Southwest Case Analysis

Southwest Airlines most valuable resources are included their employees and lower price of fuel. Because Southwest's employees have fast working cycles and they fly a single type of aircraft, the company's operating costs are reduced. The relationship between employees is also very close, which can improve the efficiency of the enterprise. The lower fuel cost enables Southwest Airlines to provide customers with more affordable ticket prices and at the same time make a profit in the market. Also, Southwest Airlines' official website has convenient services and intuitive timetables. Through online marketing, Southwest Airlines can provide online support to its customers and attract more potential customers. I will use the PEST method to analyze the external environment of the airline industry. The first is political factors. The operation of the airline industry is heavily influenced by government agencies. As the airline industry may cause irreparable losses due to accidents and deaths, the government has formulated related policies to require the airline industry to provide safe travel and high-quality services to ensure passenger safety. Second, economic factors have a long-term impact on the airline industry. For example, the recent economic recession caused by the outbreak of COVID-19 has prompted the tourism market to begin to enter a downturn. And under such circumstances, companies have to face high operating costs, because companies must pay more than usual salaries and subsidies and also have to bear insurance. Besides, fuel prices have continued to rise in recent years, making it difficult for the industry to create profits. Third, the main influence of social factors on airlines lies in changes in consumer demand. With the popularity of online face-to-face video conferencing, many consumers have reduced their demand for business class. Therefore, airlines need to make corresponding policy adjustments in the face of changing consumer needs. Fourth, technological factors are also very important for the airline industry. More and more passengers choose to book tickets online because they can easily access flight information. This method gradually replaced the traditional way of handling the formalities and attracted more young passengers. The business-level strategy used by Southwest Airlines is to integrate cost leadership and differentiation. In the industry, other airlines provide the same type of services, so consumers have a higher psychological and higher expectations when purchasing services. At the same time, consumers will want to pay a low price and get a higher quality of service. Therefore, Southwest Airlines focuses on short-haul flights, point-to-point flights, and a fleet consisting of only Boeing 737 aircraft, flights, thus setting low fares. By doing this and enforcing certain basic rules, such as allocating seats and not dining on the flight, they can keep their costs low while providing unique flight services. Also, Southwest Airlines pays extensive attention to its employees, which shows a firm commitment to employee growth and professional skills development. For example, the company regularly provides advanced employee training, employee open-door policies on various plans, promotes close company communication and friendliness, and finally focuses on cooperative labor relations. These things show a strong commitment to employee growth while focusing on internal expertise and retaining loyal employees.