Southwest Airline Is One Of Term Paper

Length: 20 pages Sources: 1+ Subject: Transportation Type: Term Paper Paper: #1715892 Related Topics: Spirit Airlines, Southwest Airlines, Sky High Airlines, Delta Airlines
Excerpt from Term Paper :

And many have got successful too in earning the market share. The emerging competition by new companies is a growing threat for the company and it should be tackled properly to avoid any future disturbances.

In order to further describe the competition Southwest Airlines is facing a Competitive Profile Matrix is designed. The following Competitive Profile Matrix tells about the tough competitors which are in a good position to have an edge over Southwest Airlines. It tells about the strengths and weaknesses of other competitors in contrast with Southwest Airlines.

Factors Weight Southwest Airlines United Airlines Delta Airlines Ratings Score

Ratings

Score 1. Low fares.15 4.60 3.50 4.60 2. Customer Service.15 2.30 4.60 3.50 3. Employee Relations.15 4.60 3.50 3.50 4. Rate of Expansion.10 2.20. 4.50 4.50 5. Marketing.15 4.60 4.50 4.50 6. Finance Structure.15 4.40 4.40 4.40 7. Management Policies.15 4.60 4.60 2.20

EXTERNAL FACTOR EVALUATION MATRIX

The external factors such as environmental, economic, social, cultural, demographic, political, legal technological etc. have a great influence on the company's performance. Thus to provide a better view of all these factors External Evaluation Matrix is designed. A rating of 4 here means the company is very good at reacting to all the external factors. Following are the external factors which contribute to the performance of Southwest airlines.

Weighted

Major External Factors Weight Rating Score Opportunities 1. The point to point market remains a growth market.10 3.30 2. Adding of more Long haul routes.10 3.30 3. Expanding internationally into other territories.10 1.10 4. Expanding east U.S. short haul routes.10 4.40 5. Established Economy.10 4.40 Threats 1. Great fuelling costs.15 2.30 2. Economic downturn.15 3.45 3. Policies of Competitors.5-4.20 4. Corporate cost saving measures.10 3.30 5. Merging of Airlines sharing agreements scheduling and marketing agreements.5-2.10 Total 1.0-2.85

The key strength Southwest contains to propose is that it is possibly the most economically firm corporation in the United States airline market as earlier confirmed. For thirty one consecutive decades it has created a profit; not falling into the red even following the consequences of the September 11th attacks in 2001. This permits southwest the liberty to amend policy and make judgments that a more greatly weighted corporation, such as Delta may not be able to reproduce.

Whereas financial constancy is a key factor to Southwest's accomplishment, there are numerous different competencies that have led to this place. To start with, Southwest has an tremendously optimistic status due to its better corporate veracity. Southwest was familiar for the ninth straight year in 2005 as one of America's Most well-liked Companies by Forbes and has detained the characteristic of being between Business Ethic's list of the top 100 Best Corporate Citizens for the last five years. (Annual Report 2005).

This benevolence permits Southwest to magnetize and sustain a solid group of workers - further than a quarter of a million job hunters applied for less than 3,000 posts previous year letting Southwest to keep high standards when filling positions. These faithful workers assist to counterbalance the risk Southwest faces by listing itself as a "low cost" airline. By containing employees that take pleasure in their positions and present themselves in a sociable, professional way, it adds excellence and worth by inserting an affirmative element in to a traveler's Southwest experience. Additionally, motivated Southwest workers were able to make use of their improved productivity and innovation to make the company's operating expense down by 1.5%. 82% Southwest's work strength is unionized and this may serve to keep staff satisfied, settled terms involving.".. hiring and retention rates, and costs for health care are items with potentially significant impact on the Company's operating results" (Annual Report 2005). This potential weakness could guide to decreased revenue as Southwest's labor demanding organization continues to expand.

An additional strength contributing to Southwest's economic accomplishment is their ready approval of new technology. Services for example ticket-less check-in, which lets travelers to board their flight not just more speedily but furthermore with no distressing about losing a paper boarding pass, and the Southwest desktop icon, a marketing policy that makes use of a

...

