Free Strategic Analysis of Southwest Airlines Essay Sample
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Southwest Airlines began in 1971. It was started by with only three airplanes. Today, the airline service four hundred Boeing 737 aircrafts, which operate in 59 cities, in the Unites States. While the airline industry has suffered significant losses, Southwest Airlines have gained a significant market share. In this regard, this paper will discuss the strategic choices that have enhanced growth in Southwest Airlines. The discussion will focus on strengths, weaknesses, opportunities, and threats of the strategy used. I will end the paper by highlighting my opinion on the Southwest Airlines’ vision and mission statement.
Southwest Airlines applied a strategy that facilitated its growth in the airline industry. Southwest Airlines tailor-made travelling rates to suit all their clients. Southwest Airlines has so far had many passengers due to its low travelling cost. The main target is to make airline services economical and available to all people. The company has made their airline fares comparable to the bus fares. As a result, the Southwest Airlines have no favors, and no first class services compared to the other traditional airline services (Gittell 2003). However, the clients are given the best service available.
Southwest Airlines has a strong vision and mission. The main focus on their vision and mission is to offer the best services to its clients. In this regard, the company has devoted its efforts in making sure that their staff members deliver the best services to their clients friendly and welcoming. As a result, Southwest Airlines has been awarded the best in customer care services. It has the best customer service and relations team that is well trained and equipped to serve clients. The company has up to 34,000 employees whose work is guided by the mission and vision statement.
The company has used strategies, which are cost effective. Southwest Airlines Company is the leader in the management of costs. Despite its low costs on fare, the company has managed to maintain its profit margin due to the aspect of cost control. Most of the company’s costs have been minimized e.g. there are no luxuries that are given to the traveller while on board. The airline also observe time in all flights. Southwest Airlines has also strategically chosen its destination points. The airlines are bound on routes that have high demand. With this strong strategy, Southwest Airlines has obtained a competitive advantage over its rivals.
Pricing has so far been one of the strategies that have successfully worked in any industry. Although, the low-fare strategy has been neglected, it is a strategy that is promising in terms of making profits. Southwest Airlines has so far utilized this principle of maintaining low prices. The company marketers have mastered their clients, and as a result, the company has managed to withhold its customers. The low cost of travelling by Southwest Airlines has so far made the company gain competitive advantage over its rivals. In addition, the company has an upper hand as it has placed strategies well, which have ensured that there is complete control of all costs that entails the airline business. This has guaranteed the continuous growth of the profit margins (Kelly 2009). As a result, Southwest airlines have had a large market share.
Southwest Airlines has weaknesses, which lower the performance of the airline services. The flights are only meant for the customers within the local borders, within the United States. The company operates from its local offices. The company has not utilized e-marketing as a way of enhancing marketing. That is the Southwest airlines have not expanded its boundaries to the worldwide market to include other people. In addition, the company does not offer exceptional services in terms of class. Southwest airlines have a general service class. Due to its low fare, the travellers are not offered any meals except a few snacks.
The Southwest Airlines has opportunities which it can use as a way of developing the company. There are other places where Southwest airlines can introduce its services. With such an opportunity, the company can introduce its service to the international market. Southwest Airlines can have a business partnership with another. That is the company can have a contract with another company which they can incorporate their services to enhance productivity in the market, and enhance customer satisfaction.
As an airline servicing company in today’s market, the threats are worth noting. There is a threat of both internal and external security. For instance, the terrorist attack that took place in September, 2011. Another threat is the continual rise in the price of fuel. Fuel has today become a factor that may hinder the progress of an airline service. The rising of the cost of fuel may increase the controlling cost of the company. This stands to be a significant threat as Southwest Airlines highly depend on low-fare flights.
Southwest Airline Company has so far had a remarkable financial growth. The company has managed to attain competitive advantage over its competitors in the market. The overall success of Southwest Airlines has been a result of the strategies made by the company. The success of the company includes integration of all the forces, which build up the company. These include both social and financial aspects (Smith 2007).
The vision and mission of Southwest Airlines speaks well of the company’s future and its employees. The vision focuses mainly on the customers who are the main source of revenue to the company. Southwest Airlines is mainly focused on ensuring that customers are satisfied and happy about the service given. In this regard, the company can maintain its rapport. The mission aids in the accomplishment of the vision. That is Southwest Airlines have cantered the mission’s purpose on its employees. By so doing, Southwest Airlines can be assured that the customer will receive the best service. Hence, the vision has played a key role in the company’s growth process.
Southwest Airlines should be keen on the rising of fuel costs
This is a cost that can affect all other controlling costs of the company as it is a necessity in the business. In this regard, the company can reduce the effect of fuel prices by hedging their own oil purchases, and enhance better airline operations. In addition, the company has to find out an outstanding strategy which will facilitate the company to continue with its low-fare strategy, and stand the immense competition (Porter 1996).
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