, Low-cost carrier Pages: 31 (9620 words) Published: June 1, 2009
Southwest Airlines Culture, Values And Operating Practices Essay retrieved from Case Study
Southwest Airlines: Culture, Values and Operating Practices (in Thompson, A. A., Strickland. A. J. and Gamble, J. (2005) Crafting and Executing Strategy (Fourteenth Edition), McGraw-Hill, New York, pages C-636– C-664).

The case study, prepared by Arthur A. Thompson, University of Alabama, and John E. Gamble, University of South Alabama, focuses on the rise to business prominence of Southwest Airlines, a regional airline with a low-cost no-frills approach.

Based on the case study, and on online and offline research into Southwest Airline’s current state, complete the following Tasks:

Task 1 - 20 Marks
Provide an analysis of the company’s:
• Potential resource strengths and competitive capabilities • Potential resource weaknesses and competitive deficiencies • Potential market opportunities
• Potential market threats
at the time this assignment is undertaken.
Select suitable analytical tools from the text-book/course to help you structure your findings.

Task 2 - 20 Marks
On the basis of the critical factors identified in Task 1.
a) Draw conclusions concerning the company’s overall situation. b) Suggest actions for improving the company’s strategy.

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”. Identify the various Human Resource practices of Southwest Airlines that collectively show the company’s focus on its employees. State whether or not these practices have contributed to proficient execution of the company’s business strategy, right up to the present day. (Note: you will have to do some research to find out the company’s latest state of affairs). Do you consider the staff and management of Southwest Airlines to be a “prime source of competitive advantage”? Give your reasons for or against this point of view.

Task 4 - 20 Marks
The Southwest Airline’s business model has been copied by regional airlines in other parts of the globe. Identify one other successful regional airline (outside the United States of America) and examine the way that company operates. It can be a company in your own region, or elsewhere e.g. easyJet in the UK and Europe.

Answer (in essay form) the following:
a) In what ways is that company’s market similar or dissimilar to Southwest Airline’s market? b) What aspects of the regional airline’s business model are similar or dissimilar to the way Southwest Airlines operates? 

Task 5 - 10 Marks
Assemble your work into one business report-style document, with: • Table of Contents
• Reference List
• Appendices and
• Bibliography
where relevant.

Task 1
Low-cost carrier, is so-called no-frills airline or budget airline is an airline that adopts the low cost strategies in all respects of business, such as the opening of airlines, choice of secondary airport, ways of selling tickets, and on-board service. 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. 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. Low-cost carrier had changed the traditional idea of air travel, is a high level of consumption, into a speedy and economic air travel. The concept originated in the United States, follow by Europe and subsequently to Asia.

Not every low-cost carrier implements all of the above strategy. Some try to differentiate themselves with...

References: 1. The Guardian, Ryanair cuts reclining seats; suitcases next to go, Sydney Morning Herald, 17 February, 2004, viewed 9 February 2007, 
3. Thompson A A, Strickland A J, 2004, Strategy Management Concepts and Cases, 13th edn, McGraw-Hill, Irwin.
4. Moore J, 2006, Tribal Knowledge: Business Wisdom Brewed from the Grounds of Starbucks Corporate Culture, Kaplan Business, United Stated of America.
5. Freiberg K L and Freiberg J A, 1996, Nuts! Southwest Airlines ' Crazy Recipe for Business and Personal Success, Bard Press, United Stated of America.
6. Gross T S, 2004, Positively Outrageous Service: How to Delight and Astound Your Customers and Win Them for Life, 2nd edn, Kaplan Business, United Stated of America.
7. Sunoo B P, 1995, How fun flies at Southwest Airlines, Personnel Journal, June 1995, Vol. 74, No. 6, pp. 62-73.
11. Bennett, Randall D. and James M. Craun, 1993, The Airline Deregulation Evolution Continues: The Southwest Effect, Office of Aviation Analysis, U.S. Department of Transportation, May 1993, 
17. Gross T S, 2004, Positively Outrageous Service: How to Delight and Astound Your Customers and Win Them for Life, 2nd edn, Kaplan Business, 1 September 2004, United Stated of America.
18. Robert Walberg, 2007, Southwest: Great airline, bad investment, Street Patrol, 11 Jan 2007, 
Appendix A
Southwest Airlines begins new service to Manchester, New Hampshire on June 7, 1998.
Southwest Airlines begins new service to Islip, New York on March 14, 1999 and to Raleigh-Durham International Airport on June 6, 1999
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