Southwest Airlines
1. Industry and Market – the Airline Industry enjoys a Global Market
2. External Environment – Airlines operate in a political environment that’s very regulated and restricted. The demand for air travel has increased significantly over the years.
3. Internal Environment – Southwest faced many of the same obstacles that outer companies in the airline industry are dealing with.
4. Financial Analyses – The airline industry showed record profit and operating margins, but passenger and cargo yields declined for a fifth straight year.
5. Economic Condition for Industry – demand (increase), profits (increase), oil prices (decrease)
6. Key Trending Factors –
Demographic – The future of U.S. travel and tourism will be defined by the growth in the millennial generation.
Social – The demand for air travel has increased significantly.
Economic – Fluctuation in oil prices is another major factor that impacts airlines’ profitability.
Environmental - The low-cost carriers like Southwest have been replacing their old aircraft with new fuel efficient ones.
7. SWOT Analysis –
Strength: Southwest Airlines is known to be one of the major low cost airline leaders and an initiator in being a low cost carrier.
Weakness: It uses only the Boeing 737 as its aircraft, so it has a single producer.
Opportunity: There are still many National and International markets that are still not tapped, and Southwest can expand to those markets.
Threat: Online ticket reservation system by the competitors.
8. Key Issues of the case –
no first class/fancy clubs
no baggage transfer to other airlines
fuel hedging not profitable in recent years
9. Critical Issue of the case that needs attention first – Fuel hedging
10. Assumptions in the recognition of this critical issue – Fuel hedging is no longer cost-effective - Southwest will have to find other methods of fuel or pay what other airlines pay.
11. 2 to 3 alternatives to address this critical issue: ?
12. Choose 1 of the alternatives to implement: ?
13. Describe the overarching strategy you propose and within which this alternative fits:?
14. Explain your plan to implement this alternative: ?
15. Identify the critical organizational functions of the organization needed for implementation:?
16. Identify the processes needed from each of these critical functions for implementation: ?
17. Describe the Balance Scorecard metrics to measure the success of this implementation:?
18. Describe any ethical concerns with this critical issue and plan implementation:?
19. Describe any environmental concerns with this critical issue and plan implementation:?
20. Describe any social concerns with this critical issue and plan implementation:?
21. Write a brief summary of your recommendation and the value you propose this organization may gain from this implementation. (one paragraph – keep this to a maximum of 100 words)?