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
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
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