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Southwest 's Strategic Perspective With A Low Cost Business Model

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Southwest’s strategic perspective begins with a low-cost business model, which has been consistent for the last 42 years (Rothman, 2016). Even during volatile times and when the economy was at its lowest, Southwest continued to remain profitable (Rothman, 2016). Further, Southwest’s operations are managed by a Board of Directors, which has adopted Corporate Governance Guidelines to further its goal of providing effective oversight of the business to ensure a maximum benefit for the shareholders, employees, and customers (Southwest, 2016).

Southwest operates in the United States airline industry, where they have enjoyed success for many years and are the largest passenger airline (Parnell, 2014). Historically, the airline industry has been an extremely volatile industry subject to numerous challenges. Among other things, it has been cyclical, energy intensive, labor intensive, capital intensive, technology intensive, highly regulated, heavily taxed, and extremely competitive (Southwest, 2016). Thus, to maintain a competitive advantage, on July 1st, 2014, they began offering international flights to Aruba, Jamaica, and the Bahamas (Jones, 2014).
Currently, they have 11 international destinations (Trevis Team, 2015).

According to Southwest’s proxy their main competitors are Delta, Alaska, United Continental, and Jet Blue (Southwest, 2016). During 2015, Southwest continued to benefit from marketing their points of differentiation from its competitors. In fact, in
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