Southwest Airlines Strategic Analysis: Mission, Industry & Competition
This case study examines Southwest Airlines' strategic positioning in the wake of the Wright Amendment's expiration, which opened new market opportunities for the carrier. The paper proposes revisions to Southwest's vision and mission statements to reflect its expanding geographic reach, then analyzes the broader airline industry's competitive landscape, including the effects of deregulation, consolidation, and globalization. Finally, it evaluates Southwest's competitive advantages, highlighting how the acquisition of AirTran accelerated international growth and contributed to significant profit gains, ultimately affirming the strength of Southwest's long-term strategic foundation.
- Introduction and Strategic Context: Wright Amendment expiration creates expansion opportunity
- Vision and Mission Statement Analysis: Revised mission reflects international route growth
- Industry Analysis: Deregulation, globalization, and consolidation reshape airlines
- Competitive Analysis: AirTran acquisition drives profits and international reach
- Conclusion: Southwest strategy remains sound; flexibility is key
✍️ How to write this paper — guide, tools & examples ▾
What makes this paper effective
- Grounds every strategic recommendation in a real policy change — the expiration of the Wright Amendment — giving the analysis a concrete, timely rationale rather than generic advice.
- Balances original analysis with direct quotations from industry sources (Fortune, Forbes, Strategy&), demonstrating evidence-based argumentation at the undergraduate level.
- Presents the mission and vision revision in a clear before/after format, making the analytical intent immediately transparent to the reader.
Key academic technique demonstrated
The paper demonstrates applied strategic analysis by linking an external regulatory change (Wright Amendment expiration) to internal organizational responses (mission revision, acquisition strategy). This cause-and-effect reasoning — using real financial figures from the AirTran integration to validate strategic decisions — shows how business case studies connect macro-level environmental shifts to firm-level outcomes.
Structure breakdown
The paper opens with contextual framing around a regulatory event, moves into a prescriptive mission revision with side-by-side comparison, then broadens to industry-level forces (deregulation, globalization, consolidation), and closes with a firm-specific competitive analysis anchored in the AirTran acquisition data. The structure moves logically from external environment → organizational identity → competitive positioning.
Introduction and Strategic Context
Southwest Airlines stands out among its competitors in the travel industry for many reasons. One of those reasons is the company's ability to change with the times and adopt current strategies that reflect market trends — trends that can affect the company's future profitability.
The recent expiration of the Wright Amendment suggests that Southwest Airlines should adopt a more relevant approach to its business model, one that reflects this policy change. The amendment's expiration allows the company to expand its services to many new markets, essentially deregulating many of the past agreements relevant to the airline industry. DeVoss (2014) agreed with this idea and saw an opportunity for Southwest to grow by maximizing deregulation efforts. He wrote: "The main beneficiary of the Wright Amendment's demise is Southwest Airlines. It has spent the past decade fighting for the right to fly nonstop from its home base in Dallas to major cities throughout the continental U.S."
Vision and Mission Statement Analysis
The current vision and mission statement that Southwest promotes needs to be altered to represent this new evolution in the way the company conducts business. The existing statement reads as follows:
Our Purpose: Connect people to what's important in their lives through friendly, reliable, low-cost air travel.
Our Vision: To become the World's Most Loved, Most Flown, and Most Profitable Airline.
Our Purpose: To connect people to a wide array of destinations that makes this company truly unique in its ability to serve the most and highest-quality locations.
Our Vision: To become the world's most flown and profitable airline while serving the most diverse locations around the globe.
Industry Analysis
Southwest operates within the regional airlines segment of airline services — a highly competitive and highly visible industry given the volume of air travel in modern culture. The company's current expansion, however, is pushing it beyond regional status into a more global competitive position. Recent additions of routes to South America and Mexico have elevated Southwest's reach to an international scale.
The airline industry is changing very rapidly, and interesting trends have developed in accordance with political, social, and economic transformations. As the globalization of commercial trade and international interests grows in popularity, it follows naturally that this industry will grow alongside those changes. The demand for air travel has created new markets, new competitors, and new opportunities that manifest in many different ways.
Deregulation has caused major shifts in the industry, as companies find ways to expand their markets in more competitive and open ways. Along with these added benefits come added pressures to perform. Today's airline consumers are very selective, and expectations remain high for low-cost fares. Achieving this balance is essential for organizations that wish to remain profitable and maintain a competitive advantage.
Clayton (2015) suggested that mergers and acquisitions also play a role in transforming the industry: "And consolidation will play a role in the industry as well. To a large degree, the industry's low margins are driven by its fragmentation, and the resulting overcapacity in many markets. Still, U.S. carriers have been able to improve their financial performance dramatically, primarily through bankruptcy restructuring and a series of major mergers." This continual forming and reforming of the airline industry presents a persistent challenge for carriers seeking long-term stability.
Conclusion
It appears the Southwest leadership team has built upon a strong foundation, and executing the right move at the right time reflects a proper and practical strategic solution to any foreseen modifications that may be needed. The need to remain flexible and transparent are key to determining a company's place within the low-cost carrier hierarchy, and these qualities allow certain opportunities to be recognized and acted upon when they arise. A wholesale overhaul of Southwest's strategic posture seems unnecessary at this time, as the company has found an effective means to navigate a complex market by leveraging its advantages in ways that have been proven over time.
References
Clayton, M. (2015). 2015 Aviation Trends. Strategy&, 2015. Retrieved from http://www.strategyand.pwc.com/perspectives/2015-aviation-trends
DeVoss, D. (2014). Southwest Airlines gets a boost from expiration of Wright Amendment. Fortune, 13 Oct 2014. Retrieved from http://fortune.com/2014/10/13/southwest-airlines-gets-a-boost-from-expiration-of-wright-amendment/
Team, T. (2014). What has AirTran done for Southwest Airlines? Forbes, 11 Dec 2014. Retrieved from http://www.forbes.com/sites/greatspeculations/2014/12/11/what-has-airtran-done-for-southwest-airlines/
Southwest Airlines Webpage. Purpose and Vision Statement. Viewed 16 Jun 2015. Retrieved from https://www.southwest.com/html/about-southwest/careers/culture.html
Create your account
Always verify citation format against your institution’s current style guide requirements.