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Southwest Airline Strategic Formulation Case Study Analy
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OutlineKate
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Introduction
BCG CHAT/SPACE Matrix
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SWOT analysis
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Possible strategies and their impacts on the organization (Grand Strategy Matrix)
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Alternative Strategies (Corporate, Business, and Functional)-Bundles of Strategy
Yes No
1. Introduction
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Despite a variety of corporate bottlenecks, such as Southwest Airline, few airline sectors
been as effective strategic. It has nevertheless pulled from them to be a resounding airlin
company, despite having gone through some legal battles. There is a need, though, for a
hallmark of policies within the domestic ridership model. These approaches can be cust
to provide travel luxuries such as flight meals and amenities and to provide multiple sea
choices such as first and business class accommodation (Jackson, 2011). This will help t
include what Karami (2003) considers to be a significant component of the achievemen
business. His view of strategic management involves the creation of an organization’s
groundwork priorities, the identification of the right targets for those goals and the effor
achieve them in time (Karami, 2003).
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The strategic formulation should
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you are waytheahead
accepting for Southwest
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recogniseKate
and boost competitiveness for key customer groups, namely: travel agents, co
travel managers, as well as individual customers (Jackson, 2011). Of course, marking th
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the line would contribute to the introduction of policies that take care of that, which wou
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definitely go along with what Karami refers to as…” prioritising strategies to pursue ” (K
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2003). For
A minute agohim, the strategic formulation includes the interpretation of any strategy
formulation phase that has specified stages that are time-bound (Karami, 2003).
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Yes No
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2. SWOT Analysis
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SWOT analysis has seemingly been important in Southwest Airline’s strategic formulati
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the assessment and recognition of a variety of regions. In general, SWOT is used in map
anPROJECTS/REPORTS
organization/business entity’s study of strengths
NEW BUSINESS PLANS and weaknesses.
SUBJECTS In addition, it is u
focus on the possibilities and risks exposed by data typically gathered by assessment ana
theHOW
environmental
TO WRITE climate and comparative studies. The staff members in an organisati
well as the supervisors use it in the creation of a strategy in this manner (Bohm, 2008).
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reality, in the situationsByofclicking
having to devise a strategic plan, or often times, it is used to d
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a strategy to remedy a situation. (From Bohm, 2008)
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Would you like to proceed?
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Then how can SWOT review make Southwest Airline useful? First of all, its utility in int
review entails the study of the strengths and limitations of the company in a variety of
technically conceived forms (Bohm, 2008).
a. Management Capabilities
One of them is the hierarchical structure, where the emphasis is generally on evaluating
whether the structure restricts or strengthens knowledge flow and customer receptive
processes are in place (Bohm, 2008). When their travel delays or a risk of a flight not ta
off due to weather conditions, Southwest has also shown swift reaction to customers. In
comparison, the organisational organ gramme is such that the pecking order is transpar
and so the flow of data to the right individuals is easily encouraged for action (Daft, 200
In comparison, the strength of connectivity is further compounded by the presence of
Southwest Airline on the Internet. It was one of the first airlines to have a website, indee
of the drawbacks of its website, though, is that rates are not illustrated only by clicking ‘
to encourage consumers to know in advance. Regardless of this, it is reported that itis s
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the largest in terms of `unique’ visitors visiting the site, besides being the highly ranked
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with the highest operating online revenue. Also, its website has a magazine for its online
readers (Daft, 2008).
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The second method of analysing internal strength and vulnerability analysis is by lookin
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the preparation of the organisation. Daft (2008) points out that the point here is to exam
the ‘feasible long and short term’ arrangement or map of action concerning say,bystaff.
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see Southwest Airline on top of its game. One is that it usually plans its flight operations
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in advance and appropriately communicates that to the respective customers (Daft, 200
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Beyond this, the airline has an incredible risk management plans. Bohm (2008) notes th
is common knowledge that Southwest Airline embodies what is commonly referred to a
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“outside the box thinking” in its risk management. This entails the scheme of
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preventing/minimizing fuel cost from fluctuating by use of `fuel hedging’. This has how
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been seen to be a weakness in some fronts. For instance, pundits have argued that inste
Yes
‘hedging’ on risks that are business-related, No
the airline was simply predicting energy pri
without
A minuteaago
valid reason for such (Daft, 2008).
