Southwest Airlines' business model is based on extremely efficient operations, low-cost pricing, and innovative logistics solutions. Furthermore, their strategy also includes a deep focus on customer experience and looking ahead. Finally, none of this would be possible without a motivated team of employees.
Southwest's Generic Strategy for Competitive Advantage (Porter's Model) Southwest Airlines Co.'s generic strategy is cost leadership, which creates competitive advantage based on low costs and correspondingly low prices.
Southwest has its own definition of culture: The development, improvement, and refinement of the originality, individuality, identity, and personality of a given people. The unique, fun, loving culture of Southwest has been a core component of its success.
For a new airline company operating in uncongested airports, it creatively established the “Love Theme” for itself and its unique service of intrastate flights to be known. Southwest has been more successful than its competitors due to its awareness and adherence to its own business model.
Southwest Airlines mission is “Dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.” This mission statement shows what Southwest Airlines business does.
Their distinctive competencies are the low fares, which are often some 30% lower than those of its major rivals. These are balanced by an even lower cost structure, enabling it to record superior profitability even in bad times. In addition, they fly point to point which differs them from their competitors.
Three of the major cultural traditions that impacted the region include the Paleo-Indian tradition, the Southwestern Archaic tradition, and the Post-Archaic cultures tradition. As various cultures developed over time, many of them shared similarities in family structure and religious beliefs.
Particularly, the key elements of SWA culture are: Fun atmosphere and work environment: promoted through entertaining behaviors in performing their jobs, an ongoing pranks and jokes, and frequent company-sponsored parties and celebrations. High compensation and numerous incentives.
Employees of Southwest Airlines are encouraged to “Live the Southwest Way.” This includes having a Warrior Spirit (work hard, desire to be the best, be courageous), a Servant's Heart (put others first, live by The Golden Rule), and a Fun-LUVing Attitude (be a passionate Teamplayer, have fun).
The firm can offer free internet services and better loyalty programs for its customers. The targeted passengers should be equipped with new resources such as free internet (Wi-Fi), proper customer support, comfortable seats, and loyalty programs. Such strategies will eventually make the firm more profitable.
Essentially, Southwest Airlines needs to have the airplanes to fuel that growth. After ticking that box, the airline then needs to turn to airports and ensure they can get the gate space, the counter space, and other infrastructure support systems.
For several decades, Southwest Airlines was the envy of the airline industry because of multiple competitive advantages: a low-cost structure that stayed low due to fast growth, happy employees who liked their jobs and translated that to customers, loved by customers and the government for its low fares and creating ...
Southwest Airlines Co.’s operations as one of the biggest low-cost carriers in the world are a showcase of how the company’s strategies are appropriate in addressing the internal and external strategic factors identified in this SWOT analysis. The SWOT analysis framework evaluates the enterprise in terms of business strengths and weaknesses (internal factors) and opportunities and threats (external factors) in the commercial aviation industry. Southwest Airlines Co.’s corporate vision and mission statements use such strengths to move the business forward, especially in taking advantage of available opportunities. Aligning the airline company’s strategic management with the issues presented in this SWOT analysis can optimize business performance and minimize the problems associated with the relevant weaknesses and threats. Considering the company’s role as a major player in the air travel market, Southwest Airlines Co.’s approach to overcoming business challenges provides insights on best practices for low-cost providers in the industry and beyond.
Updated on May 30, 2019 by Christopher Mitchell. A Southwest aircraft at Bob Hope Airport, Burbank, Los Angeles, California. A SWOT analysis of Southwest Airlines Co. identifies global growth and expansion opportunities that the company can exploit. (Photo: Public Domain)
As a large-scale low-cost carrier, Southwest Airlines enjoys a strong brand that enables the business to attract passengers. This internal strategic factor supports the company’s ability to penetrate markets and successfully introduce new flight routes, based on brand recognition among target customers.
Competition is a strong threat against Southwest Airlines Co. For example, companies like Delta Air Lines, American Airlines, and United Airlines are aggressive competitors. In this SWOT analysis, such an external strategic factor hinders business expansion in markets where these competitors are present, and contributes to the competitive forces identifiable through a Porter’s Five Forces analysis of Southwest Airlines Co. On the other hand, regulatory changes in commercial aviation are a minor threat that imposes challenges and associated costs in compliance efforts. Southwest Airlines also experiences the threat of volatile fuel prices. This external factor is a threat because air transportation firms depend on fuel, which account for major operating costs. Southwest Airlines Co.’s corporate social responsibility strategy helps address this threat. Furthermore, the company faces the threat of a limited pilot population that is estimated to be inadequate to support the industry’s future needs. This aspect of the SWOT analysis shows that Southwest Airlines Co.’s business performance is subject to industry variables, some of which are beyond the company’s control.
The Five Forces is a framework for understanding the competitive forces at work in an industry, and which drive the way economic value is divided among industry actors. First described by Michael Porter in his classic 1979 Harvard Business Review article, Porter’s insights started a revolution in the strategy field ...
Analyzing the Five Forces can help companies anticipate shifts in competition, shape how industry structure evolves, and find better strategic positions within the industry.
First described by Michael Porter in his classic 1979 Harvard Business Review article, Porter’s insights started a revolution in the strategy field and continue to shape business practice and academic thinking today. A Five Forces analysis can help companies assess industry attractiveness, how trends will affect industry competition, which industries a company should compete in—and how companies can position themselves for success.
Buyer power is highest when buyers are large relative to the competitors serving them, products are undifferentiated and represent a significant cost for the buyer, and there are few switching costs to shifting business from one competitor to another.