Southwest Airlines and Airlines Case Study

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Southwest Airlines

Since its inception, Southwest Airlines has grown significantly to become one of the most reputed, low-cost, and longest-standing airline that offers the largest number of domestic flights within the United States. For more than four decades now, the company has been able to sustain its appeal to consumers and its low cost originator image, even though that discernment and view has now become more of an old tale than the present reality. The airline company has done well to increase and improve its market base all over the United States; however, it lacks presence in the international market.

SWOT Analysis is a valuable and convenient tool employed for understanding a firm's strengths and weaknesses, identifies the opportunities available for the organization and the threats it faces. In the business realm, an organization can utilize this technique in order to attain a sustainable share in the market. The company can employ this technique to determine whether an issue is an internal or internal factor and how it hampers of benefits the company, not only in the present state but also in the prospective future (Warner, 2010). What is more, by analyzing the internal and external environment together with that of the competitors using the SWOT analysis, a company is able to come up with a strategy that enables it to make a distinction between itself and its rivals in order to compete successfully in the market (Mind Tools, 2016). The internal factors can be controlled whereas the firm cannot control the external factors. This paper will analyze the SWOT framework of Southwest Airlines and offer recommendations.

Strengths

One of the key strengths of Southwest Airlines is that it is renowned as one of the key low cost airline leaders in the industry and also an inventor investing in a low-cost carrier. The airline offers low price tickets as compared to other airlines. Southwest Airlines is the biggest low cost domestic airline and has the second biggest market share in terms of revenue passenger miles. Boasting a record of gainful and cost-effective operations for a period of 42 years substantiates the success of the firm's business strategy (Schmidt, 2015). Another strength of the company lies in its business model. Southwest Airlines utilizes a point-to-point business model in comparison to the hub and spoke model employed by major airlines such as American Airlines and United Continental. The enables the company to attract greater traffic on majority of its domestic routes as it can offer lower average flight time (Schmidt, 2015).

Southwest Airline's various cost reductions are beneficial for the company in terms of passing on the benefits to its clients.

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These lower prices aid the company in gathering higher demand for its tickets. In addition, this high level of demand helps the airline to achieve cost savings by directly retailing on its website and as a result minimizing marketing outlays (Schmidt, 2015).

Weaknesses

Regardless of its major strong suits, Southwest Airlines does have its shortcomings, which act as a weakness in its operations. One of the main weaknesses of the company lies in its significant reliance on a single provider - Boeing. Southwest Airlines procures all of its airliners from Boeing and the sole aircraft model that the company uses for its business operations is the Boeing 737. The implication of this is that the airline is overtly, often excessively dependent on this line of aircraft and any negative instances such as an increase in the purchase price of the airline or a recall by the manufacturer can easily affect the business and operations of Southwest (Gulliver Business Travel, 2012).

Another weakness perceived in Southwest Airline's operations is that its products and services are slowly becoming archaic. In the contemporary, one of the main features airlines offer across the globe is an extended legroom for consumers, even for ultra-low cost carriers. Southwest Airlines, however, continues to persist with very dense aircrafts that have minimal seat pitch. Apart from offering its consumers Wi-Fi while on board, a great deal of its product offering is debatably outdated. What is more significant is that the company could be missing a major opportunity to leverage the airline's strong brand to come up with new opportunities for generating more revenue (Center for Aviation, 2014).

Opportunities

At present and in the foreseeable future, there are numerous opportunities available for Southwest Airlines to take advantage of in order to attain a competitive advantage. One of the major opportunities for the company is tapping into unexploited markets not only nationally but also globally through expansion of business operations. In the 2014 fiscal year, Southwest Airlines unveiled its own-branded global service. The acquisition of Air Tran coupled with renovation and overhaul in the reservations system have been beneficial in expediting its expansion ambitions. Including international flight service is imperative for Southwest Airlines in its endeavor for network diversification considering it is debatably the most domestically penetrating airline in the United States. The capacity to offer its massive consumer base accessibility to proximate global leisure destinations is an advancement in its operations and is an opportunity for the airlines to generate increased revenue once the markets reach maturity (Center for Aviation, 2014).

Another opportunity for Southwest Airlines encompasses the prospective partnerships and strategic alliances with foreign international airlines......

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