Implementation, Strategic
Business Proposal
Abstract
Southwest Airlines Co. is one of the United States largest airlines. It was created in 1967, has 46,000 employees and does about 3,400 flights a day. Although the company has been around for years there is always more that a company can do to improve their business, increase revenue, and minimize costs. Southwest is one of many different airlines that the United States has to offer and they need to make themselves stand out in order for people to want to use their service. This business proposal will help the company finds way to improve.
Finances
Some important information to start with would be the financial statistics. Obviously these are for 2012. The net income was $421 million. The total operating revenue was $17.1 billion. Net income growth was 93% and net margin was .4%. They are continuing to improve as a company, and it is believed that they will continue to grow at a good pace. They have the strongest Balance Sheet within the airline industry ("Southwest corporate fact," 2013).
Lower Prices & Marginal Costs One of the most important ways for Southwest Airlines, or really any airlines, to keep their prices down is to keep fuel prices down. Recently there has been an increase in the price of oil; therefore, Southwest has to slightly raise the prices of their flights in order to compromise. Even though they did have to raise their prices, Southwest still continues to be one of the most reliable, low-cost carriers there is.
If the airline is able to find a way to keep cheaper oil then they can keep their prices low. They can then keep their prices low and this will attract more customers. By doing this they can increase their revenue by being the top choice of airline for customers. Another way they could increase revenue is to increase technology. One example would be using kiosks. In doing this less employees will be needed, the company can save money on wages.
Marginal costs are the increase or decrease in the
Abstract
Southwest Airlines Co. is one of the United States largest airlines. It was created in 1967, has 46,000 employees and does about 3,400 flights a day. Although the company has been around for years there is always more that a company can do to improve their business, increase revenue, and minimize costs. Southwest is one of many different airlines that the United States has to offer and they need to make themselves stand out in order for people to want to use their service. This business proposal will help the company finds way to improve.
Finances
Some important information to start with would be the financial statistics. Obviously these are for 2012. The net income was $421 million. The total operating revenue was $17.1 billion. Net income growth was 93% and net margin was .4%. They are continuing to improve as a company, and it is believed that they will continue to grow at a good pace. They have the strongest Balance Sheet within the airline industry ("Southwest corporate fact," 2013).
Lower Prices & Marginal Costs One of the most important ways for Southwest Airlines, or really any airlines, to keep their prices down is to keep fuel prices down. Recently there has been an increase in the price of oil; therefore, Southwest has to slightly raise the prices of their flights in order to compromise. Even though they did have to raise their prices, Southwest still continues to be one of the most reliable, low-cost carriers there is.
If the airline is able to find a way to keep cheaper oil then they can keep their prices low. They can then keep their prices low and this will attract more customers. By doing this they can increase their revenue by being the top choice of airline for customers. Another way they could increase revenue is to increase technology. One example would be using kiosks. In doing this less employees will be needed, the company can save money on wages.
Marginal costs are the increase or decrease in the
References: Marginal revenue and marginal cost. (2013). Retrieved from http://www.khanacademy.org/science/microeconomics/firm-economic-profit/average-costs-margin-rev/v/marginal-revenue-and-marginal-cost McConnell, C. R., Brue, S. L., & Flynn, S. M. (2009). Economics: Principles, problems, and policies (18th ed.). Boston, MA: McGraw-Hill Irwin. Southwest corporate fact sheet. (2013). Retrieved from http://www.swamedia.com/channels/Corporate-Fact-Sheet/pages/corporate-fact-sheet