Background Information
Southwest Airlines is a United States airline company based in Dalla in Texas. The company came into existence in 1967 and got its current name in the year 1971. It has employed more than 45,000 employees and operates over 3,500 flights every day. It has its operations within the U.S. market implying that the company does not operate internationally. In fact, it has more than 90 destinations within 40 states of America. The company uses only one producer airplane in its operations which happen to be the Boeing Airplanes. Despite many other U.S. Airlines that operate both domestically and internationally, Southwest Airlines has been able to dominate the U.S. market. The success of the company in the U.S. market is subject to the company’s quality customer service, employee commitment, and low-cost operations (Hugo, 2003).
According to Hugo (2003) the company’s mission statement states that the airline is committed to offering quality customer service through extending company spirit, kindliness, and individual superiority. On the other hand, its vision statement states that the airline targets to be the most loved, sailed and profitable Airline in the world. These statements have played a great role in promoting effectiveness and efficiency in the company’s operations.
The organizational culture of Southwest Airlines focuses on bringing strong relationships between its employees, customers, and the management. It is true that the airline is committed to providing its customer with the best services ever. The company is the low-cost carrier airline in the world implying that the company is dedicated to offering its customers services at affordable prices. Besides, the airline is also conscious on the welfare of its employees and this evident in the way the airline treats its employees. The airline strives to ensure a conducive working environment for its employees thus promoting good relationship of the members within the workplace therefore enhancing their efficiency. Above all, the airline’s culture is based on the need of every member being happy when conducting his or her activities in the workplace. This has played a great role in promoting good customer service.
Internal Analysis
Strengths
Customer and employee commitment- Southwest Airlines has good customer services that play a role in enhancing its success. Its employee’s relations with the customers are excellent thus enhancing unique customer service. The company focuses much on enhancing the social welfare of its employees thus motivating them to offer their best (Hugo, 2003).
Low costs- The Company uses Boeing airplanes as a way or reducing costs associated with repair. This also assists the company in receiving a huge discount during the purchase of the airplanes.
Affordable traveling packages- Southwest provides its customers with reasonable prices for its services. This has made it easy for many people to afford its services as compared to other airlines.
Dominance in the market- Hugo (2003) reveals that the Southwest Airlines dominates the North American market making the company realize a large customer base hence high profitability.
Weaknesses
Lack of international flights- The Company has not considered expanding its services internationally. This has played a great role in reducing its market significantly thus preventing the company from enjoying revenues from international airline market (Hugo, 2003).
Very short trips- The company services cover a very small distance something that limits the company’s revenues.
Limited online services- The Company still uses old booking services implying that it has not fully integrated online services something that lowers its competitiveness in the market.
External Analysis
Opportunities
Ready international market- The world presents Southwest Airlines with a ready international market for its products and its services. It is worth noting that the company is yet to focus on the international market so far. It is important for the company to expand its products and services internationally.
Research and Development- Although the company is doing well in the U.S. market, a focus on conducting research and development is vital for the company in advancing its product and services.
Service expansion- The consumer needs are changing every time compelling the company to focus on expanding its services to match its customer needs. For instance, the Southwest Airlines needs to consider coming up with various business classes in its business to meet the needs of various social classes of people.
Threats
Oil prices- The economic climate is ever fluctuating thus leading to oil price fluctuations that affect the operations of the business negatively.
Competition- The industry has many competitors thus challenging the operation of the Southwest Airlines. The company’s competitors such as American Airlines and JetBlue Airways have embraced online reservation systems thus posing a challenge to the company.
Terrorist Attacks- Terrorism is a major threat to the operation of Airlines since many terrorists target airlines thus discouraging many people from use the air transport services.
Problems facing the company
Southwest Airlines is facing a huge problem in integrating technology and innovativeness in its services. Although the management has taken the initiative of considering the use of modern technology in the operations of the company, its adoption to the changes in technology is very slow compared to other companies. In fact, the new entrants in the company have embraced both technology and innovative strategies thus able to have attractive and varied consumer services in their operation. This is very big problem for Southwest Airlines when it comes to edging competitiveness in the market (Hugo, 2003).
Besides, overdependence in the U.S. market is another problem that affects the growth and development of the company. Its failure to expand its services internationally limits the company’s revenues. Southwest is a leader in the U.S. airline market implying that the company can also compete internationally if it expands its services. Overdependence on the domestic market also prevents the company from benefiting from the available technological exchange available internationally that can assist the company in promoting innovativeness.
Strategic Plan
There is the need for the company to focus on embracing modern technology fully in its operations to enhance its competitiveness in the market. The move to foster the use of modern technology by the company will encourage innovativeness that will assist the company in creating diverse services that will promote its competitiveness in the industry. These will help the company create a niche in the market making it focus
Also, the Southwest Airlines Company need to consider developing marketing strategies that will encourage it to enter the international airline market without any issue. For instance, it should focus on coming up with market entry and competitive strategies that would build its confidence thus able to expand its services internationally. This is a big opportunity that awaits the company to take a step to enjoy the economies of scale enjoyed by other U.S. airlines that operate internationally. The future growth and development of the company depends on its focus to venture in the international airline market.
References
Hugo, M. (2003, Feb 9). Is Southwest Airlines losing the luv? Los Angeles Times. Retrieved from http://articles.latimes.com/2013/feb/09/business/la-fi-southwest-airlines-20130210
