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Southwest Airlines Case Analysis

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...