...Airline Industry: A Strategic Overview of Southwest Airlines Terra Thompson Ohio Dominican University Running head: SOUTHWEST AIRLINES 1 The Airline Industry: A Strategic Overview of Southwest Airlines Terra Thompson Ohio Dominican University SOUTHWEST AIRLINES The Airline Industry: A Strategic Overview of Southwest Airlines Table of Contents 2 The History of Southwest Airlines ................................................................................................. 3 Target Market and Business Model ................................................................................................ 3 Current Product............................................................................................................................... 4 Southwest’s Culture ........................................................................................................................ 5 Mission Statement .......................................................................................................................... 5 Mission and Corporate Culture....................................................................................................... 6 Employees and the Mission ............................................................................................................ 7 The Importance of the Mission Statement and Corporate Vision................................................... 7 Strategic Analysis ......................
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...MGT/498 November 26, 2013 Environmental Scan Environmental scanning is an essential element in monitoring and analyzing trends that can affect an organization. A tool used as a part of environmental scanning is the SWOT analysis which pinpoints the Strengths, Weaknesses, Opportunities and Threats of an organization. This paper will present a SWOT analysis of three companies from three different industries, Starbucks Coffee, southwest Airlines and Wendy’s Old Fashion Hamburgers. In addition to the SWOT analysis there will be information regarding the company’s competitive advantage, strategies used, how value is created by each company along with the measurements guidelines used to verify strategic measurements SWOT Analysis: Starbucks Coffee, Southwest Airlines & Wendy’s Starbucks Coffee, Southwest Airlines, and Wendy’s operate in three different industries, something each company has in common is utilizing as a tool the internal and external environments based on the SWOT analysis. Starbucks Coffee began as a single store in Seattle; now, the number one coffee chain in the world located in over 62 countries with 18,000 stores. In order for Starbucks to have its current success and continued success a SWOT analysis breaks down the favorable and unfavorable factors to determine the appropriate strategy to stay on top in the premiere coffee industry. The Strengths of Starbucks Coffee to name a few are the experience the customers have with Starbucks...
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...INTRODUCTION TO MANAGEMENT Semester 2, AY2011/2012 Individual Report A Report on Southwest Airlines Prepared for: Mr. Balasubramanian Shankar Due date: Monday, 5th October 2015 Submitted by: Jiyeon | CT00000000 | TABLE OF CONTENTS 1. INTRODUCTION 2 2. COMPANY BACKGROUND 3 3. PESTEL ANALYSIS 4 3.1 Political 4 3.2 Economic 4 3.3 Social 5 3.4 Technological 5 3.5 Environment 5 3.6 Legal 6 4. PORTER’S FIVE FORCES ANALYSIS 7 4.1 Threat of New Entry 7 4.2 Threat of Substitution 7 4.3 Buyer Power 7 4.4 Supplier Power 8 4.5 Competitive Rivalry 9 5. STRATEGIC RECOMMENDATIONS 10 5.1 Managing Technology Advancements 10 5.2 Maintain Cost Advantage 10 5.3 Geographical Expansion 10 5.4 Product Diversification 11 6. CONCLUSION 12 7. REFERENCES 14 1. INTRODUCTION The focus company in this report is Southwest Airlines (SA), a major low cost carrier in the United States (US). The aim of this report is to examine the current market environment and competitive power of Southwest Airlines. In order to have a substantial overview of its environment, two analyses, the PESTEL analysis and Porter’s Five Forces analysis, will be used to evaluate SA. With the findings, strategic recommendations will be made for the problems that the airline is facing or may encounter in the near future. 2. COMPANY BACKGROUND Southwest Airlines is a budget airline established in 1967 by Rollin King and Herb Kelleher and had...
