Southwest Airline Company

Southwest Airlines Company

Key Problems
    Southwest Airlines Company faces a couple of problems. How could company keep its low cost and high employee productivity with the added Boeing 717 planes? How to take advantages of the acquisition’s benefits to deal with the coming head-to-head competitions? How to avoid the acquisition’s bad impacts, like new competitors, financial problems, poor experience, structure redesign and cultural confusion? How to keep competitive advantages when imitation begins?

Analysis of Strategic Factors (SWOT)
 Low operating costs
 Service innovation
 Technological expertise
 Integrated marketing campaign
 Product innovation
 Financial position
 Safety record

 Product breath and depth
 Multi-country coverage
 No baggage transfer outside Southwest system
 Lack of intra-airline services

 Growth opportunities for smaller urban airport destination
 Societal values in the changing economy
 Rebound opportunity as a result of 9/11 decline in market size
 Vertical integration
 Extent of rival’s horizontal integration
 Long-term industry growth

 Cost: aviation fuel, labor
 Weather
 Terrorist attack on an aircraft
 General economic downturn
 Legislative and regulatory constrictions
 Number of rivals and their relative size
 Declining consumer confidence
 Diminishing pool of qualified employees

Three-year plan:
1. Southwest will decrease its downtime for repair of planes
2. Continue to be the most popular airline in USA
3. Improve technology
4. Introduce new innovative products or services
5. Increase the number of cities added to routes

1. Pursue market growth opportunity
2. Adapt services and specials to cater to the population based on their demographics in order to increase market share
3. Introduce continuous learning system to retain current employees
4. Continue to...