Appendix 2

Case Analysis Format
(3 pages maximum)

Title of the Case

Problem Statement: (The problem statement is a one sentence declarative sentence that describes the strategic issue to be examined.)

Fast growth, Low profitability? Sustainability Although Southwest cost are low, other competitor are cutting prices and becoming more competitive and therefore they face a problem being sustainable. Cost efficiency.

Scenario: (The scenario is a 3-5 sentence summary of the case which includes the names of principles and companies, such facts and details as would be necessary to the understanding of the problem)

Southwest Airlines was a market share leader in 2010 in domestic air travel in the U.S., and has continued to be the only carrier in the U.S to remain consistently profitable. The carrier has been able to sustain its position, growth, profit and competitive advantage through the implementation and dedication to a low-cost leader strategy which focuses on low operating costs, low fares, and excellent customer service which has become a major part of its culture and marketing. Despite the low costs strategy, and continually reported profit, the carrier has lost money between 1980 through 2009 as evidence by combined annual losses exceeding combined annual profits by $43.2 billion. Although it is apparent that the carrier’s competitive cost advantage has shrunk and operating costs are beginning increase, their low cost strategy has allowed them to remain leaders for example by adding 28 million passengers annually since 2000, where others lost them. One way that the carrier may once again realize high costs savings is through the possible acquisition of AirTran.

Analyses: (Choose 2 forms of analysis which flow logically from the problem and present these in detail. For example, if the problem deals with profitability then the