South West Airlines Company

Introduction

In 1967, Herb Kelleher and Rolling King founded Southwest airlines, and it started its
operations in 1971, traversing Texas cities, San Antonio and Houston (Cournoyer, 2021). The
Airline’s leaders used the love theme by serving drinks that were famously labeled the “love
options” and “love machines” for the ticket tool to attract customers (Booker, 2019). The
company offered low prices to customers compared to driving to their destination. The
employees also played an essential role in influencing the consumer’s decisions. However, the
company uses the generic competitive strategy to outdo its competitors in the airline business,
such as American Airlines, United Airlines, and Delta Air Lines. The approach strengthens
Southwest airline’s competitive advantage and position in the airline industry.
Porter’s Generic Competitive Strategies

The company uses the cost-leadership strategy by its air ticket prices and costs minimal
(Cournoyer, 2021). The strategy’s primary purpose is to maintain the price of goods and services
lower than competitors, and the goal is to tap into the broader market (Lee, Hoehn‐Weiss &
Karim, 2021). Accordingly, the research and development team has to identify products they can
create cost-effectively, and the management must also establish ways to lower production and
marketing costs.

SWOT Analysis

Strengths
Southwest Airlines’ primary strength is its low-cost business approach and the point-to-
point commuting channel. For example, the customer can book flights at as low as $45 through
the Low Fare Calender (Gupta & Mishra, 2016). The company’s “Luv” culture allows all its
consumers to feel like part of the family, which improves customer loyalty. The company also

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has the best employer policy, and it is among the best companies in America. Since its inception,
Southwest Airlines has used a single type of aircraft, Boeing 737s, for its operations (Booker,
2019). The approach minimizes the training resources for flight operators, maintenance, and
scheduling.
Weaknesses
On the contrary, the company lacks diversity because it depends solely on the airline
industry (cargo and air travel) for income. Activities that impede domestic and international
travel like COVID-19 might spell substantial financial losses. The other setback is an
overreliance on Boeing 737s. In 2019, after the Federal Aviation Administration gave the notice
to ground all the MAX aircraft after reports of fatal accidents, the company could not continue
with international flights (Booker, 2019). Currently, it operates in the United States market,
reducing its profit margin and sustainability.
Opportunities
Southwest Airlines has opportunities to increase its overall revenue. The company can
introduce new international flights to territories like Hawaii to increase its revenue streams. The
company can also enhance the booking process by incorporating consumer e-payment options.
Southwest Airlines can exploit the upcoming technologies like the biometric boarding kiosks to
hasten the security process.
Threats
The company is currently facing the primary threat of stiff competition from other
airlines like Delta, Jet Blue, United, and Spirit airlines. The uncertainties in the current economy,
especially after the COVID-19 pandemic, have reduced profit margins for major airline
companies. This has also put the future sustainability of businesses in the industry in limbo.

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Plan to Implement a Global Market

The Southwest Company still operates within the US market but has an opportunity to
expand into the international market. The company needs to evaluate its needs and set the ideal
goals. First, the company must research the prospective global market and identify consumer
needs, culture, legal, social, and economic aspects. The company must also determine the various
facets of the supply chain, learn how to set prices, and negotiate deals to cut costs. Finally,
Southwest Airlines must understand the various regulations and laws governing air travel in
foreign countries.

Conclusion/Recommendations

The company needs to incorporate diversity in its culture to offer more services besides
transportation. The approach increases sustainability such that if the airline industry does not
produce enough revenue, other businesses can supplement.

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References

Booker, B. (2019, December 17). Southwest Airlines nixes Boeing 737 Max planes from its fleet
until April. NPR. https://www.npr.org/2019/12/17/788863022/
Cournoyer, A. (2021, August 20). Southwest Airlines: The low-cost strategy prevails through the
pandemic. Seeking Alpha. https://seekingalpha.com/article/4450791-southwest-airlines-
the-low-cost-strategy-prevails-through-the-pandemic
Gupta, G., & Mishra, R. P. (2016). A SWOT analysis of reliability-centered maintenance
framework. Journal of Quality in Maintenance Engineering, 22(2), 130-145.
Lee, C. H., Hoehn‐Weiss, M. N., & Karim, S. (2021). Competing both ways: How combining
Porter’s low‐cost and focus strategies hurts firm performance. Strategic Management
Journal, 42(12), 2218-2244.