Southwest Internal Analysis
Southwest Airlines Internal Analysis
Introduction
This internal business analysis is on Southwest Airlines, which was founded in 1967 by Rollin King and Herb Kelleher. The main focus for Southwest Airlines was to provide low cost flights for their customers, and also have exceptional customer satisfaction. Southwest is a leading airline company that continues to do well in an industry that has been historically challenging. For instance, in the span of two years (2005-2007) five major airlines have filed for bankruptcy. The challenges are great in the airline industry, because competitors are trying to imitate the “low-cost” offering of Southwest. Many companies have tried to do what Southwest has done, and many have failed to stay in business. Surprisingly, many of those companies were started by ex-employees of Southwest. Southwest currently has a profitability record for the past thirty six years, which is spectacular in such a challenging industry. Herb Kelleher has been replaced by Gary C. Kelly, as the president when he resigned in May of 2008. Southwest is in the process of expanding the locations they serve so that they can increase market share, and also find ways to cut costs without losing their quality. In order for southwest to continue their consecutive financial success there is a necessity for excellence in the execution process of their strategy.
Business Level Strategy
The business level strategy (BLS) that Southwest focuses on is Cost Leadership. They are the leading airline in the United States for providing low-cost fares to their broad customer base. Southwest has found innovative ways to reduce cost within their cost structure enabling them to offer lower fares than competitors and still maintain a profit. One way that has helped Southwest save time and money is their standardization of their airline fleet. This tactic is known as the “one-model-fleet” by the airline. Having a single airplane model in a fleet has allowed
Introduction
This internal business analysis is on Southwest Airlines, which was founded in 1967 by Rollin King and Herb Kelleher. The main focus for Southwest Airlines was to provide low cost flights for their customers, and also have exceptional customer satisfaction. Southwest is a leading airline company that continues to do well in an industry that has been historically challenging. For instance, in the span of two years (2005-2007) five major airlines have filed for bankruptcy. The challenges are great in the airline industry, because competitors are trying to imitate the “low-cost” offering of Southwest. Many companies have tried to do what Southwest has done, and many have failed to stay in business. Surprisingly, many of those companies were started by ex-employees of Southwest. Southwest currently has a profitability record for the past thirty six years, which is spectacular in such a challenging industry. Herb Kelleher has been replaced by Gary C. Kelly, as the president when he resigned in May of 2008. Southwest is in the process of expanding the locations they serve so that they can increase market share, and also find ways to cut costs without losing their quality. In order for southwest to continue their consecutive financial success there is a necessity for excellence in the execution process of their strategy.
Business Level Strategy
The business level strategy (BLS) that Southwest focuses on is Cost Leadership. They are the leading airline in the United States for providing low-cost fares to their broad customer base. Southwest has found innovative ways to reduce cost within their cost structure enabling them to offer lower fares than competitors and still maintain a profit. One way that has helped Southwest save time and money is their standardization of their airline fleet. This tactic is known as the “one-model-fleet” by the airline. Having a single airplane model in a fleet has allowed