SOUTHWEST AIRLINES STRATEGIC MANAGEMENT CASE STUDY

Topics: Financial ratio, Strategic management, Airline Pages: 26 (7725 words) Published: May 26, 2014
STRATEGIC MANAGEMENT
CASE STUDY

SOUTHWEST AIRLINES

SÜLEYMAN SİNAN ÖZTÜRK

EBS 5103
STRATEGIC MANAGEMENT
INSTRUCTOR: DR. AHMET BEŞKESE

BAHÇEŞEHİR UNIVERSITY
May 2013

Contents
CONTENTS ................................................................................................................................... 2 INTRODUCTION: ......................................................................................................................... 3 THE HISTORY: .............................................................................................................................. 3 CASE ANALYSIS: PESTEL FRAMEWORK................................................................................. 5 CASE ANALYSIS: MICHAEL PORTER’S FIVE FORCES FRAMEWORK ................................. 7 CASE ANALYSIS: COMPETITIVE PROFILE MATRIX .............................................................. 9 CASE ANALYSIS: VALUE CHAIN ANALYSIS ......................................................................... 10 FINANCIAL ANALYSIS ............................................................................................................. 12 SWOT ANALYSIS ....................................................................................................................... 16 SPACE MATRIX .......................................................................................................................... 18 TOWS MATRIX: .......................................................................................................................... 21 QSPM: QUANTITATIVE STRATEGIC PLANNING MATRIX ................................................... 22 FINAL EVALUATION AND RECOMMENDATIONS ................................................................ 24 BIBLIOGRAPHY ......................................................................................................................... 26

INTRODUCTION:
In this strategic analysis report, I will try to differentiate, speculate and integrate the evaluation of Southwest Airlines (SWA).
First, I will summarize the situation of SWA, in order to see the big picture better. Then I will evaluate the analysis and speculate in order to clarify the uncertainties. Finally, I will integrate the whole information to give a unique strategy for the company.

THE HISTORY:
The company was founded by a San Antonio entrepreneur John Rolling and Herb Kelleher, A New Jersey born lawyer in 1967. In the early years, they have fought with the major airline carriers legally in order to take off the planes. They need to perform extreme lobbying in the early years which advantageously created a warrior personality within the employees. The early executives of the firm were veterans of airline industry who were Lamar Muse from Trans Texas and Howard Putnam from United Airlines. After them Herb Kelleher took the CEO position and expanded the company to $270 million in revenue.

They have dominated the airline industry and achieved financial profit for consecutive 31 years. The primary focus of the business model for the company was to reduce the cost. They have basically eliminated the frills served in the trip which was luxuriously offered by the competitors. They have reduced cost of maintenance by using one type of efficient plane basically Boeing 737. They have avoided to arrange flight for complex airports and stayed with the less popular airports to achieve faster turnarounds. They had used no ticket numbers which reduced the time and workforce in the boarding time. They have been the very first company to adopt online booking to reply the developing necessities of the customers.

Warning Bells are Ringing for SWA
In the last years, they are facing some challenges which are shaking the stability of the company performance. The management of the company has changed and the new management requires some times to sustain team work and fun culture within the company. The former...

Bibliography: Morning Star. (2013). Retrieved May 15, 2013, from Growth Profitability and Financial Ratios for
Southwest Airlines: http://financials.morningstar.com/ratios/r.html?t=LUV
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