Key Problems
Southwest Airlines Company faces a couple of problems. How could company keep its low cost and high employee productivity with the added Boeing 717 planes? How to take advantages of the acquisition’s benefits to deal with the coming head-to-head competitions? How to avoid the acquisition’s bad impacts, like new competitors, financial problems, poor experience, structure redesign and cultural confusion? How to keep competitive advantages when imitation begins?
Analysis of Strategic Factors (SWOT)
Strengths:
Low operating costs
Service innovation
Technological expertise
Integrated marketing campaign
Product innovation
Financial position
Safety record
Weaknesses:
Product breath and depth
Multi-country coverage
No baggage transfer outside Southwest system
Lack of intra-airline services
Opportunities:
Growth opportunities for smaller urban airport destination
Societal values in the changing economy
Rebound opportunity as a result of 9/11 decline in market size
Vertical integration
Extent of rival’s horizontal integration
Long-term industry growth
Threats:
Cost: aviation fuel, labor
Weather
Terrorist attack on an aircraft
General economic downturn
Legislative and regulatory constrictions
Number of rivals and their relative size
Declining consumer confidence
Diminishing pool of qualified employees
Recommendations/Solutions
Three-year plan:
1. Southwest will decrease its downtime for repair of planes
2. Continue to be the most popular airline in USA
3. Improve technology
4. Introduce new innovative products or services
5. Increase the number of cities added to routes
Recommendations:
1. Pursue market growth opportunity
2. Adapt services and specials to cater to the population based on their demographics in order to increase market share
3. Introduce continuous learning system to retain current employees
4. Continue to...