SOUTHWEST AIRLINES STRATEGIC MANAGEMENT CASE STUDY Essay

The United States carries over one third of the globe’s total traffic, where Over 1.5 billion passengers fly annually. Over the past 20 years, air travel has grown at an average of about 5% per year, the reason for annual change is usually differences in economic growth, and of course other environmental factors, such as the current war. As a rule, the annual growth in air travel has been about twice the annual growth in GDP. Deregulation, liberalization, and competition have essentially altered the management strategies and practices of airlines. Productivity improvements and cost management have been two of the greatest concerns for US airlines for the past twenty years. As a whole, the airline industry must continue to improve their specialization in terms of fleet utilization, pricing and revenue management, and schedule optimization.

The airline industry is a hyper-competitive marketplace as many airlines have gone out of business

The threat of new entry is high because there are no significant barriers of entry in the airline industry. For example, airplanes can be easily leased, defraying the large initial capital investment. Additionally, exit cost in the business is

Try to stop all the employees from leaving the company because when staff retention is poor when we also higher new employees they are taking time to learn about the company and whenever a new staff comes in must get proper training before they start doing the

Two elements are working against air travel at present. First, the industry is experiencing a cyclical slowdown that has its origins in the Asian financial crisis. Second, with the days of deeply discounted fares over, fewer first-time travelers are entering the market.

* Expanding year by year and adding more traveling destinations which include the United States and popular sun-destinations

Other factors contributing to rivalry include enormous fixed costs, excess capacity, low differentiation, price wars. And the exit barrier for airline industry is also very high.

Hard to compete against the large airlines not only for customers but space at the airports for their airplanes.

They would want to earn high wages and keep their jobs. Employee is more of an internal stakeholder.

* Market. The market is a huge weakness with the economic downturn and people flying less, they are having a harder time to keep the basic fares down low enough for people to fly.

The main problem faced by Eurotunnel’s senior management is that they have not developed a competitive pricing strategy to increase its passenger and freight travel market share.

Low-cost carriers pose a serious threat to traditional "full service" airlines, since the high cost structure of full-service carriers prevents them from competing

The implications of this analysis are that the focus on the Chinese market is justified. The Chinese air travel industry is booming, and indeed this is fueled by that country's rapid growth and the increased demand for

Southwest Airlines faced many barriers to entry from the fierce competition of other airlines in the industry. Though competition was fierce, Southwest Airlines managed to succeed by doing things differently. Their mission was to provide affordable air travel to those who would not normally fly. Contradictory to the rest of the airline industry, Southwest maintained a profit while keeping its fares low. Southwest was unique to the industry in two ways. They focused on the short haul traveler and used a point-to-point method of flight connections.

It may be lower risk in in the aviation markets because of entry regulations that a high level of governmental barriers to open the freedom of flights, also the industry needs high fixed costs and assets of airline operation, but based on the increasing demand of travelers by air, it's given the high intensity of rivalry.