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Hi, I need help with essay on Southwest Airlines: Case Study. Paper must be at least 1000 words. Please, no plagiarized work!
The roots of Southwest Airlines can be traced back to the late 1960s when two individuals, Rollin King and Herb Kelleher identified the potential business opportunity that lay in provision of intrastate airline services in Texas. Southwest Airlines managed to launch legal business operations in 1971 and from just 3 Boeing 737 planes the company never looked back. It has maintained growth to an enviable 548 Boeing 737 planes operating in 65 cities across 35 states as of 2010 (YahooFinance, 2010). It is a market leader with more than 3,400 daily departures, about 35,000 employees on its roster, operating revenue of $12.1 billion and a net income of $550 million as of 2010. This is happening under the leadership of Gary C. Kelly heading an equally able management and is guided by a mission centered on high quality and friendly service to customers. The management is complemented by a dedicated workforce as the company’s organizational culture is built around employee satisfaction and motivation to achieve optimal operations as evidenced by the fact that over 80% of the supervisory positions are filled from within (Southwest, 2011). Swot Analysis on Southwest Airlines The main strength that the company has lain in its ability to provide reliable and assured low-cost flights across several destinations which is important especially in the current state of reduced consumer purchasing power. The efficiency of operations within the company brings a double advantage in minimizing the company’s operational costs thus maximizing profits and satisfying customers thus developing a strong brand. Equally important is the workforce present at Southwest Airlines. The workforce is motivated and committed hence achieving high levels of productivity that enable the airline to meet its goals (Flouris and John, 2005). The biggest weakness of Southwest Airlines is its conservative approach to transcontinental flights as evidenced by the strategy of sticking to short distance aircraft types which limit its growth potential. Externally, the company has several opportunities the main being its opening up of new routes and considering international air travel services. The recent economic recession provides an opportunity for even more markets since it already offers low-cost travel in comparison to its rivals. One of the most serious threats faced by the company is a development of high-speed railway systems that are cheaper and thus preferable for the low-end market that is the company’s niche. The ever-rising oil prices are also a major threat alongside increased competition from major and minor airlines for low-cost air transport service and terrorism scares creating apprehension to air travel (Kazmi, 2008). Porter’s Five Forces Analysis on Southwest Airlines, To begin with, new entrants into the airline industry have to contend with the entry barrier of massive capital costs. However, this has not hindered companies such as Air Trans Airways and JetBlue from increasing competition more so to Southwest Airlines since such entrants seek to target low-cost markets. In terms bargaining power of buyers, it is evident that consumers are becoming more knowledgeable especially with the advent of the internet hence airline companies have to devise strategies to maintain market share.