Southwest Airlines

1. Mission

2. Vision

3. Values

4. Objectives

5. Southwest Airlines Strategy

 Low costs/low-fares strategy.
 Frequent Flight
 Tagline: Freedom to fly.
 Short-haul trips
 Frequent point-to-point departure.
 Friendly customer service
 Scheduled Service
 No frills
 No bags fees
 Fare promotion to stimulate ticket sales on flights.
 On-time performance.

6. PESTEL Analysis of Southwest Airlines

Political Factors:
o Terrorist Attack: Different types of terrorist attack in the USA due to political
reason hampering the airlines business.
o Government Bodies: Government bodies significantly influence domestic
operations of Southwest Airlines.

Economic Factors:
o Fuel Costs: Airlines industry severely affected by fuel costs. A rise in the price of
oil has a major impact upon Southwest Airlines profitability.
o Economic Downturn: Due to economic downturn, customers’ demand for air
travel has remained underrated and indeed undergone growth (Southwest, 2010).
Social Factors:
o Strong Customer Service: Southwest Airlines has a strong commitment towards
its customer service. The company hires a customer service aspirant based on
their attitude, regardless of experience.
o Saving minded: As Southwest Airlines always thinking about their customers,
they are saving minded just like their customers in terms of costs.
o Price sensitive: Southwest Airlines is very price sensitive that’s why they offer
very low fares.
o Costs cut: They always try to cut their cost so that they can offer a cheaper price
ticket also at same time they can make profit.

Technologic Factors:
o Advanced Technology: It has enabled Southwest airline to expand its outreach
directly to through customers through e-commerce.
o Convenience: Emergence of information and communication technologies has
enabled robust communication and subsequently provided customers with an
alternative for frequent travelling.
o Cutting Cost: Southwest Airlines was able to introduce ticketless travel through
the use of technology.
o Additional Technology: Additional Technology such as Southwest inflight Wi-
Fi.

Environmental Factors:
o Research on Alternative Bio Fuel: Alternative bio fuel might make people be
more environment sensitive.

Legal Factors:
o Wright Amendment: The 1979 Write Amendment prohibited the airline to fly
non-stop or provide through-plane service from Dallas Love Field to any other
than 7 permitted cities. Recently, a law has been passed to repeal the Wright
Amendment to be in effect in 2014 (Thompson and Gamble, 2012).
o Legal Battles Against Rivals: Southwest Airlines has no numerous occasions
won legal battles against rivals in the US court (Thompson and Gamble, 2012).
7. Porter’s 5 Forces of Southwest Airlines

Entry Barriars
(Moderate)
- There are high barriars to
enter this industry it
requires high capital
investment and making
profit has become difficult
due to price wars and low
profit margin.
- limited availability of
landing slots.

Burgaining Power of Competitive Rivalry Burgaining Power of

the Suppliers
(High)
-Boeing is the supplier
of aircrafts to
Southwest Airlines
thats why the
burgaining power of the
boeing is high. Airlines are the 7 major low
-Heavily dependent on
oil for its profit margin,
which implies high
burgaining power of the
suppliers.
(High)
-In airlines industry,
competitive rivalry has
been increasing especially
through mergers and
acquisitions. Direct
competitors of Southwest
cost carriers operating
domestically with similar
service such as JetBlue
Airways and Allegiant
Airways.
Buyers
(High)
-Due to widely
available information
technology tools
consumer can
compare flight
services and price
beforee making final
selection. As switching
cost for consumer is
very low, the
burgaining power of
the consumer is high.

Threats of Substitutes
(High)
-There are many
substitutes in terms of
long distance travel such
as cars, trains, ferries and
these are usually cheaper
but as airbus has the
advantantage in terms of
time threat is realtively
low.
8. SWOT matrix of Southwest Airlines

Positive Negative
Internal Strength Weakness
- Low fares - Execution of
- Strong customer service promotions
- Employee satisfaction - Limited flight offerings
- No bag fees - Carry small amount of
- Scheduled Service freight and cargo
- Leadership - Inconvenience to
- Social Media Presence business customers
- Stable profitability - Little room for the
strategic management

External Opportunities Threats

- Business/Government - Consumers resistance
Accounts to higher fares
- Better fuel economy jets - Fluctuation in fuel
- Operate at international price.
level - Slowing Global
- The development of tech Economy
to create IT innovation. - Rising labor costs
- Focus on popular - Government
destinations. regulations and
restrictions.