Growth has been steady due to the strategy of only entering markets when frequent flights can be achieved cost-effectively. Corporate marketing stresses the company's unique selling points and brand identity (Enz, 2009)
In addition, embracing innovative technologies such as e-ticketing has been an advantage. It is one of many offerings that has allowed Southwest to rank high in customer service and convenience, winning the company the Department of Transportation's Triple Crown over many consecutive years for on-time service, baggage handling, and low incidents of customer complaints (Gittell, 2005)
Southwest operates almost exclusively with only one type of plane in its fleet -- the Boeing 737 -- a quieter, more fuel efficient, and easier to maintain model which has helped reduce costs. Profit potential is the driving force behind all corporate decisions, not pricing wars or an overemphasis on market share (Hill and Jones, 2009)
S. states, the District of Columbia, the Commonwealth of Puerto Rico, and six near-international countries (Johnson, 2011)
Senior management allows employees to have a voice in the organization and is transparent with business objectives, goals and information which contribute to the unity and cohesion of the work culture (Enz, 2009). "The most effective teams -- those successful for the long-term -- are activated as a deliberate strategy" (Pryor et al
Both entities combined offer over 4000 daily flights. The Southwest Airlines corporate vision and self-concept is "America's low-cost, low-fare airline" (West-Grubbs, 2005)
This low cost leadership strategy enhance the value of the Southwest Airlines in the eyes of the customer and the company get higher share in the market as compare to its competitors. Southwest Airlines can give low cost benefit to its customers by delivering the service at lower price and hiring the low cost suppliers (Drucker & Drucker, 1999)
In this paper, the focus is on the specific strategy of the Southwest Airlines. From the Porter generic strategies, Southwest Airlines has chosen low cost leadership strategy (Gittell, 2005)
This offer attracts the customers largely because they are more concerned about the fares as compare to any other facilities of meal, seats or luggage transfers. Thus, it can be said that only such strategy help to increase the value of the Southwest Airlines that are according to the customers need and they can be cost minimizing as well (Grubbs-West, 2005)
Boeing 737. Overcoming these problems is possible through proper strategic planning (Hunger & Wheelen, 2011)
The blue ocean strategy not only covers the establishment of the strategy but also the way to execute it in the most effective manner. The three basic concepts on which the blue ocean strategy is based are value innovation, tipping point leadership and fair process (Muse, 2002)
Before offering the blue ocean opportunities to the non-customers, the company must check that whether the offer will create a real demand or it is just the timely flow. Southwest Airline should offer such strategy that will not bring new customers for a short period (Shaw, 2011) In order to prevent the strategy from failure the company must observe the non-customers properly
Niche marketing strategy always chooses the specified opportunity of the market environment. Southwest Airlines must take care while choosing the opportunity because some opportunities are the environmental traps that may harm the Southwest Airlines good will (Thompson & Strickland, 2004)
As far as international expansion is concerned, Southwest Airlines can make acquisition of international airlines to start serving the international markets. The strong brand image and financial strength can greatly benefit the company in establishing its Global presence in a short period of time (Cadle, Paul, & Yeates, 2010)
The heavy expenditures done on the Research and Development section are also posing pressures on its profit margins. In the future when Southwest Airlines will expand its operations to international markets, the intensity of competition and economic pressures will increase up to a great extent (Jobber, 2009)
Southwest Airlines can expend greater amount on its Research and Development section in a view to produce more advanced technologies and improve its customer services including e-ticketing and web booking services. Furthermore, Southwest Airlines can make effective marketing and promotional efforts in a view to communicate its low price traveling services and discounted offers to the potential market segment (Kotler, Brown, Burton, Deans, & Armstrong, 2010)
Another big strength of the company is its brand image among its key stakeholders which it has developed by providing the highest quality of services for more than 40 years. The low-cost strategy has helped the company in keeping itself in the row of the most competitive airlines in the world (Kurtz, MacKenzie, & Snow, 2010)
The entire fleet flies on the Boeing 737 aircrafts. It shows good supply chain relations, but adding more manufacturers in the supply chain can give it a competitive advantage in terms of cost-efficiency and broader business network (Lancaster & Withey, 2007)
B) External Analysis: a) Opportunities: Southwest Airlines has numerous opportunities to grow in the local as well as international markets. It can take advantage from its distinctive competencies and core strengths to overcome its weaknesses (McDonald, 2011)
The company has planned to internationalize its business operations in 2014 by offering its passenger and logistic services to the worldwide customers. The highly advanced, safe, and cost-efficient fleets make the Southwest Airlines one of the most successful airlines in the country (Southwest, 2012)