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...Milestone One Analysis: Business Case and Discovery of Southwest Airlines Jacqueline L. Gholar GM543-01(1505D) Organizational Diagnosis and Design August 25, 2015 Professor Rebecca Herman Rebecca Herman, Ph.D., MBA, BS. Milestone One Analysis: Business Case and Discovery of Southwest Airlines Introduction Southwest Airlines has a complex organizational structure comprised of several multi-divisional structures. These structures are constructed on increasing horizontal and vertical differentiation, as well as customer relations as a service driven business (Dearinger, R., 2010). Southwest’s business strategy from its launch in 1971 encompassed four core competencies, which are; “the lowest operating costs per plane; an economical point-to-point airport network; a fanatical culture focused on customer service and cost savings, and an ability to keep planes in the air more of the time than its competitors” (Heller, I., 2008). For the past 40 plus years Southwest has exceedingly accomplished these competencies and strategies within a very competitive market, and has outstandingly been recognized as a low cost provider in airfare with frequent service domestically. In 2014, Southwest chose to integrate international flights in its business strategy. In an effort to identify issues and develop solutions for this new integration, clarifying strategic priorities and providing the company’s strengths and weaknesses will aid in supporting the use of the Strategy Canvas...
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...MGT 4315*2 Team 4 Strategic Profile and Case Analysis Purpose In the airline industry competitors have to work hard to maintain market share and even more to increase their share. Southwest Airlines has become the market share leader in terms of passengers carried with the simple strategy: “low-cost/low-price/no-frills.” They have done an excellent job in implementing and executing their strategy elements. Some of the most crucial executions in the Southwest strategy are their point-to-point scheduling of flights, customer service and customer satisfaction, and appreciation of employee involvement for continuous company improvement. Although many other airlines can implement the same strategic elements as Southwest has, they would still be behind the times since Southwest has been working efficiently from inception. Throughout this analysis of their performance, one may conform his or her own opinion on how to grade Southwest with the information provided. Alternative strategic suggestions will be evaluated with a preferred alternative choice that could improve the Southwest image and performance. Situation Analysis General Environmental Analysis Until the Airline Deregulation Act of 1978, the government had control over airline fares, routes, and market entry. But since Southwest's initial plan was to fly only intrastate routes, they did not have to come under the regulation of the Civil Aeronautics Board. Southwest did, however, encounter some legal...
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...CASE STUDY ON SOUTHWEST AIRLINE CHUOP Theot Therith TABLE OF CONTENT Table of Content 1. Case Abstract .......................................................................................................................................................... 1 2. Propose a Vision Statement............................................................................................................................ 2 3. The company mission statement and mission statement proposed .................................................. 2 4. List the corresponding Mission Statement components ......................................................................... 2 5. Perform an External Audit.............................................................................................................................. 3 6. Competitive Profile Matrix (CPM) ............................................................................................................... 5 7. The EFE Matrix .................................................................................................................................................... 5 8. Perform an Internal Audit ............................................................................................................................... 7 9. The IFE Matrix ..................................................................................................................................................... 8 10. TOWS Analysis .............
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...Employing Strategy in a Competitive Environment Lutuéce Hurt Dr. Lloyd H. Stebbins, P.E. Strategic Management BUS 599 May 5, 2013 Create an environmental scan for the company indicating the most significant environmental threats and discuss how the company should respond to each threat to ensure that the impact to the business is minimal. The significant success for any organization is strategic planning. To develop a successful plan would require the organization to have a comprehensive understanding of their current environment. Environmental scanning is used to establish the focus of the strategic plan. To conduct an environmental scan external and internal information should be evaluated. A SWOT analysis will focus on the strengths, weaknesses, threats, and opportunities. We will discuss the most signification environmental threats for Southwest Airlines. There are many environmental factors that could influence the performance of the company, Southwest Airlines, which provides low-cost air travel and service. This student will discuss two environmental threats pertaining to Southwest Airlines. Two environmental factors that have a major impact on how businesses operate are: economic factors and regulations. September 11, 2001 terrorist attack on the World Trade Center was a moment in history that effected Nation and the U.S. economy. Most importantly the airline industry was threatened by the aftermath of the economy. “The events of September...
