Case Studysouthwest Airlines

Case Studysouthwest Airlines

Strategic Management   June 23rd   2011
Southwest Airlines
For the first time in its history, Southwest Airlines had its “LUV” for customers questioned. The FAA levied a record $10.2 million onto Southwest after missing mandatory safety checks. According to both the FAA and Southwest, only a tiny section of the plane’s skin had missed being inspected and cracks in that section would not have led to any catastrophic accident. This was a “black eye” on the airlines safety record.
SWOT Analysis
A SWOT analysis was made of the Southwest Airlines.
        1) Strength – Sensible expansion policy: Southwest has developed a very sensible strategy for expansion, paying particular attention not to strain the balance sheet. Southwest has been able to become a national airline by strategic expansion to airports where there is less competition.
            Financial position; Image; Safety record; Customer service.
        2) Weaknesses – Little room for strategic development: The main weakness of the company results from operating in a highly competitive market, one that is increasingly susceptible to a volatile political environment.
            No established alliances: Certain major US airlines have established marketing alliances with each other.
            Multi-country coverage; lack of intra-airline services and alliances.
        3) Opportunity – Low-cost position: Southwest’s greatest opportunity is directly related to its greatest strength, to continue to develop its low-cost position in the airline industry.
            Merger or acquisition: Southwest could strengthen its position through an alliance.
            Growth opportunities for smaller urban airport destinations; Long-term industry growth.
        4) Threats – Cost of operations: Significant costs of operations including rising labor costs and rising fuel costs, which cannot be avoided forever through hedging.
            Post 9/11 commercial airline environment: A...