STRATEGIC MANAGEMENT

Southwest Airlines

Table of Contents

Mission & Vision Statement1

Strategic Competitiveness against other leading airlines1

Strategic Competiveness Creation Strategic2

Point to Point Flying Strategy2

Cost Effectiveness3

Customer Satisfaction3

Employees Management4

Aggressive Marketing Strategies5

Corporate Governance5

Has Southwest created any value?6

Southwest Competitors and Industry Model7

Rivalry7

Competitive Behavior and Dynamics9

Market Expansion9

Monetary Management9

Marketing9

Operations10

Growth during 9/11 incident10

Financial Analysis11

Effects of environment on southwest operation12

Economic12

Political12

Social12

Technological13

Southwest Airlines market position13

Conclusion13

References14

Southwest Airlines

Mission & Vision Statement

The mission statement of south-west airline is divided into two parts. 1st is dedicated to their customers and 2nd toward their employees. The main focus of south west airline is on their customer services. They dedicate their highest quality to their customers in terms of warmth, friendliness, individual pride and sprit. They tend to drive this strategy through their second part of their mission statement, which states that they are the company of people, to have the quality of work they believe on having quality employee, who are motivated enough to work for the company's benefit.

Vision statement is a long-term goal. South west airlines had it defined in a very uncomplicated and undemanding way. South west claimed that, they are company of people and not planes. Hence, through customer satisfaction they tend to increase their growth rate in terms of both customer satisfaction as well as capitalizing of profits. They tend to attain success in the long term.

Strategic Competitiveness against other leading airlines

The domestic airline industry of USA encountered a decline in late 1990's with a decrease in 72% of overall customer due to air fares in industry (Richard, 2004). They were facing no growth in industry, during that time. Simultaneously, an intense competition and rivalry was faced by all airline companies. Southwest Airlines (Being 4th largest carrier organization in terms of traffic flown) encountered similar fare wars with narrowing profit margins.

In this state of crisis, Southwest Airline stood out through product differentiation and low-cost strategy. They didn't divert, and were more focused was towards their mission statement, of customer satisfaction. They successfully differentiated themselves from their competitors and manage to sustain marginal profitability.

Strategic Competiveness Creation Strategic

At South West, low cost and product differentiation provision of the best customer services, is the strategic competitiveness advantage. Major competitors of Southwest face Direct (Regional Competition). Direct competition includes, AMR Corporations, JBLU (JetBlue Airways Corporation), UAL (United Continental Holding). These are regional airlines. Indirect competition is with foreign airlines.

An organization achieves competitive advantage only, when they adhere to their mission, vision and objectives (Robin, 2007). During 1990's when Southwest was facing a crisis, the developed proper strategic plan towards product differentiation. They develop a series of objective to achieve competitive advantage.

Point to Point Flying Strategy

Their first focus was towards “Point to Point Fly Services” strategies, which are short trips with high frequency of flight. They aimed to maintain their commitment to its employees and customers. The emphasized on their motto “Keep it cheap and keep it simple”. They catered almost 29 states of America in more than 55 cities. They had almost 2700daily flights, of least travel time of I ...