Southwest also utilizes a specialized scheduling system that permits 80% of their customers to fly non-stop and confines time used up at gates to twenty-five minutes or less. However again, this also presents a flaw as any system breakdown, specifically in the computerized check in terminals could lead to a loss of information, goodwill, and in the end, revenue. Also in the part of effectiveness, Southwest has hedged 73% of its fuel expenditure at $36 per barrel at a point when the price is costing most other airlines over $60 (Arndt). In 2005 without help, this prevarication policy condensed Southwest's fuel and oil expenses by over $900 million which allotted them more financial freedom as discussed above. The chance of this hedge reversing itself to turn out to be a liability to Southwest is highly doubtful as fuel costs are only estimated to increase for the projected future.

Regrettably, one of Southwest's supreme strengths is also one of its main weaknesses. The low cost of Southwest's tickets is the foundation stone of the company's strategy and describes the nature of Southwest. This discounted ticket rate unluckily has led to the eradication of a first class and a decrease in overall facilities (refreshments, in flight movies, etc.). As a result of lack of these apparently needless services, some in the marketplace may distinguish Southwest as the airline of the second class resident although Southwest's very good safety record and well-mannered staff. While ill-fated, Southwest is accessible with the chance to reinvent its image comparative to other airlines - a procedure it has already commenced by switching its traditional plane colors for a more reorganized system. Another area that presents both a weak point and chance for development is Southwest's geographic service. Southwest make tracks from 62 cities covering only two-thirds of the United States. No service is supplied to Canada or Mexico in spite of their closeness to existing Southwest routes. Though, Southwest's present policies plan for and make available the resources to allow for growth. In 2005, the company added thirty-three leased Boeing 737's to service two additional cities, increasing their overall capacity by 11%.

Superficially, Southwest faces equal problems to the rest of the airline industry but from an imprecisely less precarious position. Government system, such as the Wright Amendment that at present limits commercial flights out of Dallas Love Field (Southwest's primary hub), can put a strict limitation on Southwest's development potential and it's capability to function in certain markets. Adjustments to prior regulation, such as those prepared in reaction to terrorism, can also force a revise in current airline trends.

With the danger of terrorism still moderately high, post-September 11, 2001 security will carry on to cause a raise in costs. Resting on this, passengers are as a final point becoming relaxed again with air travel, and any attack.".. even if not made directly on the airline industry" (Annual Report 2005) would confidently have a negative impact upon airline revenues as citizens once again became terrified to get to the skies. Any loss of assurance in the protection of air travel would direct to a transfer to the use of other forms of transportation, leaving Southwest struggling to fill its seats. Optimistically, Southwest has used its strengths to last out the situation earlier and as long as the company keeps its existing policies, should be able to carry on any unexpected terrorist attack.

All associations have strengths and weaknesses in the practical areas of dealing. No enterprise is evenly strong or weak in all regions. Organizations should struggle to exploit upon the internal strengths and prevail over weaknesses

INTERNAL FACTOR EVALUATION (IFE) MATRIX

The Internal Factor Evaluation (IFE) Matrix go over the main points and calculates the main strengths and weaknesses in the functional areas of a business, and also grants a way of recognizing and estimating the relationships among those areas. Scores can range from 1.0 to 4 with 2.5 being the average. Scores below 2.5 point out that a corporation is weak internally.

Serial number

Key External Factors

Weight

Rating

Score

Strengths

Recognized as one of the world's safest airlines

Best customer satisfaction ranking of any major U.S. airline for the eighth year in a row

U.S. only major short-haul, low-fare, high frequency, point-to-point carrier

Lowest debt among U.S. carriers

Lowest cost airline in its market

Twenty-four years of operating at a profit

Low price fares, no frills

Weaknesses

Commitment to only Boeing 737 aircraft

Avoids formal strategic planning and management

Unionized labor force

Few long-haul flights

No centralized reservation system

No international flights

Low customer service budget

Weighted

Strengths-weaknesses-opportunities-threats (SWOT) Matrix

The strengths-weaknesses-opportunities-threats (SWOT) Matrix is a tool that assists manager to build up four types of strategies. The four sorts are Strength-Opportunity (SO) Strategies, Weakness-Opportunity…

Sources Used in Documents:

Bibliography

Gittell, Jody Hoffer. The Southwest Airlines Way Using the Power of Relationships to Achieve High Performance. New York: McGraw-Hill, 2003.