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...STRATEGIC MANAGEMENT CASE STUDY SOUTHWEST AIRLINES SÜLEYMAN SİNAN ÖZTÜRK EBS 5103 STRATEGIC MANAGEMENT INSTRUCTOR: DR. AHMET BEŞKESE BAHÇEŞEHİR UNIVERSITY May 2013 Contents CONTENTS ................................................................................................................................... 2 INTRODUCTION: ......................................................................................................................... 3 THE HISTORY: .............................................................................................................................. 3 CASE ANALYSIS: PESTEL FRAMEWORK................................................................................. 5 CASE ANALYSIS: MICHAEL PORTER’S FIVE FORCES FRAMEWORK ................................. 7 CASE ANALYSIS: COMPETITIVE PROFILE MATRIX .............................................................. 9 CASE ANALYSIS: VALUE CHAIN ANALYSIS ......................................................................... 10 FINANCIAL ANALYSIS ............................................................................................................. 12 SWOT ANALYSIS ....................................................................................................................... 16 SPACE MATRIX .......................................................................................................................... 18 TOWS MATRIX: ..............................
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...are a result of technological innovations, innovative post merger improvements, and cultural synergy (Bena and Li, 2014). Additionally, the strategic planning and implementation of creating this synergy creates one of the biggest challenges for Human Resources....
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...it enables the team to know what is supposed to be done and how it is to be done, results are also monitored and where possible adjustments can be made easily. Three types of goals When goal setting, there are three types that an organization can set by any given organization. These goals are ranged from a hierarchy, from top to bottom. Achieving the low-level goals that become a means of achieving the higher-level goals; strategic, tactical and operational goals (Davis, 1996). Goals set by upper management or top management that are mainly concerned with the main objectives of an organization is known as strategic goals. These goals are mainly meant for the top leaders of the organization who are also concerned with the main objectives of the organization. Take Southwest Airlines for instance, the main objective for this company was to remain very profitable. To achieve this Southwest Airlines kept their air fare tickets price low, ensuring that their passengers are happy. Thus cutting down operational expenses as a part of this strategic goal. The goal of lower air priced...
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...Strategic Management Case Analysis: Southwest Airlines Southwest Airlines Co. (Southwest) is often cited as a success story in terms of strategic management. Southwest is a passenger airline that provides scheduled air transportation in the United States. Primarily, the company offers passengers low-fare, point-to-point air transport services in 72 cities in 37 states all throughout America (MarketLine, 2012). Southwest is headquartered in Dallas, Texas, and has about 45,392 employees as of FY2011. For FY2011, the company generated revenues of $15.658 billion, increasing by 29.4% over FY2010 (MarketLine, 2012). Southwest reported net profit of $178 million in FY2011. It must be noted that the airline industry is famed for its cut-throat competitiveness. However, since its inception in 1971, Southwest has been able to steadily rise to the top of airline rankings due to its Low Cost Leadership strategy (Muduli & Kaura, 2011); Box & Byus, 2009). Southwest also consistently offers on-time arrival that, combined with low-priced fares, makes it highly favorable for passengers. Southwest is able to achieve its strategy by using a linear, point-to-point network and does not have an airport hub (Tierney & Kuby, 2008). As a result, the company’s aircraft are seldom idle while its competitors spend prolonged idle time while passengers switch planes at the hub (Tierney & Kuby, 2008). Because of the impact of this strategy on passengers and the industry as a whole, competitors tend to...
