Case 4 Southwest Airlines
CASE 4 Southwest Airlines: Flying High With Low Costs
Southwest Airlines sent its first flights aloft in 1971. After almost 45 years, Southwest was so successful that the company was considered, in many ways, the crown jewel of the airline industry. The company had achieved the longest continuous stretch of profitability in the history of the airline industry and was consistently ranked in the top 10 on Fortune’s list of “Most Admired Companies,” a list that spanned all industries. Southwest’s executives liked to say that they strove toward a triple bottom-line of People, Planet, and Performance.
In 2021 Southwest was on strong financial ground, despite the fact that the prior 20 years had been some of the most difficult in aviation history. The airline industry had been particularly hurt by the 9/11 terrorist attack, the “great recession” of 2008-2009, and the pandemic of 2020. The company had shown strong and steady growth in revenues and profits over the years (See Exhibits 1 and 3). (Excerpt)1. What business is Southwest in, what is its generic strategy? What do you think Southwest’s long term goal is?
2. 1) What are Porters 5 Forces. Competitive rivalry – competitive rivalry among competing sellers? Supplier power – are suppliers limited? Why? Buyer power – do the customers hava a say in the company? Threat of substitution – substitute products? Threat of new entry – who are they?
2.2 ) How do you determine the companies’ five competitive strategies. (Broad Low Cost, Broad Differentiated, Focus Low cost, Focused Differentiation, Best solution).
3. Use SWOT Analysis to analyze the case. (Strengths, Weaknesses, Opportunities, and Threats)
4. What’s going on with the case? (Is there a problem? What next? Are they doing good?)
5. Suggestion/advise/recommendation for the case.
Answer each question in no less than 200 words and please make sure all the answers are based on the case. Do not use the other outside resources.