Southwest Airlines Challenged Global Crisis-Myassignmenthelp.Com

Question: Discuss About The Southwest Airlines Challenged Global Crisis? Answer: Introducation Airline Industry has always been an industry of interest to many business people, professionals and academics because of economic effect of the industry. The attractiveness of US airline industry can be analyzed by using some of Porters forces; Threat of New Entrants In United States airline industry, entry barriers were softening pre 9/11 due to government deregulation laws and policies. Low cost carriers were able to distinguish their services through their pricing strategy. Bargaining Power of Suppliers It was possible to overcome the suppliers power by using the cheaper airports and reducing the charges for landing space. Industry Rivalry Prior to 9/11, the rivalry among airline industry was intense because all the players are competing for similar customer base and it has reduced the attractiveness of US airline industry (Hannigan, Hamilton Mudambi, 2015). 9/11 terrorist attack has been a major shock for the US Airline Industry and this event had a large impact on internal and external environment of this industry. After this attack, the industry has lost approximately $30 billion. It is the fact that this event has rebuilt the operating environment of the sector. Political environment has also changed post this terrorism attack. However, domestic airline industry in US has experienced increasing operating income, but it is still less cost effective and profitable than other industries in country. The industry is facing service problems, which need to implement some new regulations of competitive practices of airlines. In this country, travelers were frustrated because of more offensive security processes (Cameron, 2017). The costs of fuel were also uncertain and new entrants put the pressure on executives. These factors indicate that attractiveness of US airline industry is moderate. There is the need of improvement in some areas of industry. The government should take some initiatives to enhance the attractiveness of US airline industry. In US Airline industry, Southwest Airlines had made several efforts to overcome the negative impact of 9/11 attack. The organization has implemented effective strategies, like; it has focused on building its management team. It has found out that there are two types of travelers, i.e. time oriented, convenience travelers and price sensitive leisure travelers. By focusing on these target audiences, Southwest Airlines has developed the pricing strategies in two tiers accordingly. In this way, the organization has been implemented cost leadership strategy. In addition to this, it is using effective marketing and promotion strategies and posting attractive ads with impressive tagline (Asahi, Murakami, 2017). Apart from this, the company has established an effective work culture and treated its employees with respect and equality. It has developed the organizational culture, which places the employees as first customers and travelers as second customers. Because of this, employee feel extremely motivated to operate the flights according to the schedules and treat the passengers in a friendly and effective way. Thus the strategies, which are critical to the success of Southwest, are focus on short haul trips, lower fares and on time services to its customers. There are various reasons behind the success of Southwest Airlines in US. The major reasons are like; its cost leadership strategy, innovation, effective management, culture and customer intimacy. Southwest Airlines has developed three categories of fare, which include higher fare for the business professionals. The organization has made various innovative changes in its operations and processes such as; renovating the gate areas, which will include power ports, television monitors, seas and new tables, new boarding procedures etc. In addition to this, it focused on promoting the two bags fly free campaign (Inkpen, 2011). One of the most effective success factors is that Southwest Airlines is emphasizing on its employees and encouraged them to become more innovative. Thus, there are the reasons, why Southwest Airlines is successful in US Airline industry. Southwest Airlines is using very unique strategy to stay competitive in the US Airline Industry. There were so many firms, which tried to imitate its business model and strategy, but they were unsuccessful. From the case study, it can be analyzed that Southwest Airlines has implemented a successful strategy via its unique culture, strong leadership and excellent treatment with employees (Johnson, 2016). These are the major competencies of this airline, which make it more difficult for other players to imitate strategy of Southwest effectively. It was the first airline to introduce the internet page and enabled online tickets sale. Thus, it can be stated that it is impossible to imitate its strategy as there are many unique facts, which is the foremost reason behind its success. This unique strategy of Southwest Airlines is sustainable because this organization is able to sustain its low cost strategy, but current business environment poses some threats like; technology advanced airlines, possible loss of operating productivity, investment on gate construction. With this strategy, Southwest Airlines will be able to generate more profits and revenues and have strong position in US Airline industry (Potti, 2017). By enhancing the morale and productivity of employees, the organization will be able to contribute the industry effectively. Thus, the strategy of Southwest Airlines is sustainable and it will allow the Southwest Airlines to maintain its position as most strongest and prosperous airline in United States. After looking at Southwests strategies and operations, it can be said that Southwest Airlines should become an international airline. The organization should expand its business to new and attractive destinations. For this, Southern American nations, Canada, Caribbean Sea and Islands of Mexican Golf will be the new potential markets. In these countries, the firm will have more business opportunities for growth and success. Recently, the organization has introduced its flights to many northeast airports, inclusive of New Hampshire, Long Island and Hartford. Till 2011, this airline had not expanded the business in any market outside the United States (Zou, Elke, Hansen, Kafle, 2014). The organization had made changes in its services and operations and implemented effective pricing and marketing strategies. These are the major factors, which give it potential to become an international airline and operate business in above mentioned destinations. References Asahi, R., Murakami, H. (2017). Effects of Southwest Airlines' entry and airport dominance.Journal of Air Transport Management,64, 86-90. Cameron, K. (2017). How Southwest Airlines challenged a global crisis.The Business Management Collection. Hannigan, T. J., Hamilton III, R. D., Mudambi, R. (2015). Competition and competitiveness in the US airline industry.Competitiveness Review,25(2), 134-155. Inkpen, A.C. (2011). Southwest Airlines. Thunderbird School of Global Management. Johnson, J.L. (2016). Opinion: Nine Reasons Why I Think Southwest is the Best. Retrieved from https://www.airlinereporter.com/2016/05/opinion-nine-reasons-southwest-best/. (Accessed on 25 January 2018). Potti, R. (2017). Southwest Airlines: Successful And Sustainable For Long-Term Investors. Retrieved from https://seekingalpha.com/article/4105293-southwest-airlines-successful-sustainable-long-term-investors. (Accessed on 25 January 2018). Zou, B., Elke, M., Hansen, M., Kafle, N. (2014). Evaluating air carrier fuel efficiency in the US civil-engineering industry.Transportation Research Part A: Policy and Practice,59, 306-330.