Southwest Airline CASE Study Assignment-converted-converted PDF

Preview

Summary

Download Southwest Airline CASE Study Assignment-converted-converted PDF

Description

Assignment – Strategic Management Southwest Airlines Case Study Submitted by Hamza – 14154

PORTER FIVE FORCES ANALYSIS RIVALRY:

 Seven major low-carriers operating domestically with similar services. THREAT OF SUBSTITUTES:

 Low level threat from car, train, ship and buses. NEW ENTRANTS:

 Moderate level threat from new airlines that can attract passengers of southwest. POWER OF SUPPLIERS:

 Suppliers have high power as software and hardware vendors are need in long term.  High dependency on Boeing aircrafts. POWER OF BUYERS:

 Buyer has similar alternatives available in the market.

SWOT ANALYSIS STRENGTHS:          

Market leader. Low cost business model. Strong financial performance. More departures than any other competitor. High capacity usage. Employees are highly motivated. Low price tickets. Pilots and other employees are highly productive. High frequency service. Good customer servic

SWOT ANALYSIS STRENGTHS:         

Market leader. Low cost business model. Strong financial performance. More departures than any other competitor. High capacity usage. Employees are highly motivated. Pilots and other employees are highly productive. High frequency service. Good customer service.

WEAKNESS:      

Doesn’t has international flights. Only one supplier Boeing. Poor short-term liquidity situation. Declining passenger revenue yields. Few morning flights offered. Booking is only made directly.

OPPORTUNITIES:       

Ability to add scheduled flights. Low price enables growth in market share. Code sharing with ATA airlines. Positive outlook for US airline industry. International markets are not yet served. New technology will increase air travel. Longer flights are a growing market.

THREATS:     

Big companies emulate Southwest’s low-cost model. Difficulty securing new gates at existing airports. Increasing competition. Uncertainty of demand. Decline of leisure travel due to depressed economy and terrorism.

STRATEGY   

Employees are considered internal customers. Employees are considered first customers and passengers are considered second customers. Low costs-low fares.



No frills.

STRATEGY       

Employees are considered internal customers. Employees are considered first customers and passengers are considered second customers. No frills. Low costs-low fares. Frequent flights. Short-haul trips. On-time performance.

COMPETITIVE ADVANTAGE                   

Employees are very productive (turnaround time is 15 minutes compared to others having average turnaround time of 35 minutes. Fun in air. Cost cutting by ignoring non-core activities. Low salary for pilots because only a certain plane is used for which much training isn’t required. Cost structure is efficient due to which break even is achieved at lower volume in comparison to other competitors. Less crowded airports are used which contributes to fuel efficiency. Cheap flights. Good customer service. Comfortable seats. Easy check-in. Flights are on time. Cost is 7.1 cent/mile. Air plane does 11 hours airtime on average compared to competitors with only 8 hours average air time. 10.5 flights per gate compared to 4.5 flights per gate of competitors. 2443 passengers per employee compared to 800 passengers per employee. 81 employees per air plane compared to 150 of competitors. Trust. Non-adversarial relations. Over sharing of information.

VRIO ANALYSIS RESOURCES:

1. First and second checked bags fly for free.

VRIO ANALYSIS RESOURCES:

1. First and second checked bags fly for free. 2. Their increased international presence after purchase of AirTran. 3. Low-cost strategy.

Value

Rareness

Imitability

✔

✔

✔

Organizatio n ✔

2

✔

✔

✘

✔

3

✔

✔

✔

✔

Resourc e 1...