Southwest Airlines Case Analysis

1546 Words Jan 14th, 2009 7 Pages
Southwest Airlines: A Case Analysis

ORGANIZATIONAL ANALYSIS

It is evident that the greatest strength that Southwest Airlines has is its financial stability. As known in the US airline industry, Southwest is one of those airlines who are consistently earning profits despite the problems the industry is facing. With such stability, the corporation is able to make decisions and adjust policies, which other heavily burdened airlines may not be able to imitate.
Having a low amount of cost in their operations is one of the contributing factors in Southwest Airlines’ financial success. Such low cost model of the corporation is brought about by an effective strategy. Southwest uses only one type of aircraft – the fuel-efficient Boeing 737.
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The company can spread their wings to new territories and purchase more planes to extend their capacity and cater more customers. This would 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.

It is quite known that the airline industry has very high barriers to entry. This means it is somehow difficult for new companies to enter such industry. 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. Such vulnerability means that if the economy is doing well, more people will have the money to pay plane tickets and travel. But if the economy is not doing well, then people will have less money to fly and will use more cost effective means of transportation. This difficulty for new entrants to penetrate the industry is an opportunity for Southwest to minimize the likelihood of additional competition, thereby sustaining its current share in the market. They may now focus more on their current competitors for market share rather than worrying much about others entering the industry.

Having been very successful in their operations, Southwest Airlines is surely a target of competitors’ focus. And by that, other airlines may begin copying Southwest 's
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