Based on the joint schedules of both airlines, the combined network will serve 97 destinations. Southwest is in a challenging situation but can easily be remedied with a number of recommendations. Many airlines such as United Airlines and US Airways have already cancelled their benefit pension plans and demanded unions agree to take pay cuts while the companies were in bankruptcy. Nevertheless, each city within the country does not grow equally but rather disproportionately. Using its low-cost, no checked baggage fees, great customer service, and point-to-point strategy, which allows them to pick the most profitable routes to operate, Southwest has been able to expand year after year and stay profitable. The heaping problems facing Southwest can be traced to five major causes. Including student tips and advice.
Southwest uses only one type of aircraft â€” the fuel-efficient Boeing Thus in June of , after a tumultuous battle with other Texas-based airlines , Southwest Airlines inaugurated its initial flight Inkpen Labor costs have gone up more than 10 percent compared to the same time last year. Therefore a new entrant must be able to handle losses at the beginning. Southwest Airlines should further expand into ancillary products and services offering such as car rentals, hotels, taxi services, etc. During the last few years, Southwest Airlines has renewed some of its aircrafts with Boeing aircraft and plans to completely switch over to them in near future Southwest,
To achieve its goal of profitability maximization, Southwest primarily provides low fares, high frequency services, point-to-point flying, short hop flights, and high-quality Customer Service.
Southwest Airlines Case Analysis. Airline industry is severely affected by fuels costs. Businesses are still doing their core business travel, but converting to more of an electronic approach, for example, Skype, to save on costs. Nevertheless, each city within the country does not grow equally but rather disproportionately.
Even though competitors generate hundreds of millions of dollars from adding checked bag fees, the company does not want to consider adding them. Southwest has already been taking steps to help improve fuel efficiency by adding Blended Winglets to the wings of its aircrafts, since Although this was a smart choice to continue to grow, southwest airlines case analysis essay over a billion dollars hurt them financially.
Another impressive attribute is the fact that they can keep southwest airlines case analysis essay prices very low and affordable to customers.
Southwest Airlines: A Case Analysis :: Airline Business Analysis Strategy
Another weakness of Southwest Airlines is the fact that it currently serves only few states in the US, mostly in the South. However, air travel has the absolute advantage in terms of time. According to the authors of the case study, some of the market conditions of the U. Boeing and Airbus are the southwest airlines case analysis essay aircraft suppliers for large airlines.
This was Southwest Airlines most profitable route. Essay on Southwest Airlines Case Analysis Through such, competition will get tougher for Southwest and it will no longer be able to monopolize the low fare sector of the industry.
Essay on Southwest Airlines Internal Analysis This should be a key strategic direction for the company. Some cities have southwest airlines case analysis essay economic growth with higher GDP trends which creates a potential demand.
Therefore a new entrant must be able to handle losses at the beginning.
Southwest Airlines Case Analysis Essay
Because of the strong relationship with employees, it could be easy to negotiate with the unions and convince them that low labor costs are required for the long southwest airlines case analysis essay stability of the company. InSouthwest Airlines plan to cut operating costs and look for new revenue sources. These are market penetration-consolidation, product development, market development and diversification Ansoff, It does not buy huge aircrafts, fly international routes or try to go head to head with the major carriers; and thanks to a great planning, Southwest airlines has become the most successful airline company in the Southwest airlines case analysis essay.
It is through these resources and capabilities that the company can respond to its external environment and succeed.
InSouthwest offered buyouts to employees, trimming jobs. The Five Forces analysis is as follows:. There are high barriers to enter this industry as it requires a large initial capital investment.
This endeavor proved to provide a consumer savings of billions per year. Southwest Airlines, owned by Southwest Airlines Company, is a passenger airline primarily operating in the United States.
Southwest Airlines Case Analysis
This southwest airlines case analysis essay be very beneficial for Southwest because the company will be able to extend its services to a larger market that is in need of their traveling services.
Also, Southwest Airlines is heavily depended upon on the price of oil for its profit margins, which implies high bargaining power of oil suppliers. It was formed to compete with JetBlue and other low cost airlines for the Florida market.
Ready To Get Started? It is very common for airlines to project losses in their financial statements.
Aside from the fact that there are already so many established airlines that have good names and reputations, the vulnerability of the industry to economic cycles somehow add difficulty for new entrants. Many airlines such as United Airlines and US Airways have already cancelled their benefit pension plans and demanded unions agree to take pay cuts while the companies were in bankruptcy.
Get feedback on grammar, clarity, concision and logic instantly. Harvard Business ReviewJanuaryp. However, though coupled with several southwest airlines case analysis essay, Southwest Airlines is not without weaknesses. Another barrier to entry is the limited availability of landing slots at the US airports.
Also, Southwest has purchased more of the s, which are better on saving fuel, than any other airline; making them the number buyer from Boeing.