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An Analysis of Southwest Airlines

You have been hired as a consultant at the company you have been researching. This report is an in-depth look at the strategy and corporate management based on your detailed research completed. This is designed as a full report with recommendations that the executive team will use to enhance the existing strategic management.
Your report should include:

Strategy and the Strategic Management Process at your Chosen Company
Describe the industry you are investigating. Identify the company you are researching along with the mission, vision, values, and strategic plan. Be sure to answer the following questions:

Describe the industry in which the company operates.
What is the company's stated strategy? Is it a winning strategy?
How does the company's mission statement compare to those of its competitors?
How do the mission, vision, and values support strategic objectives or performance targets of your company?
What do the mission, vision, and value statements say about the company and its leadership?

External Environment and Competitive Position
Complete an industry analysis and a five forces model analysis including an assessment of the company's closest rival. Be sure to answer the following questions:

What are the driving forces of change in the industry in which your company competes? How has your company changed its strategy to address driving forces?
Where does the company stand within the industry based on the five forces model of competition analysis?
Which of the five forces exert the most pressure on the company? What has the company done to relieve this pressure?
What are your recommendations to further reducing pressure from these forces?
Internal Environment and Competitive Position
Complete a SWOT analysis and a value chain analysis of the company you have chosen. Be sure to answer the following questions:

How well has the company performed to stated strategic objectives or performance targets? Support your assessment with factual data.
Compare the strengths, weaknesses, opportunities, and threats of the company to those of its competitors. How do the vision and values affect how the company will respond to each?
What is the core competency of the company? How does this affect its standing within the industry?
How has the company used its value chain activities to improve its competitive position?
What are your recommendations in regard to the company's competitive position and value chain activities?

Competitive Strategy
Summarize the generic strategy employed by the company and how it helps the company achieve sustained competitive advantage.

Which of the generic competitive strategy options is your company pursuing?
Explain how your company is pursuing this generic strategy. How does it fit value chain activities specifically to support its generic strategy?
How does pursuit of this strategy help your company achieve sustained competitive advantage?
What are your recommendations in regard to the company's pursuit of a generic strategy or how it uses its value chain in this pursuit?

Strengthening Competitive Position
Summarize how the company strengthens its generic strategy through complementary strategic moves. Be sure to answer the following questions:

Outline what the company has done to fit its strategy to the industry and company situation.
Has your company responded offensively or defensively, or both, to improve its strategic position? How?
Has your company pursued complementary strategic options? Explain your answer.
What are your recommendations for your company to pursue future complementary strategic options to strengthen its competitive position?

The Global Marketplace
Summarize company operations in foreign markets and competitive advantage possibilities. Be sure to answer the following questions:

Describe which method(s) has been used to enter foreign markets.
How has the company gained competitive advantage through competing internationally?
What are additional actions that the company could take to gain a competitive advantage in foreign markets?

Corporate Strategy: Business Diversification
Summarize the company's methods to diversify into related or unrelated businesses. Be sure to answer the following questions:
Which diversification strategy is used—diversification into related or unrelated businesses, a mix of both or none, and/or divestiture and retrenchment?
How has this helped or hurt the company?
Offer a future proposal for business diversification and describe how it will help the company's strategic position.

Ethics, Social Responsibility, and Environmental Sustainability
Summarize the corporate ethics statement, statement about social responsibility, and sustainability statement. If none exists, report what you believe are these unwritten statements or code of conduct based on what the company says about itself. Be sure to answer the following questions:

Does company practice conform to its ethics statement or code of conduct? Where does practice diverge from the statement?
Does the company have a comprehensive, proactive social responsibility statement? Does company practice support this statement?
Does the company follow environmentally sustainable business practices? Does this help or hurt the company? How?
Offer suggestions for improvement in the above areas.

Strategy Execution: Building the Capability to Execute Strategy
Summarize the company's strategic plan based on its internal resources, capabilities, and structure. Be sure to answer the following questions:

How do the company's hiring and training practices support its strategy?
How is the company structured?
Would a different structure work to better implement the strategic plan? Why? If not, why does the current structure work?
Offer any additional changes that may help the company to deliver its strategic objectives.