More City Pairs Await Southwest - Kelleher Says Opportunities Remain Using Airline's Formula." Aviation Week & Space Technology. 143. 6 (1995): 40.

A www.marketingmix.com.au / www.mcdonalds.com / www.bbc.co.uk


Cite this Document:

"Southwest Airline Is One Of" (2008, February 14) Retrieved September 20, 2021, from
https://www.paperdue.com/essay/southwest-airline-is-one-of-32238

"Southwest Airline Is One Of" 14 February 2008. Web.20 September. 2021. <
https://www.paperdue.com/essay/southwest-airline-is-one-of-32238>

"Southwest Airline Is One Of", 14 February 2008, Accessed.20 September. 2021,
https://www.paperdue.com/essay/southwest-airline-is-one-of-32238

Purpose of Paperdue.com

The documents we provide are to be used as a sample, template, outline, guideline in helping you write your own paper, not to be used for academic credit. All users must abide by our "Student Honor Code" or you will be restricted access to our website.

Related Documents
External Analysis Southwest Airlines One of United
Words: 1370 Length: 4 Pages Topic: Business Paper #: 80103599

External Analysis Southwest Airlines One of United States' most successful airlines in the business is Southwest airlines. The company has been one of the most successful businesses in the economy with no case of worker layoff or strike being recorded in the organization. The company has dedicated its commitment to ensuring it provides a favorable environment for its workers. The company's corporate culture has played a significant role in the success

Southwest Airlines Culture
Words: 1816 Length: 6 Pages Topic: Business Paper #: 57296120

culture in an organization using Southwest Airlines as a model. It uses Geert Hofstede Four Dimension of Culture to analyze the company and provides an over view of how the company's policies enable it to secure a top position in the industry. It uses 5 sources in MLA Format. Globalization has changed the way people do business today. Factors like strategies, resources or capacity to produce has become secondary to

Southwest Airlines
Words: 1071 Length: 3 Pages Topic: Transportation Paper #: 72998436

Southwest Airlines: The corporate culture of the LUV airline Southwest Airlines is known for a unique corporate culture that is particularly distinctive, in contrast to its competitors. Southwest Airlines has "a raucous corporate culture that is the exception in the grim airline industry" (Bailey 2008). From the Airline's inception, its founder and chairman, Herbert D. Kelleher ensured that there was "a startling amount of office hugging and kissing in lieu of

Southwest Airlines: We Love Bags Determine How
Words: 990 Length: 3 Pages Topic: Business Paper #: 16642136

Southwest Airlines: We Love Bags Determine how Southwest Airlines' corporate culture differs from other airlines. Southwest Airlines was founded on the premise that an airline needs to put its customers and their needs at the center of all operations, and further create a customer experience that is highly differentiated, memorable and sought-after by passengers. Southwest has surpassed even its own initial expectations in these areas. The culture of Southwest galvanizes the employees,

Southwest Airlines
Words: 1223 Length: 4 Pages Topic: Transportation Paper #: 99964912

Southwest Airlines Effectiveness of Southwest Leadership Southwest management has defined a clear and simple business purpose. The management has also chosen the right business model that supports the business purpose. The management consistently demonstrates the core values and behaviors derived from the key business purpose (Emerald, 2005). The quality of the airline customer service is synonymous with warmth, friendliness, individual pride, and company spirit. This has kept the staff morale high. The

Southwest Airlines Air Travel Is Still the
Words: 1040 Length: 4 Pages Topic: Transportation Paper #: 64845007

Southwest Airlines Air travel is still the preferred means of transport in the United States of America largely because it is faster. However, it has in the recent times experienced decreased growth from the peak in before the 1990s. The period between 1980 and 1990, there was a sharp increase in the number of people travelling by air. Today, major carriers have cut costs in the face of intense rivalry and