Southwest Airlines Case Analysis
Within 30 years, Southwest Airlines has become the fifth largest major airline company in America (www.southwest.com-n.d.). It currently operates 520 Boeing 737s throughout the United States (www.southwest.com-n.d.). The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit (www.southwest.com-n.d.). It primarily provides short haul, high-frequency, point-to-point, low-fare air transportation service in the United States (Freiberg et al 1996). The company essentially functions as a “point-to-point” operation rather than a “hub and spoke” service like its competitors (Freiberg et al 1996). This provides for a unique competitive advantage, which has led this company to be a strong performer within the industry. The major success to their continued success is due to their low-cost model, as compared to their competitors, which allows Southwest airlines to differentiate itself from the competition and perpetuates its success and popularity among consumers (Freiberg et al 1996).
An evaluation of the company’s internal strengths and weaknesses; and external opportunities and threats serves as the foundation for this strategic analysis. The analysis centers on Southwest’s growth strategy by suggesting ways in which it can build on existing customer relationships and on the development of new services targeted to specific customer niches (wwws.ameritrade.com-n.d.). The company’s strengths arise from the resources and competencies available to the firm. Among the many core competencies aimed at customers, the one that has saved the company more than $727 million a year over the last few years is an aggressive fuel hedging program which offsets possible potential losses on 70% of the airline’s fuel consumption (wwws.ameritrade.com-n.d.). This strategy has allowed Southwest Airlines to keep prices low and has...