Strategy Execution: Managing Internal Operations
Summarize an employee's experience within the company and its leadership. Be sure to answer the following questions:

What best practices can you derive from the company?
How has the company used information systems to better execute its strategy?
How does management motivate their teams?
Review the compensation packages of the executive team of the company.
What are the monetary and non-monetary elements of the top three executives?
Rate the company within the industry based upon its compensation packages.
What future changes in these areas do you see for the company? Offer any suggestions for change in the above areas.

Strategy Execution: Leadership
Summarize your recommendations to the CEO and board of directors on how to improve strategy for your chosen company. Be sure to answer the following questions:
What will this company be doing differently in three to five years to become more competitive based on your recommendations in previous components? ("no change" is not an option)
What do you recommend the company's leadership focus on to achieve this strategic position?

Solution Preview

Strategy and the Strategic Management Process at your Chosen Company
Describe the industry you are investigating. Identify the company you are researching along with the mission, vision, values, and strategic plan. Be sure to answer the following questions:
Describe the industry in which the company operates.
The Company is Southwest Airlines and it is in the airline/transportation industry. The industry has a limited number of companies that fly internationally and within the United States. There are some regional and local airlines as well. The main competition is from companies and their subsidiaries such as Delta, American Airlines, and Continental. Regional and subsidiaries include Jet Blue, SkyWest, Inc, Alaska Air Group, Inc., Frontier Airlines, Inc. and American Eagle.
http://biz.yahoo.com/p/airlinmktd.html

What is the company's stated strategy? Is it a winning strategy?
The company's strategy is to provide the customer with the service they want, at a reasonable cost, with the most friendly and reliable service. It is. The company has done well for more than forty years with this strategy.

How does the company's mission statement compare to those of its competitors? How do the mission, vision, and values support strategic objectives or performance targets of your company?
What do the mission, vision, and value statements say about the company and its leadership?
Mission: The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit.
The mission statement of Southwest is people centric. It addresses the customers and their desires while pointing to the employees as the way to provide it. American Airlines, by contrast also wants to supply customers with a good travel experience (if not overall experience) and they use "enhancements" which are not described. Delta is concerned with the global community as well as the customer and Northwest's mission says is focuses on people and developing a multicultural environment, which is a vision statement rather than mission. In all cases, the company is focused on the customer and communities, in the modern era of diversity and inclusion. Southwest is more focused on the customer and employees and their ability to interact in a comfortable manner.
http://www.makingafortune.biz/list-of-companies-n/northwest-airlines.htm
External Environment and Competitive Position
Complete an industry analysis and a five forces model analysis including an assessment of the company's closest rival. Be sure to answer the following questions:
What are the driving forces of change in the industry in which your company competes? How has your company changed its strategy to address driving forces?
The driving forces include demand, preferences of the customers, performance of the airlines, costs, competition, and operations. In each of these, the company shows high marks, especially where customer service with a great price is a key to getting and retaining customers. The airline has a good safety record and customers choose it because, while it has limited "frills," it does have low costs and provides the services that customers ask for. This includes lower costs, WiFi and entertainment access, baggage without large fees. Competition is always fierce in the industry, especially since there are limited companies to use, especially for flights over the entire continent. The operations are kept in line with employees as partners, always looking for ways to enhance the company's and their bottom line. Costs, especially for fuel and new planes remain an issue, though with the recent drop in fuel prices, this is easing a bit.

Where does the company stand within the industry based on the five forces model of competition analysis?
It is among the top three in terms of profitability and customers using their services. The company is also working on modernizing the fleet of aircraft.
The company also uses a point-to-point method rather than a hub and spoke method to provide lower pricing. While Delta (Atlanta) and American Airlines (Dallas/Fort Worth) have many of their flights pass through the hub and then move onward. This increases costs for the airlines and passengers.

Which of the five forces exert the most pressure on the company? What has the company done to relieve this pressure?
The buyers of airline services have the most power and exert the most pressure for the company. Meeting their needs is the primary goal of the airline, often without considering the competition changes.

What are your recommendations to further reducing pressure from these forces?
Continue to provide the best in customer services and lower costs and fees. This seems to help the airline attract flyers on a regular basis. Some attention to the competition of the subsidiaries of other larger airlines is important. These often lower the cost of flights for other airlines, especially if the consumer remains within a region. Taking the fuel savings and applying them to upgrades and new planes to reduce the potential for future problems is another way to reduce ...

Solution Summary

This solution provides an analysis of Southwest Airlines using the provided questions.

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