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SWOT Toolkit- Southwest Airlines

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Several of the background readings referred to gathering data to support the external analysis. Be sure to review those readings carefully - especially the Comerford and Callaghan chapter, so you know what kinds of data are used when conducting an external analysis. The purpose of this SLP is to develop the component of our strategic toolkit that relates to 5-Forces and PEST Analysis. This is basic business research - a procedure that is part and parcel to the skill set of any MBA.

Required Reading

Comeford, R., & Callaghan, D. (n.d.). Environmental, industry, and internal analysis. Retrieved on August 15, 2011 from: http://www.scribd.com/doc/19448976/STRATEGICMGMTCOMERFORD


The key aspects of this assignment that should be covered in your paper include:

Step One: The first step in an external analysis is to determine the industry to which your target business is classified. Usually this is done through North American Industry Classification System, or NAICS code. Find a website or library reference that would enable you to determine the NAICS code of any business.

Step Two: Research web and library sources that would give you the kinds of data you would need to conduct a Porter 5-Forces analysis. We are not looking for sites that describe the 5-Forces, but for sites that would have data that you will be able to use to analyze the degree of competition in an industry, or the ease of substitution, for instance. You have undoubtedly run into such websites and publications before in your core courses. Typically, they are government sources providing statistical data, industry or trade magazines or journals, general business publications, finance websites, websites for trade associations, etc.

Step Three: This is a two step process: First, determine what kinds of information you would need to evaluate each of Porter's forces (see the background materials), and then find a source that will give you that information. Find a minimum of 2 different sources for each of Porter's Forces. Step Three: Research web and library sources that would give you data to support a PEST analysis. Find at least 2 different sources for each PEST variable.

Step Four: In a paper (not including cover page or references), list your resources from steps 1-3 above. For each source, provide a title and a URL, if applicable. Write a short paragraph explaining what information is available, how it would be useful in an external analysis, and critiquing the source (for example, what are the limitations of the source? Is one better than the other? Why?)

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North American Industry Classification System

Southwest Airlines operates in the NAICS defined industry of "Scheduled Passenger Air
Transportation," NAICS code 481111," (NAICS, 2011). NAICS defines the industry as such:

This U.S. industry comprises establishments primarily engaged in providing air transportation of passengers or
passengers and freight over regular routes and on regular schedules. Establishments in this industry operate flights

even if partially loaded. Scheduled air passenger carriers including commuter and helicopter carriers
(except scenic and sightseeing) are included in this industry. (NAICS, 2011).

This information would be immediately useful in accomplishing the external portion of a SWOT
analysis for Southwest Airlines. Defining the enterprise's industry is the first step to identifying
external threats to the enterprise.

NAICS classification website: http://www.naics.com/search.htm

The above website quickly looks up the NAICS classification for any industry. It
provides definition, numerical code, and similar cross referenced industry classifications. The
weakness of the site is its inability to search via business name. Educated guesses as to ...

Solution Summary

Specific resources for accomplishing a SWOT analysis on Southwest Airlines. Also applicable as a road-map for how to accomplish a SWOT analysis in general.