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...Southwest Airlines Case Analysis Philemon Ngadigui BUS 478 Cases in Strategic Mgt. November 17, 2012 Introduction 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. a little more than forty years ago, Rolling King, owner of a small commuter airline, and Herb Kelleher, King’s lawyer, got together and decided to start a different kind of airline that would provide a short-haul, low-fair, high-frequency, point-to-point service in the United States. The company began service on June 18, 1971 with flights between Dallas, Houston, and San Antonio (“The Golden Triangle” as Herb called it), under the direction of Lamar Muse, who was brought in as a CEO. Muse was an aggressive and self confident airline veteran who knew the business well and who has the entrepreneurial skills to tackle the challenges of building the airline from scratch and then competing head-on with the major carriers. According to CNN.com citing the Fortune 500 journal, Southwest Airlines is the fourth largest customer airline carrier in the United States, and the 167th in the Fortune 500 annual ranking of America's largest corporations revue, with a annual revenue of $15,658.00 million . They use all Boeing 737 jets in order to save money on training and maintenance. The average age of company’s fleet is only 8.4 years. The average trip length is 451 miles with an average...
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...ANALYSIS OF THE AIRLINES INDUSTRY Introduction The airlines industry in the U.S. provides air transportation services for passengers. To determine the current state of the airlines industry, various analyses were performed. An analysis of the macro-environmental factors affecting the industry was first analyzed. Then, a Porter’s five forces analysis was used to determine the attractiveness of the industry, and current changes in the industry as a whole. Key success factors were analyzed to determine a firm’s ability to thrive within the marketplace. And lastly, a strategic group map was created to assess the companies that are best positioned and worse positioned in the industry, along with a financial analysis of major competitors in the industry. Macro-Environmental Factors Affecting the Industry Macro-Environmental components include, “demographics, social values and lifestyles, political and legal factors, economic conditions, environmental conditions, technological factors, and global forces” (Gamble, Thompson, & Peteraf, 2012, p. 79). The most influential factors in the airlines industry are economic conditions and environmental factors. The economic recession in 2009 greatly affected the airlines industry. Poor economic conditions reduced the demand for consumer and business travel. According to the IBIS World database, “Rising unemployment rates and falling disposable income during the recession resulted in a stark 16.3% decrease in revenue” (Brennan, 2013)...
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...Week Five Failure Analysis/Change Strategy Deirdre Martin-Banks, Claudia K. Elizondo, Hana Habbal, Aisha Lawson, Elizabeth Walton, and Erika Williams MGT/521 August 9th, 2015 Dr. Arny Bereson Introduction Analyzing and comparing the organizational strategies of different businesses operating under the same circumstances can help in understanding the factors that affect the success or failure of a business. Team A indentified as an organization that managed to succeed, and Borders Books as a business that failed during the past few years. This paper examines each company by analyzing each of their structure, culture, strategies, and behavioral theories, and creates a change strategy for Borders Book to save the company assuming the failure did not take place yet. Part One A- Southwest Airlines Objective, Mission, and Vision Southwest Airlines was founded in March 15, 1967 by Rollin King and Herb Kelleher, ("About Southwest"). They wanted to start a different airline that advocated for the people. Their objectives were to get passengers to their destinations when they wanted to be there and for the lowest fare possible. From these objectives grew a successful company that passengers and employees alike will agree, advocates for them. The mission to customers then aligned with these objectives and became, “dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit, ("About...
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...Reflection for Southwest Airlines As a group we started looking at Southwest strategic management, analyzing the strategic formulation of the vision statement as effective and a good mission statement. The vision for Southwest is a people-centered organization that focuses on the needs of customers as well as employees. Like the Southwest employee said, “We are all dedicated to the delivery of positively outrageous service to customers—with a sense of pride, warmth, and friendliness.” Southwest has formulated a strategy that is unlike any other airline. They have designed a culture among their employees that: * Creates a friendly atmosphere * Nonconforming structure that lets people be themselves * Generates team spirit * Empowers employees to make decisions Based on the interviews of Southwest employees by the HREP of Stanford, it appears that this vision is working for Southwest employees effectively. And if you’ve ever flown Southwest, you would learn that it works for customers, too. The low-cost, no-frills airline with no assigned seating and no business class appeals to the masses, including business travelers. The sense of humor used by the flight attendants makes passengers feel relaxed. The mission statement for Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit. We are committed to provide our employees a stable work environment with equal...
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