The other tenet is on coordination and supervision. (Bohm, 2008) The organizational cu
of in Southwest is remarkable. It is characterized by open communication in the workpl
and team spirit when it comes to coordination. Daft (2008) notes that because of these,
employee productivity has been enhanced besides and that as such the number of flight
and customer complaints, are limited. Besides, the airline is known to deal with its emp
humanely in the way it advances work-life balance, and maintenance of community ties
2008).
b. Programme Capabilities
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This is the second grand way to look at SWOT vis-à-vis Southwest Airline is in terms of
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weaknesses and strengths. Bohm (2008) sees this tenet in two ways: capacity and qualit
Capacity, according to him,NEW
PROJECTS/REPORTS is measured in terms
BUSINESS PLANSof theSUBJECTS
ability to offer
services and if so
measurement by which the activities therein facilitates that potential. On the other hand
quality
HOWis seen
TO as the possibilities and the technical know-how and innovation by which
WRITE
can be enhanced (Bohm, 2008). Certainly, the ability for Southwest Airlines can be exam
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in many ways. By clicking the button, you are accepting the Terms of Privacy Policy
Kate the fact that its headquarters is in Dallas, Texas and thereby able sufficien
These include
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look through its activities within the United States. It is also considered the largest airlin
the United States and as such is able to carry many passengers, besides offering those se
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at cheaper rates.
I can find Beyond
a writer that’ll dothis, it has succinct
any assignment for you model of business, which entails flying one
aircraft type (Boeing 737), usually on ‘high-density roots’ in the united states. The other
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weaknesses include that it does not fly outside the U.S.A, which can also be regarded as
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strength because it then concentrates in domestic flights effectively (Daft, 2008).
Yes No
c. Financial Capabilities
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Financially, Southwest is able to foot its bills, runs it operations and get involved in soci
corporate responsibilities.
The second way to do SWOT is to carry out external analysis (Bohm, 2008). The opport
for Southwest Airline Company are many. For example, the organization now enjoys po
media coverage, an insurmountable boost in finances accruing from its energy trading s
Other opportunities should be seen in terms of its location, the prices it offers, and its
relationship with the community in terms of social corporate responsibility, Internet pre
organizational culture, its advertisement slogans which are tailored with humor such as
the largest domestic airline in the whole of United States” (Daft, 2008).
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The threats include among others
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the button, you areit does the
accepting not offer
Terms many
of Privacy Policyservices offered by other
airlines due
Kateto its price, it has once in awhile been associated with safety violations, amo
others (Daft, 2008).
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The SWOT analysis of Southwest Airline can be represented in a table as below
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Positive Negative
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Internal Strengths Weaknesses
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1. Operates domestic flights
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2. does not offer other luxu
services offered by other
modern flights
3. Was once associated with
violations of safety stand
4. Does not indicate its pric
its website
5. Has cheaper prices leadin
1. Offers cheap flights ensuring
lower profits
greater pull for clients
6. Only flies one type of airc
2. Positive media coverage
,and so no variety in serv
3. Largest domestic airline in the US
4. Unique business model(flying one
aircraft type)
5. Huge amount of profit
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6. Good employee relation,
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coordination and team spirit
7. Acknowledged/acclaimed
PROJECTS/REPORTS risk
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management strategy
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8. Involved in corporate responsibility
9. Fewer flight delays and customer by Edugram
complaints
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Kate 10. Internet presence, with a online
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magazine
11. proper organizational structure
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Opportunities Threats
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1. Headquartered in Dallas, Texas 1. Competition from other
Yes No
2. Enjoys positive media airlines offering more modern
A minute ago
3. Internet presence, with an online services
External magazine
2. Some of its flights are
4. Coordinates with other airlines
dilapidated and may invite
operating outside the US
negative sanctioning
5. Positive energy conservation
strategy 3. Blue airline
6. Sound advertisement
4. New tax system
7. Increases number of cities
demanding its services 5. Alternative mode of trans
3. Boston Consulting Group (BCG) Matrix
Southwest Airline fits into this analysis. BCG Matrix is “a simple tool to assess a compan
position in terms of its product range” (Daft, 2005). The advantage of using it is that it a
company or an organization in thinking about the products/services it offers. Based on t
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thinking the company can now make decisions and craft plans on which plans/decision
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forego and which ones to adopt, besides which ones to implement further. Generally, th
matrix functions to plan and
PROJECTS/REPORTS organize
NEW a business
BUSINESS PLANSin twoSUBJECTS
ways: “business
growth rate and
market share” (Daft, 2005).
