Assume you are the Vice President of Southwest Airlines, select 1 Weakness and 1

Question

Assume you are the Vice President of Southwest Airlines, select 1 Weakness and 1 Threat from the SWOT Analysis statements above and explain how you would recommend taking that selected weakness and turning it into a strength and the selected threat and turning it into an opportunity.

SWOT ANALYSIS:

STRENGTHS

• Southwest Airlines is known to be one of the major low cost airline leaders and an initiator in being a low cost carrier.

• According to the number of passengers, Southwest has been termed as the largest airline in the world.

• It has quite a diversified management, which makes it more efficient in handling crisis.

• As the initiator for being a low cost carrier, it managed to score a lot of revenue.

• It is known to be the third largest fleet for carrying passengers in the aircraft industry all over the world.

• By posting a profit for the 36th consecutive year in January 2009, it is known to be one of the most profitable airlines in the industry.

• The Short trips that were without any frills were one of the major reasons for Southwest’s popularity.

• It has a simple fare structure, and it is one of the basic reasons which made this company successful.

• It has a positive organizational culture and encourages a positive and warm employee culture.

• It gives the option to the customer to change reservations without paying any additional costs.[sky]

WEAKNESSES

• It has not offered any segmented seating i-e. There is no business class or 1st class seating arrangement.

• Most of the employees are members of the employee union.

• Carries an insignificant amount of cargo/freight.

• It uses only the Boeing 737 as its aircraft, so it has a single producer.

• A minority of the tickets are purchased through agents.

OPPORTUNITIES

• There are still many National and International markets that are still not tapped, and Southwest can expand to those markets.

• There are many industrial opportunities for development in the airline industry.

• It can get the latest technology that would give it a further cost effective lead, as well as providing new services/products.

• Hispanic population growth is regarded as a plus point that will make the young generation potential customers for the airline.

• It can haul on longer flights, to cover more expansion.

• It can also tap the business travel option for the business class passengers, and offer private flights.

THREATS

• Online ticket reservation system by the competitors.

• Decrease in the air travel demand.

• Fuel price hauls and fluctuations are a major reason for the Southwest for not incurring more profitable operations. (Southwest counters this by strict financial spending on fuel i-e fuel-hedging).

• Terrorist activities make it more of a threat for air travel.

• Annual airline security cost increment.

• Limitations regarding the terms and legal obligations.

Explanation / Answer

Weaknesses

It uses only Boeing 737 as its aircraft, so it has a single producer.

Having a single producer for the aircraft provider, southwest airline can increase their overall trust-ability as Boeing 737 is considered as one of the safest planes the skies. This specific reliability and depending on a single aircraft provider would directly decrease the overall cost of finding new aircrafts as well as reducing the overall inventory for the maintenance part required to service the aircraft as well.
By having a specific airplane for the industry which can be easily manage and service would reduce the overall cost for the Airlines and provide better support to the overall structure.

Treats

Online ticket reservation system by the competitors

Online ticket reservation system which is used by the competitors can be easily over ruled by providing different promotional discounts on the offline stores of the airline. By having and specific ability to deal the tickets with better deals through the agents would be companies one of the most beneficial points for the news from the air tickets. By mainly focusing on the on spot tickets as well as urgent tickets which do not require any kind of online portal for ordering as well as registering a ticket for the airline would be beneficial for the company. This practice would also increased the relationship between the customer and company as it will provide a physical transaction.

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