Southwestern Analysis

2217 words - 9 pages

Margherita Siccardi

08/25/2014

Student's Name

Date

1. Who are Southwest Airline's main competitors? (2 points)When Southwest started to operate, the main competitors were Braniff and Texas International Airlines. In addition to that, Southwest considers automobiles to be their competitors because of the routes they were operating on. The company's main goal was to encourage people to fly rather than driving because the distances they served were short and they could easily be covered by driving.2. What customer need does Southwest Airline satisfy? (2 points)Southwest identified some major needs that were not covered by any airline when they started; such needs included low fares, efficiency in time and locations, frequent flights for a single route in the same day and also a complimentary bag upon check-ins. Also the company came up with a very efficient loyalty program, which encouraged more and more customers to fly with Southwest as they say more and more needs being satisfied by one single company. Finally, they chose to operate in alternative locations and airport that were not covered by any major airline.3. Who is Southwest Airline's customer? (2 points)Southwest Airlines divided its target market into two major categories: frequent business flyers (within the US) and leisure travelers on a budget. Customers were attracted by its competitive rates and by the fact that cutting costs did not represent sacrificing a good service on board for the company. Also they managed to take over Midway Airlines target market by covering its routes once the airline fell, starting to operate from Midway (Chicago). Finally the company managed to rank number 1 interstate carrier in Califormia.4. What is Southwest Airline's biggest competitive advantage? (2 points)All the factors that I previously explained came together to build its biggest competitive advantage; to summarize, its advantage was represented by short-routes, frequency, low cost, "luv" strategy of the 1970's. Southwest also managed to build a great relation with its employees, gaining the title of one of the "best companies to work for", where employees were trained in order to achieve promotions, rather than contracting outside people to occupy higher levels. Their company culture is what gave them the biggest competitive advantage over their competitors.Generic Business Level Strategy5. What Generic Business Level Strategy is Southwest Airline pursuing throughout the case? Why? (2 points)The goal of Southwest Airlines' generic business level strategy was achieving a cost leadership strategy and service differentiation. The company managed to become a cost leader in the industry by keeping expenses as low as possible so that they consequently could keep prices as low as possible. Service differentiation was achieve thanks to the fact that this airline started to target a category that was not yet served; travelers on a budget who had to travel short distances, avoiding major...

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