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A BCG matrix has four main components. These are Question Marks, Dogs, Stars, and C
Cows. Question Marks are produce whose expansions are faster. Because of thisby they co
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a lot of cash, while they generate little due to the fact that have low market share leading
large ‘netKate
consumption’. It should however be noted that a question mark has the ability
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mutate into a star when it gains market share, and later be a ‘cash cow’ when the augme
in market slows downward. The idea that, in due course, it might become a dog after the
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downIof
canbusiness
find a writergrowth
that’ll dois worth
any noting
assignment here (Daft, 2008). In the case of Southwest
for you
Airline, in terms of first class grades, the aircraft may be the business itself (Daft, 20
A minute ago
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The second ‘Dogs’ has a limited market share, and thus a low growth rate opportunity. T
Yesproduce or spend
economic class here, which does not No a significant volume of cash and
cashA minute
trap,agocan be considered. The diversification of this should be (Daft, 2008).
Stars are known to produce massive volumes of cash due to the fact that they have “stro
relative market share besides consuming huge sums of cash” because of the fast growth
they manage (Daft, 2008). Generally, then, the cash collected and approximately ‘net ou
invested. If a star is able to keep up its large market share, it then has the potential of
becoming a cash cow whenever the market enlargement rate goes down.
Cash cows are the leaders in a mature market. They therefore exhibit a return on assets
greater than the market growth rate. This means they generate more cash they consume
units should be ‘milked’ extracting the profits and investigating as little as possible. The
provide the cash required to turn question marks into market leaders (Daft, 2008).
The diagram below (on the next page) exemplifies what a BCG matrix is all about in the
context of Southwest Airline.
Question Marks Stars
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(New ventures. Risky-a few become (Rapid growth and expansion)-In
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stars, others are divested)-Analyze
1. Luxury seats
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1. Cooperation with other airlines
2. Customer service
2. Leasing out planes
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3. First class
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Cash cows (Milk to finance questi
Dogs
and stars )-Milk
1.Economy class
1.Business Class
Relative Market Share —–High
4. Possible Strategies and Their Impacts on the
Organization
The most viable strategies that Southwest airline should consider is two: Market Penetr
and Product development strategy. One of the strategies in this would is offering differe
seating options such as first & business class accommodations. This is both a market an
product strategy. This option will function to facilitate airline flights to more cities withi
United States and also outside the United states and attract much more customers espe
when the right products are developed. This increases revenue. This grounding is inform
a number of factors such as increasingly empirical evidence for the need for internation
travel, and to cities that the airline has not initially penetrated to (Daft, 2008).
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Moreover, offering luxuries on the aeroplane, such as in-flight meals and entertainment
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as a strategy would anchor this. Provided that the global population is rising, and the U
alone has recorder an increase
PROJECTS/REPORTS NEW ofBUSINESS
6million additional
PLANS people in the last half decade, such
SUBJECTS
services would attract many passengers besides effectively competing with other airline
offer
HOWtheTO
same. Beyond this, the demand for better seats has enormously increased
WRITE and
therefore, Southwest airline should consider bringing on board modern seats. The other
to improve its internet services by slotting in price schedules among other attractive
configurations (Daft, 2008).
Work Cited:
Bohm, A. (2008). The SWOT analysis. Nordestedt: Books on Demand.
Daft, R. (2008). New Era of Management. Beijing: Thompson South Western.
Jackson, S. (2011). Case of Southwest Airline. Southwest Airlines. Retrieved from https://docs.google.com/viewer?
a=v&q=cache:k1Lr7Tgqs8QJ:www.rci.rutgers.edu/~schuler/mainpages/revised~southwest~airlines.doc+Case+of+Southwest+Airline&hl=en&p
RsjmJSVkGGIG3susUuVDOWq1SJ48ITU8ZDW5HMYr7qwuyO9guaPsPW_VHzh1597-r-2sL8JATQD0-
ZjwnIPRBtTgFsJO46RWVB1HatJvZ&sig=AHIEtbT2CtIkLOe4wlA8eWqN1pSjlwYGVQ&pli=1.
Karami, A. (2003). Strategic Management in Small and Medium Enterprises. OH: Cengage Learning.
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